Report confirms rapid growth in retail floorspace since 2000
RGDATA's Tara Buckley: Good national and regional strategic guidelines on retail development in place, but there is a need for planning policies to link with sustainable transport initiatives, and for greater consistency across the local authorities.
RGDATA planning study reveals need for greater consistency across local authorities
RGDATA’s Tara Buckley: Good national and regional strategic guidelines on retail development in place, but there is a need for planning policies to link with sustainable transport initiatives, and for greater consistency across the local authorities.
A major report from the Retail Grocery Dairy & Allied Trades Association (RGDATA) has revealed a rapid expansion in retail floorspace since 2000, but that this development has not delivered a boom in retail employment. The study, which was conducted by leading planners MacCabe Durney and Barnes Consulting, and which assessed five Irish towns to see how their retail development was encouraged by the local authorities, reported a number of other key findings, namely; that the planning system is facilitating competition, and that it is leading to the emergence of price players in the market. Instead of An Bord Pleanala refusing applications on competition grounds, they did so on the basis of either traffic, zoning distance from the town centre or design grounds.
While Sligo, Athlone, and Enniscorthy are examples of towns that have integrated new retail development with the existing town centre function, in Donegal town, the local authority failed to apply the Retail Planning Guidelines and consequently, had the grants of permission to shops overturned by An Bord Pleanala on a number of occasions.
Growth in retail space
The study conducted by Ireland’s leading planners MacCabe Durney and Barnes Consulting reveals that shopping centre accommodation has more than trebled in the last five years from 400,000 sq m to 1,500,000 sq m. Enough space to create 118 new Croke Park pitches.
Retail warehouse accommodation has increased from 185,000 sq m to 800,000 sq m over the same period. And current planning permissions and building plans for stores that have yet to be developed suggest that the shopping centre and retail warehouse sector can be expected to grow by a further 40% in the medium to long term, depending on local economic conditions.
A major driver of growth in the retail grocery sector has been the discounters, Aldi and Lidl, who have opened 135 stores with a combined floor space of 193,200 sq m since 2000. At the same time Tesco has increased its floor space by 64,400 sq m since 1997, with 22 new stores.
Competition and retail planning
Mac Cabe Durney and Barnes suggest that the level of new entry and the expansion of existing retailers proves that the retail planning guidelines are not inhibiting competition. They point out that the fact the discounters can have achieved such scale of operations over such a short period suggests that the planning system is actually facilitating competition and leading to the emergence of price players in the market place.
However the retail expansion is not all good news, says RGDATA. The expert study found that while employment in the retail sector has continued to grow in absolute terms, the proportion of those employed in the sector as a percentage of the overall number employed in all sectors has not changed significantly. In 2002, 14.2% of the total workforce was employed in retail/warehousing activities. In 2006, the workforce employed in these activities was 14.3%. While there has been a significant shift away from traditional industrial and agricultural employment towards service employment it has not been reflected in the retail sector. Analysis of CSO statistics shows that there is no correlation between the increase in floor space and a growth in employment.
Bord Pleanala decisions reviewed
The MacCabe Durney and Barnes study also carried out some pioneering research into appeals made to An Bord Pleanala on 90 retail developments over a 6 year period. Of the total number of applications, 59 were for supermarkets, while 31 were for discount stores. This research revealed that; 22 (24%) local authority decisions on retail developments were reversed by the Board; 15 had been decisions to grant permission in the first instance; and 7 had been decisions to refuse permission.
An Bord Pleanala has not refused permission for a retail development on the basis of the impact of that proposed development on other existing retailers. The board has not based its decisions on grounds of competition. Instead applications were refused on either traffic, zoning, distance from the town centre, or design grounds.
Five Irish towns were reviewed to see the manner in which retail development has been encouraged and facilitated by the local authorities concerned and individual retailers and developers. Generally, the study concludes that Sligo, Athlone, and Enniscorthy are examples of towns that have approached new retail development in a way that integrates the existing town centre function with the provision of new facilities. On the other hand, in Donegal Town, the local authority failed to apply the Retail Planning Guidelines in several applications for planning permission for shops and had the grants of permission overturned by An Bord Pleanala on a number of occasions. In Youghal, the local authority has granted permission for extensive edge of town retail development which has had negative consequences for the vitality and viability of the town centre, says the RGDATA report.
Local authorities adopt inconsistent approaches
While the study found that there were good national and regional strategic guidelines on retail development in place, the authors concluded that local authorities can compete for large retail developments in their area because of the obvious rates gain and development levy bonus involved in acquiring a new development. The study claims that local authorities often have development levy schemes, parking ratios and rates charges, which confer advantages on out of town sites.
The report’s authors also conclude that many local authority town parking schemes push customers away from the town centre and towards out of town shops, where free surface car parking is often available. The inconsistency involved in local authorities facilitating and encouraging large out of town stores, while making it less attractive to shop in town centres, where businesses are often subject to a higher rates demand, is pointed out by the Study team. The study suggests that national guidance may be required to ensure greater consistency across local authorities in the application of the relevant national guidelines on retailing and sustainability.
The Guidelines are working
One of the Report’s authors, Fergal MacCabe, said that the report shows that the Government’s Retail Planning Guidelines are working. He said; “ This is one area where Ireland has made a success of its planning regime. By taking an active and plan led approach to the development of new shopping facilities, Ireland has managed to avoid the very worst excesses of out of town retailing that have been witnessed elsewhere in Europe, the UK and the US. And we have achieved this while encouraging competition and new entrants to the market.”
He continued; “It is likely that if the government had not introduced a considered planning regime for retail developments over the last number of years, the discounters would have found it more difficult to get a foothold in the market here. There growth has been phenomenal given that they did not have any market here in 2000.”
MacCabe claimed that while the message about the Guidelines was largely positive, there were some areas that needed to be addressed. He said; “ Generally the message is positive, but there are areas where action is required. We need to link our planning policies with sustainable transport initiatives. We also need to ensure that shops and shoppers in town centres are not penalised by unbalanced parking regimes – it makes no sense for local authorities to introduce aggressive town centre parking charges, while at the same time granting permission for edge of town stores with no parking charges at all. Joined up thinking is need on this aspect.”
Commenting on the Report, Tara Buckley, Director General of RGDATA praised the authors for their work and said that the Report would be of immense benefit to policy makers, retailers and planners in the coming years. She added that she hoped the report will inspire greater consistency in the manner in which retail planning is approached across the different local authorities.