What price Woolworths’ 7,000 new jobs?

Woolworths’ recent announcement about creating 7,000 new jobs in the next six months has been clouded by comments that the jobs will come at the cost of many more other retail positions.

Two weeks ago Woolworths has announced that it would create more than 7,000 jobs nationally in the second half of the financial year, led by new store openings and sales growth in existing locations.

This announcement follows the creation of 9,000 new jobs in the last half driven by the opening of two new distribution centres, which the company claims created 800 jobs. It takes the total employment at the retailer to close to 200,000 workers.
Woolworths Limited CEO Michael Luscombe said: “We see our role as generating economic activity and jobs.
“The retail sector employs 15% of the Australian working population with a flow-on effect to suppliers, manufacturers and others. We have already seen 43,000 jobs lost to the sector and we need to continue to support it,” Mr Luscombe said.
Tony Standley of The Retail Alert Group, said “to hear that Woolworths in tough times is about to employ several thousand more Australians on the surface is great news.
“But so are other mid-to-small size retailers such as Bakers Delight and ALDI. It is interesting that most retail staff growth is coming from the food and takeaway sector – even in tough times people have to eat.
“But it is true to say that the growth of Woolworths has been assisted by a weak competitor in COLES and a ‘favoured’ low-cost occupancy cost delivered by developers and shopping centre owners to major, now giant, Australian retailers over the last twenty years. If you look at the occupancy terms and conditions ‘gulf’ that has developed over the last twenty years, that’s what sits at the heart of the current retail sector market imbalance.”
According to Mr Standley, the occupancy terms and conditions ‘gulf’ between the duopoly of Woolworths and Wesfarmers (COLES / Kmart / TARGET) with property developers in tow, vs. mid-world retailers is destroying small and medium businesses.
“No wonder the giant retail duopoly is continuing to take more and more market share, creating the illusion of employing more Australians at the expense of mid-size and SME Australian retailers,” he said.
“In our view it would be far better to spend the millions of tax payers dollars, [that are spent] engaging Choice to monitor supermarket prices, on developing an anti-trust retail and services competition policy for the ACCC.
“If the current trend of the giant retailers getting larger continues, fewer people will be employed in the Australian retail sector, with Australian shopping centres having fewer specialty tenants to choose from, resulting in less consumer choice.
“Continual market growth by the giant retailers, despite the current statement of new jobs being delivered in the short term, will destroy Australian retail jobs, not create more Australian retail jobs,” he said.
Mr Standley has called for harmonised retail lease legislation, delivered through the National Tenancy Working Group, creating a commercial market balance between the giants of the Australian retail sector and the Australian mid-to-small retail sector.

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