A popular butcher given the chop by Westfield after 41 years for “no reason” says the shock decision will cost him up to $4 million.
Craig Cook, who operates 12 Natural Butcher stores in Sydney and Newcastle, was unceremoniously booted from his flagship Bondi Junction location — where workers are this week on-site demolishing the costly fit-out — after Scentre Group decided not to renew his lease at the end of last year.
The award-winning butcher is now calling for the law in NSW to be changed to give greater security for small businesses operating in large shopping centres, in line with South Australia where tenants must be given preferential right of renewal when their lease expires.
“If I was an independent and that was my only shop, I’d have lost my home and lost everything just getting out of there,” he told news.com.au.
Mr Cook’s lease expired at the end of August after eight years.
After repeatedly pressing for an answer about renewal, in early September he was told he was on “holdover” while Scentre Group considered making changes to the food precinct.
His leasing agent was informed via text message just before Christmas that the shop had been leased to a competitor, Vic’s Meats, and Mr Cook claims that Scentre Group representatives refused to budge or give any explanation at several meetings.
He describes himself as the “definition of an ideal tenant” and can’t understand the decision, particularly as he just renewed his lease at Westfield Kotara in Newcastle.
“I’ve been in Bondi Junction for 41 years, we were in the David Jones food hall and they enticed me eight or nine years ago to come down there,” he said.
“We spent $1 million building the shop, we’ve traded well, we just naturally expected we’d get a renewal which is common courtesy everywhere. We’ve never dishonoured the rent, we traded all through Covid during very trying times, the butcher shop is performing well. We never got any rent relief or assistance other than a little bit of government relief. Sadly we’re at a loss. Our brand is strong, we were nominated for best butcher in Australia recently. There was no grounding we could find for it, why they’d gone behind our back and done this, to put a like-for-like butcher back in.”
Mr Cook was paying nearly $300,000 a year in rent, after being hit with an 8 per cent increase in the holdover period.
As part of the “make-good” clause, he must spend another $80,000 or so to strip out the entire store down to the bare concrete, paying full rent during that two-week period.
Five staff have been affected, but he says he is trying to place them at other stores where possible.
“My main focus now is colleagues and other small businesses that are in shopping centres,” he said.
“It’s dire for an independent. I’m lucky, I’ve got a few stores and I can push on. But we’re looking at a $3 million goodwill loss and $1 million for the fit-out, $75,000 to $80,000 (to demolish it), enormous wage payments to some of our long-serving members there. All in all, a loss to the tune of about $3-4 million in goodwill and assets.”
Mr Cook said he was lobbying the meat industry to call for changes to the law.
Butchers are particularly vulnerable to this kind of action, he said, because of the extremely high cost of installing things like refrigeration and drainage, with very little of the fit-out salvageable.
“A six- or seven-year lease just doesn’t cut it for the level of expenditure,” he said.
“The first three years you spend building up the store, the next three years paying off the loan, finally you get some breathing space to make some money. The little person in these shopping centres have got to be protected from this kind of action. If we’re going to go into these centres and fit them out we need to be guaranteed an opportunity (to stay on). Who can risk spending $1 million on a fit-out knowing they may not be renewed?”
Now, he said, it pained him to see the “beautiful store going to the tip”.
“My accountant said, Craig, this is not good — there is no value in your business,” he said.
“You say your small business is worth $100,000 or $1 million, you can’t say that because it’s only worth the landlord’s signature. If the leasing person decides to lease it to someone else, your asset’s gone. Maybe your home, too, if you’ve put it up to back it.”
Mr Cook questioned whether the publicly listed Scentre Group was making good use of shareholder money, as he understood Vic’s Meats was given similar rental terms, and there would likely be downtime of at least three months for the new shop to be built.
“This is all shareholders’ money being spent for a like-for-like butcher,” he said.
Earlier this month, a similar leasing dispute broke out after the owner of a Chinese restaurant at Westfield Chatswood resorted to sleeping in their store and hiring a security guard to avoid being evicted.
“It seems like the leasing people have this unbelievable power over every tenant, small and big, but they seem to push the smaller tenants around,” Mr Cook said.
One commercial real estate industry veteran, who asked not to be named as he deals with Scentre Group, said, “The NSW legislation needs to reflect the South Australian legislation giving the retailer the last right of refusal before the store gets leased out from under them. This case should be put in front of the NSW government to push for that change, to give them rights.”
A Scentre Group spokeswoman said Craig Cook The Natural Butcher “will be leaving Westfield Bondi soon”.
“Their lease expired in September 2023 and we have allowed them to remain until June 2024,” she said in a statement.
“Demand for space at Westfield Bondi is high and retailers are actively presenting new and exciting concepts to us. Our team are focused on curating the best retail offering to meet the changing demands of our customers. We are pleased to announce Vic’s Meats will be joining the centre. We believe they will be very well received by our customers at Westfield Bondi.”
She added, “We have plans for the next evolution of Westfield Bondi which includes introducing elevated health and wellness and dining experiences. This will be done in a phased approach.”
Vic’s Meats has been contacted for comment.