Telstra tries to keep pace with digital transformation with brick and mortar buyback

Telstra is set to buy back its retail stores from long-time landlord Vita Group and other independent store owners in a move to keep pace with the digital economy, the telco said.

The telco currently controls 67 Telstra stores, a further 166 branded stores run by independent licensees and 104 stores are operated by Vita Group Limited.

Telstra’s head of consumer and small business Michael Ackland said the move was required to “keep pace with the growing digital economy” and give the telco more flexibility to respond to customer needs.

“This was not an easy decision given that we have enjoyed a long-term partnership with many of our licensees,” Ackland said.

Negotiations with the independent licensees are scheduled to begin shortly and continue for 12 - 18 months. Telstra said this includes plans to offer roles to current store staff in the majority of cases as part of agreed transitions.

The telco said negotiations with Vita Group would begin today.

“As more customers interact with businesses online resulting in changes to the broader retail industry, we think now is the right time to bring back full ownership to further develop a consistent and integrated customer experience across our online channels and store network," Ackland said

“At the height of the COVID-19 pandemic we were able to redeploy frontline staff from Telstra owned stores to assist customers through our digital channels or via the phone.

“It’s this flexibility in how we serve our customers that we’ll be able to unlock with more retail branded stores under Telstra ownership.”

He added that the move would also further "embed responsible business practices through direct employment relationships with store staff, and to have more customer service issues resolved in store".

“Ultimately, we want locals to be getting what they need by visiting their nearest store or speaking with a familiar voice over the phone,” he said.

“We also want our store employees to continue to maintain the high standard of service that as a company we expect of them through our responsible business approach.”

Telstra said it will maintain a large retail presence across Australia while also expanding the availability to purchase and access services via its digital channels.

“We know that in many regional and rural towns, the local Telstra store is a valued part of the community providing support to a range of businesses and residents,” Ackland said.

“Our regional and rural stores will continue to do this under Telstra ownership as well as providing an excellent level of service to local customers.”

Telstra said its Business Technology Centres or T-Partner operators will not be affected by the change.