Covid-19 News Updates

Premier Investments slams Westfield owners over coronavirus management

An owner of iconic retail brands ranging from Peter Alexander to Smiggle has hit out at the nation's shopping centres, questioning their handling of the public safety threat posed by Covid-19.

Premier Investments (ASX: PMV) executive director and Premier Retail CEO Mark McInnes issued a statement today criticising shopping mall owners in general, but it also took aim at Westfield centres owner Scentre Group (ASX: SCG).

"This issue is very real for Premier Retail - we have had two incidents in Scentre Group's Carindale mall where our team members were exposed to COVID-19-positive customers, and in both instances, when Scentre was notified, they took no action," McInnes alleges.

"We were made aware of these incidents by the affected customers themselves and the Queensland Health Department.

"We then notified Scentre, who to our knowledge took no steps to notify the other tenants, customers or the community of Carindale that positive COVID-19 cases had been shopping in the mall."

McInnes emphasises the deadly nature of the virus and claims "it is unacceptable for landlords to play roulette with the lives of retail employees and customers by not doing everything they can to protect them".

"We made the toughest decision to close our stores and stand down our team yesterday because we could not allow our team members, our customers and their families to continue to take the risk posed by our continued trading," he says.

"We agree with the statements made by the Prime Minister and the State Premiers and our Chief Medical Officers that everyone must limit their movements to the maximum extent possible in order to protect each other and our fellow citizens.

"At the same time, we know that the economic impacts of the closures forced by COVID-19 are real, especially for our team members who we have had to stand down."

He says these team members are feeling the economic pain, as are all hard-working Australians who have found themselves inexplicably standing in a Centrelink queue this week.

"Many senior business leaders are setting the right example by suspending their pay and entitlements during the shutdown," he says.

"The Premier Board and senior management team have done this so that we share the pain and show our team that we are all in this together.

"Australian shareholders are feeling the pain through the decline in values of their investments, as are millions of Australian superannuees. Many companies have also suspended their dividend payments to preserve capital, and Premier has extended its own dividend payment as a prudent measure."

McInnes also issued the following questions for Australia's retail landlords:

• Why are your shopping centres open when the Prime Minister has asked all Australians to stay at home and the Premier of Victoria rightly says no shopping trip is worth risking a life?
• What OHS systems and medical systems did you put in place to ensure nobody entering your shopping centre had coronavirus for the safety of retail employees who are asked to serve them?
• What actions have you taken with the relevant health authorities to screen customers entering your shopping centres?
• Where you have been made aware of infected customers and workers entering your shopping centres, have you taken all steps to advise all your tenants, all your customers and the entire local community of the risk?
• Knowing the catastrophic impact of COVID-19 health restrictions on trade, what financial assistance have you offered your retail tenants to keep people employed in the short and long term?
• Have all landlords across Australia reported to their customers and communities all instances where COVID-19-positive reported cases have visited a shopping centre?

In a response, a Scentre Group spokesperson said its retail partners and centre management followed the correct Queensland Health protocols at Westfield Carindale.

"The Queensland Health advice was these individuals posed no risk to any customers, retailers or employees," the spokesperson said.

"As a precaution, the relevant retailers closed their stores temporarily for deep cleaning. Centre management also conducted additional cleaning."

Updated at 3:09pm AEDT on 27 March 2020.

NSW announces $1 billion fund to support businesses and jobs

The NSW Government has announced a second stimulus package that will direct $1 billion to businesses and the state's most vulnerable residents. 

The fund is targeted at keeping people back in jobs primarily, but struggling businesses are set to benefit from tax cuts and the deferral of specific fees and charges.

For businesses with payrolls over $10 million, payroll tax will be deferred for six months.

Businesses with payrolls under $10 million will receive an additional three-month deferment of payroll tax on top of the three-month waiver already announced in the State's first stimulus package.

NSW will also defer gaming and lotteries tax for clubs, pubs and hotels on the condition that these funds will be used to retain staff.

For businesses with less than 20 employees that lease space from the State Government, rents will be deferred for six months.

The parking space levy has also been deferred for six months.

"These are unprecedented times and if we are to emerge in the best shape possible we need to ensure businesses keep their heads above water and keep employees on the books," says NSW Deputy Premier John Barilaro (pictured).

"We need to do whatever it takes to help businesses stay afloat so that they can hold onto as many jobs as possible as we get through this crisis. We will also be there to support those most vulnerable to ensure no one is left behind."

The $1 billion fund will also be used to create new jobs and retrain new employees. The NSW Government says it is already being used to employ 1,000 new staff at Service NSW.

Additionally, NSW will be allocating $34 million to boost funding to prevent homelessness, $30 million to boost the Energy Accounts Payments Assistance scheme, $10 million to support charities, and $6 million funding for Lifeline's operations in NSW.

The extra $1 billion in funding follows a $2.3 billion package announced last week which included a $700 million boost to health services and $1.6 billion for tax cuts and job creation.

"The NSW Government is leading from the front with a package which complements the stimulus measures delivered by the Commonwealth and RBA," says NSW Treasurer Dominic Perrottet.

"Our expectation is that any relief provided by the NSW Government will be used to contribute to help businesses stay in business and people stay in jobs. It's vital we keep people employed and ensure we have the ability to rebound when things improve."

Updated at 12:15PM AEDT on 27 March 2020.

Woolworths Group to recruit 20,000 extra staff

Australia's largest retailer is going on an aggressive recruitment drive in a bid to meet "unprecedented demand" for food and drinks.

Woolworths Group (ASX: WOW) has today announced plans to hire up to 20,000 new roles across its supermarkets, e-commerce, supply chain and drinks businesses in Australia over the next month.

The move follows a decision from Woolworths subsidiary ALH Group to stand down 8,000 employees across its pubs and pokie businesses.

The company expects the recruitment drive will also help scale up online operations to support the changing shopping needs of the community during the health crisis.

"These are uncertain times for many industries and we have an important role to play keeping Australians employed through this crisis," says Woolworths Group CEO Brad Banducci.

"Our top priority as we continue delivering an essential service to the community is upholding customer and team safety through clear social distancing rules and elevated hygiene standards.

Banducci adds there will also be more hours for existing team members.

"Our immediate hiring focus is the redeployment of our ALH team members impacted by this week's mandatory hotel closures," he says. 

"We have already placed around 3,000 of those impacted into new roles across BWS, Dan Murphy's and Woolworths Supermarkets and will continue to take expressions of interest.

"These new roles will not only help us better serve the increase in demand we're seeing in stores right now, but also allow us to scale up home delivery operations in the months ahead."

The company is preparing to offer up to 5,000 short-term roles to Qantas Group employees taking leave without pay, including more than 1,500 in its distribution centres.

Woolworths Group is standing up similar streamlined application processes with the likes of Village Entertainment, Michael Hill Jewellers, Cotton On, Accor and Super Retail Group. It expects to make thousands of short-term roles available to employees from these businesses.

"We're working with a number of customer-focused businesses impacted by recent government measures to stop the spread of COVID-19," says Banducci.

"We're hopeful these businesses will bounce back strongly once this crisis passes, and we want to do our bit to help them - and their people - get through the short-term challenge.

"We're confident the strong service skills and work ethic of candidates from these businesses will be highly transferable to Woolworths."

Updated at 12:08pm AEDT on 26 March 2020.

S&P downgrades rating for "fundamentally well managed" Virgin Australia

Virgin Australia (ASX: VAH) has received its second credit rating downgrade in almost as many weeks, with Standard & Poor's (S&P) expecting a cut to the airline's variable costs will not be enough to offset its collapse in revenue.

A decision to cut domestic capacity by 90 per cent and suspend subsidiary Tigerair have led Virgin's rating to be reduced from 'B-' to 'CCC'.

S&P estimates half of Virgin's costs are fixed, and the positive working capital benefit provided by forward bookings and the Velocity Frequent Flyer business is now likely to partially unwind.

"As a consequence, Virgin Australia's previous A$900 million unrestricted cash buffer is likely to materially reduce in the very near term," the ratings agency said.

"Virgin Australia is 90 per cent-owned by Etihad Airways, Singapore Airlines, Nanshan Group, HNA Group, and Virgin Group. To varying extents, each shareholder is experiencing their own challenging industry conditions."

S&P's analysis does not take into account any extraordinary support from the Australian government, although it does believe the government has an incentive to support Australian carriers.

"We note that the government has taken steps to waive aviation fuel excise, air navigation charges, and security fees.

"In addition, the government has made public statements signaling that it is carefully considering further support measures.

"We note that Virgin Australia currently employs about 10,000 people, although about 8,000 have recently been stood down."

Despite the downgrade, which follows a cut from 'B+' to B-' last week, S&P forms the opinion Virgin Australia is "fundamentally well managed and that the Australian domestic market dynamic is fundamentally sound".

"The airline has successfully repositioned itself as a full service carrier, has the youngest domestic fleet, a dual-brand strategy, and integrated frequent-flyer business.

"In our opinion, management has taken decisive action to improve the long-term viability of the airline, including resetting the cost base in loss-making parts of the business such as Tigerair Australia, as well as exiting underperforming international routes and operating bases.

"Absent the Covid-19 shock, we consider that management had appropriately focused its efforts on cash generation and maintained liquidity levels in line with most of its major Australian corporate and international airline peers."

Updated at 11:34am AEDT on 27 March 2020.

Adairs, Review, Black Pepper and JETS Swimwear to shut down bricks & mortar stores

More retailers have announced store closures in the face of lower in-store foot traffic and Covid-19 social distancing requirements.

Adairs (ASX: ADH) will temporarily close all of its Australian stores from close of trade on Sunday 29 March 2020.

This follows the group's decision to shut down its six Adairs stores in New Zealand on Tuesday in accordance with strict NZ Government requirements.

Stores in Australia and New Zealand will be closed for an initial period of four to six weeks and will reopen with the direction and advice from the Governments at that time.

As a result, 90 per cent of Adairs staff, or approximately 2,000 people, will be stood down, but will be given access to their leave entitlements.

Both Adaris and furniture brand Mocka will continue to operate online in Australia during this period.

"These store closures are a sad and very difficult time for our store teams and those who support them in our Customer Support Office," says Adairs CEO and managing director Mark Ronan.

"We are committed to our team returning to Adairs as soon as we believe it is safe to reopen our stores so that we can all go back to doing what we love delighting our amazing customers."

PAS Group brands suspend trade

Brands under the PAS Group (ASX: PGR) umbrella will suspend trade in physical stores to comply with the Federal Government's social distancing measures.

To ensure the safety of its staff PAS Group will shut down its approximately 230 bricks & mortar shops for its diverse portfolio of retail brands which includes Black Pepper, Review, and JETS Swimwear.

The company's Review concessions in Myer will remain open offering limited services.

"Our thoughts are with everyone affected by this unprecedented crisis which has already caused an untold level of despair and uncertainty to so many people and businesses," says PAS Group CEO Eric Morris.

"The actions announced today have been put in place to ensure that the health and wellbeing of our customers, employees and the community are prioritised above all else."

All employees affected by the store closures will be stood down, as well as a number of support office staff.

Updated at 11:28AM AEDT on 27 March 2020.

Retail Food Group cuts working hours, stands down staff

A strong performance from bakeries and pizza stores has not been enough to prop up the franchise network of Retail Food Group (ASX: RFG) from depressed sales due to Covid-19.

The company announced this morning it would be consulting with personnel to either stand down or reduce the working hours of the majority of staff.

RFG notes whilst Brumby's performance has continued to exceed expectations over the past few weeks, recent trading data supports management's expectations for a significant reduction in customer count across the group's domestic franchise network.

This has been most keenly felt at outlets within shopping centres as a direct response to the Covid-19 outbreak and increasingly more stringent measures introduced by governments.

RFG executive chairman Peter George notes a strong link between the Group's performance and that of its franchise network, which has been impacted by rapid changes within the retail market.

"A large majority of our franchise partners are facing an extremely difficult trading environment, particularly within shopping centres, as consumers react to the increasingly onerous measures taken by government, and of course are focused on more immediate issues such as their and their family's health and safety," says George.

"As a responsible franchisor it is necessary for us to take a long-term and pragmatic approach to best assure the future sustainability of our franchise network for all stakeholders, to ensure our costs are reduced to match our anticipated revenues in the foreseeable future, and to best position RFG and its franchise network for a return to less challenging times.

"We remain focused on providing practical and meaningful support to our franchisee partners, including financial assistance for those who require it most, and are continuing to closely monitor the preventative actions taken by government and regulators in the markets that we operate in and their potential impact on our business."

RFG employs around 500 people directly, but there are thousands of staff employed by its franchisees around the country.

The company does not actively track the total number of staff employed by the franchisees themselves. However, in a submission to the Franchising Code of Conduct Inquiry, which released its findings in March last year, the company claimed the network employed approximately 15,000 team members across the country.

Those people were employed across more than 1,000 franchisee outlets in Australia, but in RFG's latest half-yearly results released in February it notes the store count has fallen to 984 outlets across its domestic bakery/café, coffee retail and quick service restaurant (QSR) divisions. 

Updated at 10:37am AEDT on 27 March 2020.

Further lockdowns being considered in NSW

The next level of lockdowns could be coming soon for residents of New South Wales as State Premier Gladys Berejiklian considers tightening restrictions ahead of the rest of the nation.

Speaking at a press conference this morning, Premier Berejiklian says a number of conditional thresholds will need to breached before she pulls the trigger on 'Stage Three' lockdowns.

These include whether the community is following self-isolation guidelines (based on factors like Opal Card usage, foot traffic in busy areas, public transport usage etc.), the number of people presenting to hospital, and the rate of community-to-community transmission.

"It's not one number. If I gave you a number and said this is the trigger point that would be a mistake," says Berejiklian.

The State is also planning on introducing a second stimulus package which could include rental relief for businesses and households.

Berejiklian says the State Government is finalising the details of that stimulus package which will be announced sometime today or tomorrow.

These proposed measures come as NSW hits 1,405 confirmed cases of Covid-19.

In total, Australia now has 2,991 confirmed cases of the coronavirus and 13 deaths.

NSW is leading the nation by far with its number of confirmed cases, followed by Victoria with 520, Queensland with 492, South Australia with 235, Western Australia with 231, the ACT with 53, Tasmania with 45, and the Northern Territory with seven.

Updated at 10:23am AEDT on 27 March 2020.

Kathmandu to close Australian retail network

Following in the footsteps of fellow listed retail groups Kathmandu (ASX: KMD) will be shutting down its Australian store network from 5pm today.

Kathmandu, which also owns surf brand Rip Curl and footwear retailer Oboz, says the closures are the result of social distancing measures imposed by the Government.

As such, retail store and head office staff, with the exemption of a skeleton crew, will be stood down without pay for four weeks. Staff will be able to access leave entitlements and government assistance.

The Australian shutdowns follow the closures of Kathmandu outlets in New Zealand on 25 March. Stores in Brazil, North America and Europe are in similar situations with wholesale customers and offices closed due to government mandated closures or lockdowns.

Online retail continues to run on a business as usual basis in Australia, Europe and the USA. However, in New Zealand, online distribution has been suspended.

Kathmandu is in the process of negotiating a "fair rental outcome" with landlords to ensure rental costs align with sales performance.

Other cost saving initiatives undertaken by the company include cancelling inventory orders and slashing senior management salaries by 20 per cent until further notice.

In light of the Covid-19 situation the KMD board has suspended dividend payments until normal trading conditions can resume.

"Our total focus is to protect the health and wellbeing of our terms and customers and ensure business continuity," says Kathmandu CEO Xavier Simonet.

"I am so grateful to all our teams around the world for their resilience in this situation of uncertainty and challenges."

Updated at 9:10am AEDT on 27 March 2020.

Key regional flights could be revived after ACCC call on Rex

After ceasing all its flights except in Queensland earlier this week, Regional Express (ASX: REX) may have a shot at reviving 10 key regional routes due to a regulator decision on coordinating with competitors.

The Australian Competition and Consumer Commission (ACCC) has granted Rex interim authorisation to coordinate flight schedules for the routes with Virgin Australia (ASX: VAH) and Qantas Airways (ASX:QAN) during the Covid-19 pandemic.

The interim authorisation will also enable Rex, QantasLink and Virgin to share revenue from providing services on the routes.

The decision is onditional on airlines charging fares no higher than those in place on February 1, 2020, which means they will not be able to coordinate to raise prices.

"We recognise this is an urgent request. This authorisation will help provide certainty for regional flight operators to support services on these routes for those who need to use them," says ACCC chair Rod Sims.

"We hope that this temporary measure will also support airlines' ability to again compete with each other on these routes once the pandemic crisis has passed."

"Airlines are facing significant challenges due to the COVID-19 pandemic, including rapidly escalating travel restrictions. The ACCC stands ready to urgently assist airlines with any coordination arrangements that are necessary and appropriate during this crisis."

The routes concerned are:

New South Wales

• Sydney -  Wagga Wagga (Rex and QantasLink)
• Sydney -  Dubbo (Rex and QantasLink)
• Sydney -  Albury (Rex, QantasLink and Virgin Australia, noting Virgin Australia has announced it is suspending services on this route until 14 June 2020)
• Sydney -  Armidale (Rex and QantasLink, noting Rex has announced it is suspending services from 6 April 2020)

Victoria

• Melbourne -  Mildura (Rex, QantasLink and Virgin Australia, noting Virgin Australia has announced it is suspending services on this route until 14 June 2020)

South Australia

• Adelaide -  Port Lincoln (Rex and QantasLink)
• Adelaide -   Whyalla (Rex and QantasLink)
• Adelaide -  Kangaroo Island (Rex and QantasLink, Rex has announced an exit in July 2020)

Queensland

• Cairns Townsville (Rex and QantasLink)
• Townville Mount Isa (Rex and QantasLink)

The ACCC has been busy finding ways to allow competitors to coordinate with one another in the best interests of the nation, but without compromising consumer rights and any potential for collusion. Other decisions like this include for supermarkets to ensure supply and medical technology companies to to coordinate supplies and manufacturing.

Updated at 6:22pm AEDT on 26 March 2020.

Brisbane food precinct launches takeaway app to skirt hefty Uber charges

With restaurants forced to boost their takeaway credentials to stay afloat amidst Covid-19 social distancing measures, a shopping centre in Brisbane's northern suburbs is easing the burden.

Everton Plaza has launched an app so its tenants can bypass the hefty percentages taken by food delivery services such as Uber.

"All restaurants within the precinct are still cooking up your favourite dishes and now you will be able use the app to browse their menus, pre order, pay and pick them up all on one simple and easy to use platform," the food precinct said for the app's launch today.

"The app will allow you, not only to keep eating delicious food from the comfort of your home, but also to keep supporting local businesses in these unprecedented times.

"Unlike delivery giants, Uber Eats and Deliveroo, there will be no big fees charged to the foodies, which will allow you to help keep your local food businesses alive one order at a time."

The precinct's hospitality tenants include Comuna Cantina, Corbett & Claude, Sichuan Papa, 5 Boroughs, Stellarosa, Sweeties, Acai Brothers, Domino's and Banh Mi & Rolls. 

"Measures have been taken to adhere to the Federal and State Government guidelines to ensure your food and health safety, and in doing this, the outlets have made the pick up process contactless," the precinct said.

The 'Park Lane at Everton Plaza' is available on iOS and Android.

Uber itself has taken stock of the difficulties faced by restaurants and caterers at this time, and has offered Australian businesses a series of new initiatives including $5 million in promotional funding.

Is your business or business partner thinking outside the box to find innovative solutions during these challenging times. If so, drop us a line at [email protected] 

Updated at 5:32pm AEDT on 26 March 2020.