The British Retail Consortium's campaign to persuade landlords to revise rent payment terms may necessitate a fundamental review of UK property law if it is to succeed.

The BRC has argued that, in a time of rising property costs and falling retail sales, landlords should abandon the traditional requirement for rents to be paid three months in advance in favour of rents being paid monthly and in arrears. The aim is to improve cash flow and bring property in line with 'standard business practice'.

In theory, there may be some very good reasons why property owners should be treated the same as other creditors. But the reality is that commercial property is subject to laws that simply don't apply to other creditors. These laws, designed for the protection of tenants, will substantially undermine the willingness of many landlords to agree to the BRC's demands.

Trade creditors with bad debts can decide, more or less instantly, whether or not to continue trading with a bad customer. Property owners do not have the same choice, as tenants usually have statutory protection and the process required to take back possession of leased property is complex, lengthy and uncertain.

Rightly or wrongly, the property market has some unique characteristics and unless the law is amended to give landlords the same rights as other creditors to suspend business dealings with unreliable tenants, property owners may be reluctant to accept the same payment terms as other creditors.

Changes to the law allowing landlords to take back properties from 'bad' tenants are unlikely, as the potential downside to tenants would far outweigh the cash flow benefits of changing payment terms. There is a real concern that altering rent payment terms may significantly slow the speed of payment. Dun & Bradstreet's Delinquency Score, which measures the risk of companies making significantly late payments, makes depressing reading for landlords. Many successful retailers are among the slowest to pay creditors.

As a compromise, landlords might be more willing to accept the BRC's proposals if the additional risk was offset by some kind of additional security. However this, too, is unlikely to appeal to tenants as the cost of having, say, the equivalent of three months rent 'on deposit' with the landlords' bankers would wipe out the cash flow benefits. Besides, who will pay for the additional cost of rent collection?

Charles Woollam, Donaldsons

Stop beating up the big grocers

The Competition Commission's inquiry into the grocery market has sparked a recent tirade against the largest UK retailers.

The retail sector has become the favourite sector to chastise for being successful. However, the five biggest food retailers in particular each have their own strong local CSR policies and have some of the biggest influence on boosting community employment and regeneration.

A policy report by DEFRA on the findings of the Working Group on Local Food has found that 'supermarkets are making it easier for small local producers to supply stores on a regional or individual basis'.

The five biggest food retail chains have created over 710,000 jobs. Each has a community and charitable investment programme with tangible local effects.

And according to the Fairtrade Foundation, Britain is the biggest market for Fairtrade goods in volume terms, mostly due to the support of big name retailers. Global sales rose to £758m in 2005, up a third on the previous year's sales.

In our view the inquiry is a response to a romanticised and blinkered view of consumption patterns and trends, and to an emotional attachment to small outlets. In reality, the consumer is increasingly drawn to supermarkets because of their convenience, range, quality and value, not because of lack of choice.

I expect the report will largely follow the pattern of previous investigations, which have concluded that the market is extremely competitive, so when the inquiry concludes, there will be little change to Britain's grocery market.

Stephen Springham, King Sturge

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