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Normal rules of competition don’t apply in Canberra?

By vekta 6 April 2008 32

Something strange is happening here.

The normal rules of competition and commerce don’t seem to apply to doing business in Canberra.

For example, a well-known, central, long-running supermarket close to my home has, since I’ve been here (about 2 years), routinely sold goods that are overpriced and often past their use-by dates, and sometimes just plain off.  When I went out for breakfast this morning in Kingston, I found popular cafes closed on a busy morning when it was hard to get a table anywhere.  Late at night, even major fast food chains are closed, whereas in any other city in this country they would be open.

And most amusingly, food is bad and overpriced, and service is often terrible.  Yet businesses that consistently open “when they feel like it” as opposed to when there are customers, or charge silly prices, or treat customers badly, continue to thrive and prosper for many years in Canberra, whereas in any other city they would fail immediately.  Elsewhere, it seems, businesses are subject to normal laws of competition, and if service is poor or prices laughable, a competitor starts up.  Here, nothing happens.  Business as usual in Canberra.  Nobody even seems to notice.

You can’t vote with your feet if there are limited or non-existent alternatives.

Now I know this city has unique challenges, but doesn’t the ACT government have people who are paid to ensure that local commerce is lively, and that a market, particularly for services, operates and thrives?  An important part of this is regulation and licensing, and maybe these well paid ACT public servants should pay attention to striking the right balance, to allow competition to thrive, and to encourage new businesses

Perhaps it’s time to go back to the drawing board with business regulation and licensing laws in the ACT, to bring this city into line with the rest of the modern world.

What’s Your opinion?


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32 Responses to
Normal rules of competition don’t apply in Canberra?
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vekta 1:14 pm 10 Apr 08

I’ve worked in customer service, I’m the son of a small business owner and operator, so I’m intricately aware of the difficulties running a small business and staff issues. I’m not expecting anyone else to be at my beck and call all the time.

jimbocool, thanks for your post. However, it defies logic that the main problem is low returns (eg %2), yet Canberra cafes still pick and choose when they feel like opening. If returns were so low, the industry would be more competitive, driving up customer service levels, food quality, and increasing opening times when there was demand. As for not opening on Sundays to save money, I would be extremely surprised if that was the case, given Sunday would be one of the busiest days for many Canberra cafes (if they showed up to open their “businesses”). Firstly, wealthy Canberra public servants all go there in the morning for breakfast. Then all day, people would visit the cafe. The fact they don’t open on Sunday is extraordinary.

In terms of the accounting/finance perspective, sure that’s another aspect of this, but overarchingly the way government administers the regulatory/licensing/planning structure, and provides incentives or otherwise, will determine the environment, and have an effect on competition. The accounting/finance part of this represents the micro-level of the problem. Plainly, there is still a broader malfunction at play.

As for S4anta’s cryptic “Ecomnomics lesson”: My argument is there is enough demand for some businesses to open – ask Blind Freddy, but they still don’t. That doesn’t make sense to me. I’m surprised it makes sense to you.

People seem naively keen on pure word-of-mouth, and giving good businesses their custom. But that doesn’t help when the market’s failing anyway. This failure creates limited alternatives, and lowers standards across the board.

Obviously hiring staff, or paying a manager to manage a cafe, costs money. But that, incidentally, is how all business operations happen all over the world and have done for hundreds of years. This isn’t a revelation. And in other places where it still costs money, they still have decent service, decent food and sensible opening hours. Go figure.

Yes, a lot of Canberra businesses (and patrons, it seems) still think they’re in a country town in the 1950s. Surprising, given the levels of education and connectedness in this town.

In terms of damnintellectuals’ post that there are “businesses opening and shutting all over Canberra all the time”, I’d suggest that damintellectuals’ look below the surface to see what’s really happening. A superficial appearance of a market does not a market make.

Dave_K, I’ve experienced that coffee machine situation. Imagine a serious cafe telling you that you can’t have a coffee because they turned off the machine. I went to order a toasted sandwich recently, and was told I couldn’t have one because they had turned off the toaster. Hilarious.

It’s called an “on” switch.

illyria, in terms of staffing issues, perhaps this is partly a problem of useless staff who are too cool to do anything, holding small businesses to ransom. The Federal Government may be partly to blame for dumb IR legislation, and to the extent they regulate tax and employment for small businesses: strangling them in red type, creating inflexibility in HR management, and making hiring staff a liability.

ant 12:31 pm 10 Apr 08

Gus’s was amazing, it was so busy, and yet the tables and chairs were always grubby. Things certainly have improved since then.

jenny green 9:08 am 10 Apr 08

Vekta – if you shop at Dickson Woolworths, I am not surprised you are cranky – I’d strongly recommend Jaimeson Coles if you’re an inner north resident.

Ahhh – Sunday penalty rates – bring back the good old days of Gus Petersilka. Much more fun to threaten workers with the sack than pay penalty rates. Now, HE had the scene sewn up!!! Great pioneer of Canberra cafe cuture…

el 9:46 pm 09 Apr 08

Agreed 100% Ant.

ant 9:43 pm 09 Apr 08

Grrr, Silo. It’s tantamount to a cult! I go down to the Vietnamese bakery a few doors down. That’s a nice old-fashioned bakery, top food, they don’t run out of bloody cakes by 10.30am, and they’re friendly. At lunchtime, it’s 4 deep in there, evidently there’s plenty of people not going to Silo!
I noticed the other day, that the viet. bakery has National Bakery painted on their awning. Cheeky!

sepi 8:56 pm 09 Apr 08

And Vetka, if you really think someone can set up to sell the same products as silo on the 3 days they are closed, and gradually grab all the customers, why don’t you do it?

It just isn’t that easy, or else people would.

illyria 7:44 pm 09 Apr 08

And therein lies the answer Ant. You go back to the places that provide what you want. You blacklist the ones who do not. The good ones make it, the others don’t.

Vekta – expecting people to have other staff run their small business while they have a day off… obviously you have never run a business and experienced staffing issues ie. slept in, forgot to come in, got a better offer, too drunk, too stoned, feel sick, got a better offer bla bla bla. Generally it is not the small business owner that says things to customers like “what do you mean you want chocolate in your chocolate milkshake” or “we have lives too you know”. It is their staff, who have a better offer, want to go home, etc……..

I must admit that I have put Silo on my blacklist several times for poor service and general arrogance issues, but lets face it, those vanilla brulees are just soooooooo good……….

Have you seen the episode of Seinfeld with the Soup Nazi? It’s the same at Silo but with bread and pastries.

ant 1:31 pm 09 Apr 08

Dave K’s comment reminds me of some months back, trying to book a lunch at a certain fine dining restaurant, as we were entertaining a minister from a foreign government.

Due to his prior meeting with our minister, the lunch needed to start at 1.30pm. Whereupon the restaurant person helpfully advised me that they’d be closing the kitchen at 2pm, as “we have lives too, you know”.

I had visions of them clearing out the lunch settings and setting up for dinner around our VIP, and cancelled, and booked the affair with The Waters Edge, who understood the situation somewhat better and provided sparkling service. Canberra’s reputation was saved.

Dave_K 1:22 pm 09 Apr 08

One of my biggest gripes about service in Canberra relates to those restaurants – often in Manuka – which try and boot you out around 10 on a weeknight, at the same time the staff are sitting down for a meal or drink as they close up. I don’t begrudge anyone who has been on their feet all day a feed or a drink after finishing work, but it’s a bit much when the entire staff start packing up and chilling out when you’re still finishing your own meal. Then to be told “we’ve cleaned the coffee machine and switched it off.” On one occasion, I had to rouse the staff from their table to pay our bill. Should have just walked off, I suppose. Needless to say, I haven’t been back to those places – which is the most effective way to send a message about your satisfaction, or not, with a business.

KingMonty 1:12 pm 09 Apr 08

I’d have to say that after leaving Canberra after 20 years, the general service is pretty ordinary in the ACT compared to other cities. Probably a good thing that the industry needs a bit of a wake up. Those cafe’s that do have great customer service get good word of mouth and do well.

damnintellectuals 7:18 am 08 Apr 08

hang on a minute … my comment is my opinion, and that is how I choose to voice my opinion. Tut tut damnintellectuals … Let me express my opinion one more time, just so you get the message this time …

Thanks for the clarification, CanberraResident. I didn’t realise you were one of those that don’t back up their opinion with action.

RuffnReady 2:00 pm 07 Apr 08

Jimbocool nailed it. This is not a regulatory issue, nor a problem the government can fix. If you want to criticise government for anything, it would be the Federal government for over-regulating small businesses in general.

There are businesses opening and shutting all over Canberra all the time. Competition is alive and well.

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