The ban on trade on Sundays caused controversy not only because of allegations of pointless restrictions on economic freedom. Business started counting potential costs. Unfortunately, there is much more to lose than one seventh income. The next few months will likely result in a series of tedious and emotional negotiations between tenants of the area and the owners of shopping malls. Entrepreneurs can not only lose their profits but face reorganization or even Sunday pay.
The ban was intended to protect primarily those employed in supermarkets, giving them the opportunity to rest. Large sales chains are likely to suffer losses but will avoid major financial disturbances. However, the structure of retail is more complex.
SMALL STOCKS IN TRADE CENTERS
Supermarket or discount of food reaches significant turnover regardless of the day of the week. The location of shops offering a specific range can be completely different. Customers of such points are not only people coming there deliberately, but also those who walked around the mall and entered there accidentally. The weekend is the best part of the week for this kind of tour.
Many specialist stores are small in size and thus significantly lower resistance to adverse market factors. The owner of such a point employing several persons may attempt to renegotiate the lease agreement to the commercial area, but the reduction in rent does not necessarily compensate for losses.
The owner of the shopping centre can lose much more
It could be expected that the ban on trade on Sunday meant the automatic closure of shopping malls that day. However, this did not happen because of the statutory exemptions. Pharmacy, bakery and florists are examples of points that can sell seven days per week. However, this does not change the fact that when we enter the shopping mall on Sunday we will see a void.
What does that mean for the owner of the mall? He must pay for light, heating and technical personnel, even though his income will largely disappear that day. Renegotiation of rent can reduce the loss of stores and at the same time cause a significant reduction in income for one of the parties to the agreement.
NEGOTIATIONS WITHOUT PRECEDENS
The vast majority of commercial centre owners and tenants operating there could not foresee the latest ban during the signing of the contract. Negotiation to change rates can be complicated. The rules have been in force for a short time, and this makes it difficult to refer to the case law of courts in similar cases.
At present, however, the economic consequences cannot be predicted, but some experts estimate that the potential losses are jobs expressed in tens one thousand and budget revenue exceeding one billion Gold. Especially can people who work only on weekends get hurt.
A prudent economic policy should create the best possible conditions for the development of entrepreneurship and avoid unnecessary interference. The consequences of the ban on trade on Sunday may be too complicated to simplify to one sentences. Leisure is everyone's job, but it's not obvious that everyone in the trade will take the latest change with joy.
Source: Forbes
Author:
Andrzej Dmowski
Managing Partner Russell Bedford, Doctor of Legal Sciences, Lawyer, Tax Advisor, Restructuring Advisor, Certified Public Accountant – Expert Auditor in Ireland, Certified Fraud Examiner - Expert in Crime Detection and Abuse, Certified Internal Controls Auditor - International Internal Auditor.
Graduate of the University of Cambridge - British Centre for English and European Legal Studies - Faculty of Law and Administration, Graduate and Fellow of the Faculty of Law and Administration of the University of Warsaw.
Specializes in settlement of transactions between related entities - transfer pricing, legal and tax aspects of M&A and issues concerning derivatives of financial instruments.