The curious case of the shopping centre promotion levy

Shopping mall
Shopping mall (Photo credit: pix.plz)

On Sunday I popped into a stationery store in a shopping centre in Sandton, Johannesburg, and noticed that I was the only customer in the store.

“How’s business?” I asked the husband-and-wife owners. They have recently set up shop in the centre, moving from the more high-priced retail shopping space elsewhere in Sandton.

They told me how slow business has been now they are located at the back entrance of this shopping centre. Yes, they have attracted some of their old customers to their new location but winning new customers is proving difficult.

“Isn’t the shopping centre doing any promotion or helping you bring potential customers in from the back entrance?” I asked.

That’s when they opened up about their battle with the shopping centre management just to get a sign at the front entrance to advertise their store. The centre management won’t allow them to do a mail drop at the Post Office in the centre because they don’t want to clean up the mess of flyers lying afterwards on the floor.

One wonders what the shopping centre is doing with the levies that this stationery store and fellow tenants have to pay. I haven’t seen any evidence of these promotional levies been used.

The centre doesn’t advertise in local newspapers. I’ve never heard a local radio ad from the centre, not even during their years of endless renovations. Their website is hardly strong enough to pull in traffic.

Perhaps all the promotional levy booty has gone into paying for the information centre where a half-asleep, half-dead zombie-like apparition mumbles unintelligible information to stupefied customers.

Shopping centre operators could be more active in spending promotional levies on marketing activities that bring feet into their premises. When centre landlords demand 4 to 5% of tenants’ annual rent for marketing, they’ve got to do better than virtually nothing.

Where do these levies go to, many tenants are asking their shopping centre landlords but the only reaction they get is a shove off. Centre management don’t even allow tenants to provide input even when some do advertise.

Isn’t about time that the shopping centre barons show more transparency on what they do with the promotion levies they squeeze from tenants struggling to pay exorbitant rents and desperately trying to attract customers to their stores?

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2 Replies to “The curious case of the shopping centre promotion levy”

  1. This is yet another dismal example of how centres suck tenants dry. In an economy that requires boosting at every turn, instead of rallying around the people paying them rent, centre management considers their work to be rent collection rather than boosting business and attracting customers to the centres. I predict that in the next five years more and more business owners will work from home as their won’t be an incentive to set up shop in a mall!.

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