The Australian boss of e-commerce giant eBay has blasted retail landlords who are attempting to claim a percentage of tenants’ online sales.
eBay’s Australian managing director Tim MacKinnon told The Sydney Morning Herald that he would not support a proposal which forces physical retailers to share a slice of its online revenue with landlords.
The scheme was born after pandemic online sales boomed while bricks and mortal sales suffered, which triggered leasing landlords to draft agreements that would see a fraction of online sales included in the rent.
Landlords argue merchants use the physical stores to facilitate sales made online, such as click and collect orders.
“If eBay said: ‘you know what, we’re playing a role in building the brand of retailers who sell through us… so we want a cut of their offline sales’, I think people would find that pretty objectionable,” MacKinnon said of the proposal.
“If we drive sales for you, you pay a cut to us. If we don’t drive sales to you, you don’t pay anything. We only have the right to charge where we’re driving value, not try and take a cut where we’re not.”
Lawyers and leasing specialists have also rubbished the idea – but the publication reports as many as 80 per cent of leasing agreements signed after COVID-19 have included an online sales clause.
Digital sales were the saving grace for most Australian retailers, with profits bolstered by the pandemic-driven trend of online shopping.
eBay in particular enjoyed huge growth during COVID-19, with the company increasing its active monthly shoppers by one million to 12 million.
“When you see an acceleration in a trend like this, it’s a permanent shift. We won’t see the same level of sales as we saw during lockdown…but they won’t all snap back to where they were,” MacKinnon added.
