A retailer in a major shopping centre is pushing hard for a twenty five per cent rent reduction. They will not get it.
The centre has no trouble filling space. The lease has around seven months to run. The business is already trading profitably. From the landlord’s perspective, there is no reason to move since the cards are stacked against the retailer – they have to pay to leave, a make good is expensive and, any legal challenge has to be funded by the retailer.
The argument being put by the retailer is common: we’re small, local and family run. It’s usually presented with plenty of emotion. It is also not an argument a commercial landlord is obliged to accept, least of all from a profitable tenant in a centre with a waiting list.
When talking to the retailer, we looked at their data, with their permission. Some categories are selling out quickly. Replenishment is inefficient. Stock that customers came in to buy was not on the shelf.
That is where more profit sits, profit nobody has to be persuaded to hand over.
So, we sought to get the retailer thinking about what they could do to improve their situation rather than asking the landlord to cut costs. Their own data showed us some terrific profitable opportunities.
Fix stock availability first, because every empty facing is a sale already lost. Revenue and profit lift, stock turn improves, which frees up cash that was sitting on shelves doing nothing.
Better performance makes the business more valuable to its suppliers, and that standing becomes the basis for negotiating better buying terms. Each of those gains is within the retailer’s control, and each compounds on the last.
This out of stock situation was one of four profit beneficial ideas we saw in their data.
Rent negotiation still matters. At lease renewal is a good time. But a tenant negotiating from demonstrable strength, with better numbers and stronger supplier support behind them, is having an entirely different conversation to one asking for relief.
Good POS facilities are vital here. Sales per square metre, category performance, lost sales through stockouts and automated replenishment built from actual customer demand are all ordinary functions of the software. AI Insights reads the same data and reports which categories are leaking profit.
Chasing a landlord is exhausting and rarely productive. Working on the business almost always returns more, and it returns it sooner.
Tower Systems supplies POS software to specialty retailers across Australia and New Zealand, with the stock and sales reporting these decisions rely on. We back our software with retail business performance insights.
We love helping local retailers thrive.
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