Town Centre and Retailing Methodologies: Working Paper 1 ...

Town Centreand RetailingMethodologies

Working Paper 1:Literature Review

December 2007

© Crown Copyright

ISBN 978 0 7559 6878 7

PLANNING

December 2007

RR Donnelley B54118 12/07

Town Centre and RetailingMethodologies


December 2007© Crown Copyright

Town Centre and Retailing Methodologies Working Paper 1: Literature Review

Contents

1 Introduction 1

2 Retailing Context 2

3 Retail Capacity Assessment 12

4 Retail Impact Assessment Techniques 29

5 Town Centre Health Checks and Vitality & Viability Indicators 79

6 Town Centre Strategies 121

7 Strategic Retail Models 140

Bibliography


1 Introduction 1.1 This Working Paper provides the literature review for the principal retail planning

techniques covered in the current research. The review covers the following:

• A brief review of the retail and retail planning context (Chapter 2) which

identifies retail trends, national planning policy and other factors to set the scene

for reviewing techniques.

• Retail Capacity Assessment (Chapter 3).

• Retail Impact Assessment (Chapter 4).

• Town Centre Health Checks and Vitality and Viability Indicators (Chapter 5).

• Town Centre Strategies (Chapter 6).

• Strategic Retail Models (Chapter 7).

1.2 A full bibliography is provided at the end of the survey.

1.3 The level of detail and extent of the review varies with different techniques – this

reflects the variation in the literature with, for example, significant literature on the

topics of RIA and TCHCs but significantly less for other techniques and the

preparation of TCS’s with effectively no general literature on the role of SRMs.

1.4 In the review there is some reference to case study work (especially where there is

limited general literature) but it is anticipated that more case study material will be

reviewed in the later stages of the study and following the feedback from the surveys

being undertaken.

1.5 The sections do not provide definitive conclusions on the techniques. It is considered

that this would be premature at this stage and it will be important to establish the

views of consultees and the discussion groups on key topics before conclusions can

be reached. Where appropriate significant issues are flagged up in the review –

especially where these have implications for retail policy.

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2 Retailing Context 2.1 This chapter provides a short overview of key issues that affect retailing within the UK

and Scotland and the relevant national retail planning policy framework. Both of

these factors provide a context for the review of retail planning techniques..

Overview of Retail Trends

2.2 Considerable numbers of studies have examined trends in retailing within Scotland,

the U.K. and abroad. It is apparent that retailing is one of the most dynamic and

rapidly changing sectors within the national economy and that change has been a

continuous feature since the mid 1960s. This is summarised effectively in the work of

Professor J. Dawson (2000-2004) and also in the review of NPPG8 (CBRE et al,

2004).

2.3 The key changes in retailing that have been occurring over the past decade include

the following:

• A decrease in total number of shops.

• An increase in the number of large food and non-food superstores - despite

increased difficulties in finding sites.

• New regional shopping centres - in England a number of regional/super-regional

centres have developed - in Scotland only Braehead fits this category. However

smaller centres (albeit still very large) have been developed.

• Growth of retail sales and floorspace.

• Low levels of inflation - this makes productivity improvements and market

penetration all the more important.

• Increase in small store formats - some of which are well suited to markets that

were previously too limited for large scale retail operators.

• Increased ownership of retail businesses outwith Scotland.

• Market concentration of retail sales in less businesses and larger/most

competitive retail stores and locations.

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• Extension of products and services in superstores (food and non-food).

• Strengthening of primary locations and weakening of tertiary locations.

• Larger retailers taking control of the supply chain.

• Changes in accessibility to retail - particularly concerns about reduced

accessibility for the less mobile in both rural and urban locations.

• Use of technology by retailers - to control costs, develop new markets/formats

and to develop customer loyalty.

• Rapid growth of internet based retailing. This is through a combination of direct

delivery to the home of goods purchased over the internet with operators having

no conventional retail outlets as well as retailers using delivery from existing

shops to home for goods purchased over the internet (e.g. Tesco).

2.4 In terms of total numbers of shops the Federation of Small Businesses in Scotland

(2005) and the New Economics Foundation (2002) identified that between 1997 and

2002 50 specialist convenience retailers closed per week in Britain. The number of

independent grocery stores also declined by 25% (8,600) between 2000 and 2005.

At the same time the market share of the major multiple supermarkets was claimed to

increase significantly – although the evidence for this is not clear1.

2.5 Major shifts in the location of retail businesses and concentration into larger units has

been identified for a considerable period of time. Schiller’s (1986) “third wave” of

retail decentralisation was coined in the 1980s. His “waves” were as follows:

• First wave: free standing supermarkets/superstores in out of centre locations –

commenced in the 1960s and 70s;

• Second wave: free standing retail warehouses in out of centre locations – from

the 1970s onwards;

• Third wave: retail warehouse parks in out of centre locations (1980s onwards).

1 Evidence to the 2006/2007 Competition Commission Inquiry into the Groceries Market presented in the Emerging Thinking Report Fig 1 and para 33 (p15) from IGD Grocery Retailing identified the top 5 grocery retailers market share increasing from approximately 74% in 20001 to 78% in 2006 and for the top 10 grocers increasing from 91% to 92%. However Mintel Retail Rankings reports identify a reduction in market share for the top 5 grocers from 74.8% in 2000 to 67% in 2004 and for the top 10 retailers from 81.0% to 77.8% of the grocery market with an overall increase in market size over this period of at current prices of 28%. At the same time Mintel identified an increase in the convenience market sector of 13% with the large convenience store format operators remaining broadly the same at 29.5% of this market.

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2.6 Others have suggested a fourth wave (England, 1999) in relation to the advent of

factory outlet centres although it appears, for the time being at least, that the market

potential for this form of development is limited.

2.7 From the above brief summary it can be seen that, at the same time, there are

pressures for both decentralisation and concentration. Decentralisation in the context

of market pressures to move away from existing centres but concentration to both

larger individual retail units and also towards larger retail centres (including

established town and city centres). Baldock (1998) comments that a UK-wide

national survey of local shopping patterns in 1996 showed that more than 75% of

durable goods sales were made in the top 200 town centres compared to around half

in 1971. Smaller town centres have suffered relative decline over that period.

Indeed he comments that “retailers need only 200 branches to tap three quarters of

national durable sales – so smaller centres increasingly rely on independent retailers

and other town centre attractions”. These trends are a factor in the lament on the

loss of individual distinctiveness of town centres identified in the NEF’s “Clone Town

Britain” report (NEF, 2005).

Drivers of Retail Change

2.8 Thomas and Bromley (2000) summarise the reasons for the changes in retailing

which have been discussed above. They state: “This is now widely recognised as

reflecting a complex interactive relationship between changes in the nature of

consumer demand and commercial pressures for innovations in the system of supply,

strongly mediated by the regulatory economic and planning environment”.

2.9 Key factors have been the following:

• The relative attractions of alternative shopping opportunities have altered in

response to the increasing availability of the private car increasing polarisation

between car owning and non-car owning households with the former able to

take advantage of more (car) accessible decentralised shopping facilities.

• Longer opening hours and pleasant environment in newer shopping facilities

have also proved more attractive.

• In contrast traffic congestion, deteriorating shopping environments and safety

fears have also resulted in concern for, and decline of older shopping centres.

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• There has been a concentration of the market into multiple retailers which has

been able to respond effectively with a range of decentralised retail locations

with extensive car parking

Planning Policy Context

2.10 Although not the focus of the current research it is helpful also to note the principal

changes in national planning policy for retailing in Scotland. This is relevant given

that it was noted above that the policy framework, in addition to market pressures,

has had a major impact on permitting or steering retail development. In relation to

specific retail planning techniques the evolving policy framework has also had a direct

influence and it is important to note these influences at the outset.

2.11 National policy changes are summarised by Hayton (2001). The principal policy

documents are as follows.

Circular 43/71 Shopping Location Policy

2.12 The Circular urged caution in relation to out of centre retail proposals (primarily

supermarkets at that time) with consideration to be given by planning authorities to

traffic and land use implications and encouraging planning authorities to undertake

shopping studies to assess potential retail impacts.

NPG Location of Major Shopping Developments 1978

2.13 This policy introduced a general presumption against out-of-town greenfield

developments and other sites not within existing centres or allocated for retail

development. This was based on the assumption that a static population with limited

rises in income when combined with increases in the efficiency of the use of retail

floorspace meant that, for many areas, there was no justification for increasing the

provision of retail floorspace. In this context it was assumed that major new retail

development would result in the loss of trade from existing centres. New retail

development should, therefore, be directed to “beneficial” locations. This approach

reinforced the line introduced in 1971 guiding retail development to locations

accessible by public transport.

Draft and Final of Major Retail Developments 1986

2.14 This represented a major change in policy with planning authorities encouraged to

facilitate retail development both in existing centres and “where appropriate” on sites

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detached from centres. Impact on existing retailers was not a factor for consideration

but the effect on the vitality and viability of nearby centres as a whole was an

appropriate consideration. The policy was based on being “tailored to the

circumstances of particular areas rather than being based on overall prohibition of off-

centre development” (SDD, 1986). Off-centre sites could now be preferred locations

for certain types of development as restrictions could deny consumers access to

choice and convenience. Hayton comments that “there was, therefore, a change in

emphasis upon the need for established centres to be competitive and to address

their ‘underlying weaknesses’ “ (Hayton 2001).

Draft NPPG8 Retailing 1995 and Final NPPG8 1996

2.15 The 1995 and 1996 versions of NPPG8 made key changes to retail policy providing a

framework which is broadly to that currently in place. This included the introduction

of the sequential approach.

2.16 One notable issue was the proposition in the 1995 draft to provide a general indicator

of significant retail impact. This suggested that retail impact figures of 10-15% would

be likely to be significant. Hayton (2001) suggests that the dropping of this

quantitative indicator may be less significant that it appears in that the principal result

would have been that “it would have been difficult to reconcile the views of planners

and developers as to the impact of specific schemes” (Hayton, 2001).

Notwithstanding this comment it is notable that many retail impact assessments

either explicitly or implicitly identify impacts below the 10% threshold that was

originally identified in the draft NPPG8.

NPPG8 Retailing 1996 and Subsequent Policy Changes

2.17 These documents including the evolution to the current SPP8 will be familiar to the

SE client group and are not, therefore, reviewed in the document. Changes between

the 1998 NPPG8 and SPP8 are relevant to certain detailed aspects of the application

of retail planning methods and these are therefore considered in detail in the

appropriate subsequent sections of this report.

Policy Context Elsewhere

England

2.18 PPS6 was published in 2005. PPS6 is a development from PPG6 incorporating

ministerial statements which were made following the publication of PPG6. Unlike

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SPP8, PPS6 provides detailed comments on a range of planning objectives and

policies. In terms of the retail planning techniques the following should be noted:

• Para 2.3 actively encourages local planning authorities to plan for growth and

manage change in town centres.

• Within the context of development plans LPAs should:

- Assess the need for new floorspace for retail, leisure and other town centre

uses (2.16)

- Identify deficiencies in provision (2.16)

- Undertake “need assessments”. Quantitative need is identified to follow a

retail capacity approach based on forecasting demand through available

expenditure change and turnover of floorspace (2.34). Qualitative need is to

be identified through a consideration of a range of development locations

(2.35).

- Assess the impact of sites identified for retail development (2.48).

• In the context of development control PPS6 identifies:

- That applicants are required to demonstrate (a) the need for development (b)

that the development is of an appropriate scale (c) that there are no

unacceptable impacts on existing centres (3.4).

- In terms of assessing “need” this is preferably based on the development

plan needs assessment using a class of goods approach (3.10).

- In terms of assessing retail impact consideration is to be given to impact on

the vitality and viability of centres. Specific advice is given to the factors that

should be considered in assessing the significance of impact (3.22).

• A separate section is provided in PPS6 (provided in Chapter Four of the PPS)

on the factors to be measured for assessing the vitality and viability of town

centres.

2.19 Specific factors arising from PPS6 in relation to retail planning techniques are

reviewed in subsequent sections of this literature review.

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Wales

2.20 Welsh Technical Advice Note 4 Retailing and Town Centres (1996) provides specific

advice on retail planning issues. It is not a policy document (retail policy is included

with Planning Policy Wales 2002).

2.21 The TAN identifies the following:

• Indicators to be used for measuring town centre vitality and viability (para 5)

• The scope of issues to be addressed in retail impact assessments (paras 6-7)

2.22 Planning Policy Wales identifies that UDPs should allocate sites where there is a

quantitative or qualitative need (10.2.14) and that, in determining planning

applications, LPAs should take into account “consideration of the need for the

development” (10.3.1) as well as “impact on existing centres”. The policy states

explicitly that, in relation to the interpretation of the significance of retail impact, “out-

of-centre food supermarkets should not be allowed if their provision is likely to lead to

the loss of general food retailing in the centre of smaller towns” (10.3.6).

Northern Ireland

2.23 Draft PPS5 Retailing, Town Centres and Commercial Leisure Developments was

published in July 2006. This document is slightly different in structure from those

used elsewhere in the UK in that, as well as providing a broad strategic overview of

policy objectives for Northern Ireland as a whole it also identifies specific policies

closer in character to those of structure plans in Scotland.

2.24 Key provisions include the following:

• Town centre health checks are encouraged and a series of vitality and viability

indicators are proposed (para 28, and Appendix 4). It is noted that the TCHC

will be an important consideration of the town centre strategy.

• Emphasis is placed on the examination of future retail need (para 30-32 and

Appendix 5 – which is described as how to carry out a retail capacity

assessment - a “best practice guide”).

• It identifies that development plans will set out a town centre strategy (para 34)

and identifies issues that should be included within such a strategy.

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Ireland

2.25 Although recent economic development trends in Ireland are significantly different

from that of Scotland or elsewhere in the UK (with economic growth averaging 9% pa

between 1993 and 2005) the planning system has strong parallels with that found in

Scotland and the UK and the retail planning policy framework is also similar in many

respects. In 2005 the “Retail Planning – Guidelines for Planning Authorities” were

published. Many of the key policies and provisions are very similar to those found in

PPS6 and SPP8.

2.26 Key provisions include the following:

• Objectives of planning policy are comparable to those in the UK including

facilitating a competitive and healthy environment for the retail industry, to

promote forms of development which are easily accessible (particularly by public

transport) and to support the continuing role of town and district centres.

• Planning authorities are encouraged to adopt a proactive role for enhancing the

vitality and viability of their town centres (these concepts are very similar to

those used in Scotland and England). This includes the promotion of town

centre strategies which is to be based on the outcome of a Health Check

appraisal of town centres (para 32). This should aim for “a realistic vision for the

centre drawing upon the support of all interested parties and an implementable

programme of action”.

• Planning authorities are required to undertake a broad assessment for additional

floorspace within their development plan area over the relevant plan period

(para 40). Annex 3 to the Guidelines set out an appropriate method for

undertaking this assessment – this follows the conventional retail capacity

approach (reviewed in Chapter 3 of this report). However it also identifies the

need to take into account emerging demands in the retail market and should

provide broad indicators of requirements.

• Guidance is also provided for assessing the impact of proposed retail

developments and that RIAs would need to be submitted by applicants for

planning permission. In determining applications a range of factors that should

be considered by planning authorities is identified (para 65 - this is similar to

para 3.22 of PPS6). Annex 4 provides guidance on the steps to be undertaken

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for RIA however no guidance is provided on the interpretation of the significance

of impact apart from para 65 noted above).

• Annex 2 provides guidance on undertaking town centre health checks and the

vitality and viability indicators that should be considered.

• The principal difference between Irish guidance and equivalent policy in the UK

is the use of maximum floorspace caps for supermarkets and retail warehouses.

For supermarkets/superstores the cap is 3000 sq m sales area apart from the

Greater Dublin area where the cap is 3500 sq m. For retail warehouses in

general the limit is 6000sq m although in certain areas covered by specific

legislation larger stores are possible subject to meeting a range of criteria.

Summary

2.27 This section provides the context for the detailed literature review on specific retail

planning techniques. Key themes that have emerged from this are as follows:

• The retail industry within Scotland as well as within the UK and elsewhere is

rapidly evolving. This reflects a combination of (i) economic growth resulting in

growth of available expenditure for retail purchases; (ii) globalisation of the

industry with pressures for improving the cost base of businesses; (iii) increased

mobility of the majority of (but not all) customers by private car.

• These pressures have supported demand for retail development in locations

with easy access by car and also for increased retail concentration in larger

units and larger centres.

• The planning policy framework has had direct and indirect effects on the retail

industry with indications that increased planning controls could be starting to

have an effect of directing retail developments to town centres. Most recent

indications now are that the proportion of retail development taking place within

town centres in England and Scotland have returned to the levels previously

seen in the mid 1980s (RICS Commercial Property Journal, January 2007).

• Within Scotland retail planning policy has responded to the evolution of the retail

industry (Hayton, 1997, would suggest “following” rather than “leading”) although

this has varied from cautious control during the 1970s to, arguably, an increased

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laissez-faire approach in the 1980s, to greater control from the publication of

NPPG8 in the mid-1990s.

• Many of the planning policy principles and objectives in Scottish planning policy

are comparable to those in other UK countries and also to Ireland. However

there are significant differences between these countries in the role of and

application of specific retail planning techniques.

• Retail planning policy and its effects upon the operation of retailing within the UK

have been considered as part of a series of recent reviews of both the planning

system (e.g. Barker Review of Land Use Planning, final report 2006) and also as

part of Competition Commission investigations into the operation of the grocery

market in the UK (for example the ongoing review into the Groceries Market

2006-2007).

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3 Retail Capacity Assessment Introduction

Overview

3.1 For the purpose of this review “Retail Capacity Assessment” (RCA) is taken to be a

technique, or group of techniques, for identifying primarily quantitative “need” or

“deficiency” in or for retail provision. In terms of quantitative techniques RCA typically

is concerned with an assessment of both future supply and future demand for retail

floorspace.

3.2 In Government Policy Statements there is no clear definition of either retail “need” or

“deficiencies”. Although examination of legal decisions and practice indicates a

general understanding of what would constitute a needs based assessment and the

essential differences between “need” and deficiency”.

3.3 As will be noted in the following review the role of RCA is the subject of considerable

debate. In general RCA in Scotland has a lower profile than in other parts of the UK.

However it is also evident that certain authorities in Scotland place store on this

methodogical approach as a basis for identifying quantitative need for new retail

floorspace e.g. the G&CV Structure Plan policies on retail provision are based on

retail capacity and other authorities e.g. Fife, Perth, Angus have all commissioned

consultants’ studies that include significant retail capacity calculations. Certain

retailers and developers (e.g. Asda responding to the current Competition

Commission inquiry in the grocery market) strongly criticise the use of retail capacity

as a key part of the “needs” test as being anti-competitive and an inappropriate

planning tool.

Lack of Guidance

3.4 Unlike both Northern Ireland and Ireland no detailed guidance on retail capacity

techniques is provided in Scotland, England or Wales. The reviews of both NPPG8

(SE, 2004) and PPG6 (ODPM, 2004) identified that further guidance on good practice

would be useful. Furthermore in the survey that was undertaken as part of the

Scottish review it was concluded that NPPG8 was considered to be unclear in the

context of retail need. In contrast draft Policy Guidance in Northern Ireland (DfRD,

2006) and the Irish Retail Planning Guidelines (Irish Government, 2005) set out in

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annexes the principal steps to be undertaken for establishing quantitative retail

“need”.

What is Need?

3.5 Neither “need” nor “deficiency” are defined by Government Policy. Goddard (1999)

poses the question how is need defined and by whom? England (1999) considers

that quantitative need comprises the following elements:

• The economic capacity in terms of demand arising from expenditure growth

within the catchment area of a proposal.

• Leakage of trade from an area, which suggests lack of provision to meet the

needs of shoppers.

• Retailer requirements – demand from retailers for representation in a particular

centre, and the potential for competition and innovation.

3.6 This approach is supported by that of others including, for example, Baldock et al

(2000) who indicated that, following an extensive survey of planning authorities in

England that “need is mainly interpreted as quantitative retail capacity”.

3.7 The above only provides factors for considering the measurement of “need” (and,

equally “deficiency”). To get a clearer understanding regard has to be made to

relevant legal cases.

Legal Context

Scottish Position

3.8 Part of the debate about the role of need/deficiency relates to the legal context for the

role of need/deficiency as a material consideration for determining planning

proposals. The key reference here is the City of Edinburgh decision (House of Lords:

City of Edinburgh Council v Sec. State for Scotland – summarised in SE, 2004 para

7.12 et seq). In relation to need Lord Clyde concluded that it is: ‘the kind of necessity

which would, for example, justify the sacrifice of some amenity for the purpose of the

development”. However, he accepted that “quantitative deficiency is a concept

different from that of need” which could be assessed by: trends in consumer

expenditure; expenditure reflected in the turnover of the available shopping facilities;

comparing the amount of shopping facilities and the amount of customers in the area;

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and reference to stores in the area trading at a level which is above what would be

expected of them.

3.9 The review of NPPG8 also reviewed the work of Jeremy Rowan-Robinson et al

(2001). Their review states: “this source suggests that lack of need for a particular

development is not a planning reason which would normally support a refusal of

planning permission. In the Hambleton District Council case, the decision was made

on the basis that an applicant for planning permission did not have to justify an

unobjectionable proposal….It is suggested that need should be proven in exceptional

cases where a strong policy of constraint is in operation to prohibit further

development because of possible harm to interests of acknowledged importance.

However in conclusion, Rowan Robinson et al., use a phrase in NPPG1 (and now

repeated in SPP1) that “planning policies and decisions should not prevent or inhibit

development unless there are sound reasons for doing so”. From this, the authors

conclude that “in Scotland an applicant should not, as a matter of policy, have to

justify an unobjectionable proposal” (SE, 2004.” (SE, 2004 para 7.14).

3.10 This analysis is similar to that of England (1999) and Arnold (1998) who also

reviewed the 1998 Hambleton District case and concluded that:

• That need could be a material consideration in certain circumstances, e.g. if

there is evidence of a quantitative or qualitative need which supports

development, but a developer does not have to demonstrate need for a

development.

• That a proposal which would not sustain and enhance a town centre could still

be acceptable if it meets the sequential tests and other key tests in PPG6

(Arnold, 1998).

3.11 The NPPG8 study team conclusions in respect to the role of need/capacity, in a

Scottish context, with regard to the role of deficiency was as follows:

1. Unless there is clear evidence of demonstrable harm to acknowledged planning interests of importance, there should be no automatic necessity to prove the need for retail and associated development.

2. Need can be distinctly separated from quantitative deficiency. The latter can be helpfully addressed by looking at consumer expenditure levels and retail floorspace provision to assess overall balance and whether there is evidence of high levels of trading for particular retailers in any particular area.

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3. Quantitative deficiencies can be taken as a material consideration to be assessed by any planning decision maker as part of Development Plan policy or as part of a material consideration.

4. Studies of retail assessment techniques conclude that it can be helpful on an area wide basis to assess overall expenditure and provision levels in order to assess overall levels of capacity and to inform policy and planning decisions.

5. Quantitative deficiency should not be considered in isolation and arguably greater weight should be attached to qualitative deficiency and impact.

(SE, 2004 para 7.15)

3.12 Interestingly, at para 7.44 of the NPPG8 Review, where the above points are

summarised, the study team concludes that “therefore there must be an appropriate

place for quantitative capacity assessments in the demonstrating of the case for new

retail proposals”. From our reading of the review it would seem that this conclusion is

not logical. Whereas it may be advisable or desirable that such an assessment is

undertaken the conclusion of the analysis of the legal position appears to be that

deficiency alone would not be a reason for refusal but would be a material

consideration in support of an application if this can be demonstrated (as per para 39

of SPP8). But it does not follow that such an analysis is not inevitably required.

3.13 The above is a significant conclusion in terms of the interpretation of the role

of retail deficiency in Scotland and the SE may wish to consider this further

outwith the narrow context of the current study.

English Position

3.14 The position in England is materially different from that in Scotland. This is

acknowledged by England (1999) who notes that the Hambleton position was short

lived when in February 1999 Richard Caborn (as Minister responsible for Planning)

stated “Proposals which would be located at an edge-of-centre or out-of-centre

location…should be required to demonstrate both the need for additional facilities…In

the context of PPG6 and this additional guidance, the requirement to demonstrate

need should not be regarded as being fulfilled simply by showing that there is

capacity (in physical terms) or demand (in terms of available expenditure within the

proposal’s catchment area) for the proposed development. Whilst the existence of

capacity or demand may form part of the demonstration of need, the significance in

any particular case of the factors which may show need will be a matter for the

decision-maker” quoted in England, 1999, pp102-103).

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3.15 The key point from this is that demonstration of quantitative need became a clear

national policy requirement in the determination of applications in England. This has

now been incorporated into PPS6 at paras 2.34 (in the context of development plans)

and 3.10 (in the context of determining planning applications).

3.16 In this regard it is useful to note that there are, therefore, two clear differences

between the position in Scotland compared to that in England:

• In Scotland the issue concerns “deficiencies” as opposed to “need” – the latter

being a stricter test.

• In England there is national policy requirement to demonstrate need for retail

proposals whereas in Scotland addressing a deficiency is a material

consideration which may be a factor in support of an application if it is otherwise

contrary to the provisions of the development. This difference has been noted in

the most recent report of the Competition Commission in their current

investigation of the groceries market (Competition Commission, 2007b, para

25). It is notable that the Competition Commission in the same report (ibid para

153) consider that “the lack of a quantitative need test in Scotland, compared

with England, Northern Ireland and Wales, does not appear to have resulted in a

greater proportion of newly-built supermarkets being in larger size categories.

This appears to suggest that the need test, by itself, does not represent a

constraint on the construction of larger supermarkets”. Conversely it can be

noted that the presence of a needs test in England and elsewhere compared to

Scotland does not appear to be significantly affecting the size and type of

supermarkets that are being built.

3.17 In this section the focus has been on comparing Scotland to England. It should be

noted that current policy in Northern Ireland, Ireland and Wales reflects the position in

England. In both Ireland and N. Ireland specific guidance is provided on the

approach to be adopted for identifying “need”.

3.18 The difference in the status of deficiency/need in Scotland compared to elsewhere is

a factor that results in different emphasis between those recommending the approach

to be adopted for both RCA and RIA techniques in Scotland and other parts of the

UK (notably England).

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Practice in Scotland

3.19 Notwithstanding the legal position in Scotland highlighted above (and indeed the

policy framework summarised in Section 2) it is evident that a quantitative

assessment of retail demand/supply has been undertaken by a range of planning

authorities for at least 20 years. In 1992 Drysdale (SO, 1992) noted that regional

councils interpreted reference to the 1986 National Planning Guidelines to

“determining the extent and general location of opportunities for new forms of

shopping” as a requirement to undertake a detailed quantitative analysis of shopping

provision “in order to calculate, in monetary terms, the gap between expenditure and

turnover and hence the scope for new floorspace”. He comments “the habit of

planning authorities to embark upon quantitative calculations is despite the guidelines

advice not to rely solely on comparisons of supply and demand” (SO, 1992, para

3.42).

3.20 At the present time a number of planning authorities in Scotland are using

assessments of demand and supply to identify the scale of need for retail floorspace

as part of the formulation of development plans. This is clearly seen, for example, in

the Glasgow and Clyde Valley Structure Plan Team (e.g. Technical Report 7/06

Convenience & Comparison Shopping Capacity Assessments at 2011) which is used

to underpin structure plan policies and, in the context of development control,

Strategic Policy 10 of the G&CV Joint Structure Plan 2000 also requires for

developments that are deemed to be departures from the Structure Plan to

demonstrate “clear evidence of a shortfall in the existing and planned supply of land

for …retail development within the appropriate shopping catchment area” (GCVSP,

2000 page 87). Elsewhere in Scotland the more typical approach is an obligation to

demonstrate that developments which are outwith town centres/edge of centre

locations should address quantitative or qualitative deficiencies (e.g. Edinburgh and

Lothians Structure Plan 2015 Policy RET2 or Dundee and Angus Structure Plan

2001-2016 Town Centres and Retailing Policy 4). There are, however, examples of

planning authorities using retail studies commissioned by the planning authorities

which indicate that a lack of quantitative capacity would be a consideration against

retail proposals.

17


Quantitative Retail Capacity Techniques

General Approach

3.21 There is a standard approach which is generally advocated for the calculation of

quantitative retail capacity in support of the identification of either a quantitative

“need” or “deficiency”. England (1999) summarises this as comparing the shopping

supply and demand in the form of existing retail floorspace (and estimated turnover)

in an area and retail expenditure in the same area. An excess of expenditure, in the

form of leakage of spending out of the area, is regarded as an opportunity for retail

provision. More specifically the current turnover estimate is subtracted from the

forecast potential turnover estimate to provide an estimate of what England describes

as “expenditure headroom”. This figure can then be converted into a “floorspace

capacity”.

3.22 Reflecting the differences between England and Scotland some English based

practitioners identify the role of identified quantitative need as the first stage in

undertaking a retail impact assessment (e.g. England 1999, Hillier Parker “CREATE”

technique). England suggests that “a capacity analysis can confirm that any major

new development would result in impact on trade in existing centres” .This statement

although generally true, would depend upon the precise assessment of trade

diversion assumptions (see Chapter 4 below).

3.23 Hargest (2003) confirms that, in a development plan led system the principles

underlying retail capacity should be both sensible and helpful on the basis that it

would be important, in planning terms to identify the extent to which an area is

capable of supporting new floorspace as a result of either increasing affluence and/or

population. He sets out the basic equation that would be used for calculating

quantitative capacity:

Total Available Expenditure – Leakage*

Net Future

Floorspace = Capacity

Turnover rate

- (Existing + Committed

Net Floorspace

Note: the issue of leakage is used by some practitioners and not by others – this is

discussed further below.

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Guidance elsewhere in the UK and Ireland

3.24 As noted above specific guidance on the technique is set out in Policy Guidance in

England, Northern Ireland and Ireland.

England – PPS6 2005

3.25 In England an outline of the approach that should be adopted is provided in paras

2.34 and 3.10 of PPS6. This does not set out a detailed method but indicates the

future demand for additional retail floorspace should be based upon a realistic

assessment of: existing and future population levels; forecast expenditure for specific

classes of goods sold; and the forecast improvements in productivity of floorspace.

In the context of planning applications it states that the need for additional floorspace

should normally be assessed no more than 5 years ahead.

Northern Ireland – Draft PPS5 Annex 6 2006

3.26 In N. Ireland the draft PPS5 Annex 6 sets out a “best practice” guidance prepared by

Roger Tym and Partners (DfRD, 2006). This identifies the following steps that should

be undertaken:

• Define the catchment area for the settlement under consideration. This should

be based upon a household survey and recognise the relationship between

facilities within the settlement and neighbouring centres.

• Estimate expenditure and turnover within the catchment area. The guidance

states that if the former exceeds the latter then there is leakage but if the latter

exceeds the former there would be net inflows of expenditure and the centre

would be “overtrading”.

• Calculate the projected retail expenditure for the principal retail goods

categories (convenience, comparison and bulky goods).

• Convert the resulting figures into floorspace by the use of sales densities – it

notes that sales densities will vary but do not offer advice on how these should

be obtained.

• Deduct existing approved and committed floorspace from the estimated future

requirement.

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3.27 The advice is described in the draft PPS but, in essence, follows the same principles

identified above. At this stage it is inappropriate to provide a critique of the method

but it is evident (e.g. the reference to net inflows being indicative of “over-trading” are

demonstrative of a limited understanding of the operations of retail markets).

Ireland Retail Planning Guidelines Annex 3 2005

3.28 This identifies three stages to be addressed: 1. Existing Retail Floorspace; 2. Market

Demand; and 3. Assessment of Need.

3.29 In the examination of existing retail floorspace the Guidelines emphasise that the

starting point is to measure the health of town centres and to measure the amount of

floorspace. Floorspace data would relate back to a national census undertaken in

1988 updated with development control records or use of a special survey. The

second stage concerns an examination of market demand from a range of sources

including planning records, and consultations with the property industry.

3.30 A “broad” assessment of need is the third stage. This follows the conventional

approach: projecting changes in population and consumer spending. Catchments

should be identified for retail centres taking into account cross-boundary flows and in

urban areas surveys of shopping patterns may be required. The advice states that

“the projected growth in available spending can readily be converted to retail

floorspace using appropriate sales density ratios for different types of retail formats”.

In Ireland there is an Annual Inquiry undertaken by the Government which addresses

issues about net sales areas and turnover of businesses.

3.31 Significantly the guidelines note that “the resulting estimates should be treated as

broad planning guideline requirements which can be monitored and adjusted over

time..” (GoI, 2005).

Variations in Approach

3.32 Although there are slight differences in the emphasis on specific actions for

calculating quantitative deficiencies and need there is a general accordance about

the overall approach and stages that should be adopted. In terms of practice, the

principal variations in assessments that have been observed both in the general

literature and in examination of specific RCA’s relate to the following:

20


Definition of Catchment Area.

3.33 In many instances RCAs are identified on the basis of administrative boundaries. In

rural areas this will typically result in leakage of expenditure to larger towns and cities

– especially for comparison goods. In large urban areas, especially where there is a

strategic planning authority (e.g. G&CV) a wider area can be taken closer to

observed patterns of expenditure (in this regard it is notable that the G&CV identifies

larger catchment areas for the assessment of comparison goods than catchment

areas for convenience goods centres).

3.34 For many planning applications an RCA frequently identifies the catchment area that

would be served by the proposed development rather than a catchment area for a

defined centre. This reflects the focus of the proposer of the development identifying

the level of deficiency purely within the area that would be served by the

development proposal.

Treatment of Turnover Rates

3.35 A key issue in the application of the techniques is whether average or

actual/observed turnover rates are identified for the calculation of retail supply. This

relates both to the examination of the existing situation and for the conversion of

potential available expenditure into floorspace. The most common approach is the

use of national average rates for multiple businesses (from Retail Rankings/Verdict)

but varying notional average rates for independent businesses (with densities varying

according to the size of centre). For example Drysdale states (SO, 1992):

“An important requirement of this exercise is that the “turnover requirement” of

existing floorspace is not an estimate of actual turnover but is an estimate of the

turnover which retailers would regard as normal or reasonable in a market where

demand is matched by supply….it is possible that shops in the area will be achieving

turnovers well in excess of “normal” levels and these levels of actual turnover will be

much higher than the level of turnover requirement estimated in a capacity analysis.”

3.36 The corollary of the above is that, in certain situations, shops could also be trading at

below average or normal trading levels.

Treatment of Leakage

3.37 Examination of RCA studies indicates a split between those studies undertaken that

treat leakage of expenditure as a potential deficiency and those that consider that

21


identified leakage should be continued into the future and deducted from the RCA

calculation (e.g. as shown in the formula above). It can be argued that if leakage

exists this is a clear indication of a retail deficiency and this has been identified as a

material consideration in planning appeals in Scotland. However others have

considered that leakage is an inevitable part of the network of centres (e.g. more

significant centres draw from a wider area – e.g. Glasgow City Centre turnover for

comparison goods would be higher than the available expenditure generated by the

city whereas there will inevitably be leakage from smaller centres). Examples of the

latter include the G&CV TR 7/06 and the Dumfries & Galloway Retail Study (Halcrow,

2006).

Conversion to Floorspace Potential

3.38 The majority of RCA studies convert notional surplus expenditure into floorspace

equivalent (i.e. surplus expenditure divided by average sales density). However

some studies (especially those associated with planning applications leave the

assessment expressed as a monetary value (in effect expenditure leakage from the

defined catchment).

Role of Tourist Expenditure

3.39 In a number of assessments regard is had to available expenditure generated by

tourists in many (especially in calculating convenience capacity) this factor is ignored.

Criticisms of RCA

3.40 There have been significant criticisms of RCA as a planning technique. These have

related to both the theoretical and conceptual aspects of the techniques and also to

practical issues relating to data availability and the sensitivity of the results

generated.

Conceptual Criticisms

3.41 Notwithstanding the importance attached to identifying quantified need in England

and elsewhere it has been the subject of significant criticism. England (1999)

considers that “capacity analysis is most useful for assessing the scope of

comparison goods floorspace but for convenience goods it is less useful” (England,

1999 p101). He also notes that the approach has major limitations:

22


“Above all it is simplistic. The analysis takes no account of the dynamics of the retail

system, particularly for changes to occur in shopping patterns as new developments

take place. It assumes that the retail system is in equilibrium state in the base year

and that the turnover of existing shops will increase very gradually over the forecast

period. In reality, where existing shops are under-trading there will be scope for a

more rapid growth of turnover which will therefore reduce the capacity for new

development. Where existing shops are over-trading there will be less opportunity for

growth in floorspace efficiency and so the potential for new floorspace could be

greater”.

3.42 In their review of NPPG8 the CBRE team (SE, 2004 para 7.16) noted that a range of

criticisms of RCA described by Hargest (Hargest, 2003) points to fundamental

problems with the capacity assessment methodology.

3.43 These criticisms are as follows:

• Any RCA is based on an analysis of existing patterns of expenditure flow (which

is itself a pre-requisite for assessing retention and leakage between centres)

and the RCA must either assume that these patterns will remain constant in the

future or make a manual assessment of changes in patterns based on a

judgement (or on policy aspirations). Retailing is, however, highly dynamic and

constantly changing and the only thing that can be guaranteed is that future

patterns will be different from those found today.

• Through the use of different assumptions RCA introduces value judgements that

rarely can be supported by empirical data. These assumptions will have

profound effects on the results of an RCA.

• RCA normally relies on the use of “average” turnover rates – i.e. it makes a

judgement as to what rates ought to be achieved by different retail sectors,

subsectors and by stores run by the same operator. This creates difficulties in

choosing which rates to use. However the relationship between turnover rate

and viability is not straightforward – the costs of a business operation will vary

between different locations and planners are not privy to this type of information.

• RCA bears little relationship to the realities of the market place. Although

planning is not about serving market needs it is evident that planning policies

that are in fundamental conflict with the market will achieve little. RCA’s typically

23


conclude that small towns have potential for new comparison floorspace – but

there is no demand from operators to occupy this space.

Practical Criticisms

3.44 A key issue that RCA needs to address is that the results are highly sensitive to the

data inputs. This reflects the fact that the calculation of capacity is based on a

subtraction – the closer the expenditure and turnover figures are the greater will be

the susceptibility of the result to changes in assumptions. Morley (2004) comments

“relatively small changes to either future expenditure or average turnover of existing

floorspace will result in disproportionately large changes to the capacity figure. It is

essential that accurate baseline figures are calculated and realistic forecasts made as

to how these are likely to change”.

3.45 As a result of this Morley identifies a number of key sets of assumptions that need to

be examined carefully as part of a capacity assessment calculation. These relate to

the sales densities used (and the extent to which assumptions should be made for

these to grow in the future), expenditure growth rates to be used and the role of the

growth of internet sales. He considers that there are now more proactive data and

information providers available to retail planners but despite this “quantitative retail

capacity assessment is much more challenging than it was a few years ago”.

3.46 Stock (2003) has commented on the problems created by having different data

providers. He noted that there were (in 2003) three primary sources available for the

estimate of available expenditure (MapInfo, Experian Business Strategies and CACI).

However this created more problems rather than solved them. He comments:

“Illustrating the problems that this situation can create, the parties at one recent call-

in inquiry in Stoke-on-Trent were unable to agree the choice of data source. As a

result much debate centred upon the appropriateness and reliability of one data

source over another. As the Inspector observed at the end of the Inquiry this

situation is unhelpful to the decision maker….

“It is difficult to foresee a situation in which the Government …could direct or even

advise on the most appropriate data source” and

“Finding consensus on the detail behind the figures will become increasingly difficult”.

(Stock 2003 p19)

24


3.47 These problems may seem academic but the very nature of the retail capacity

calculation means that differences in assumptions have profound effects on the

results of the assessment and the conclusion as to whether there is, or is not, a

quantitative capacity for a proposed development. Hargest (2003) illustrates the

effects of altering different assumptions for a simplified retail capacity calculation.

The example given shows a situation in which a set of assumptions relating to the

principal variables that require to be addressed in a retail capacity calculation

produces a notional gross floorspace capacity of 2525 sq m GFA. The principal

variables considered are: available expenditure; level of leakage; average turnover

rate for existing and proposed floorspace; committed retail floorspace; and

assumptions about net to gross floorspace ratios. The example then alters each one

of the assumptions by only 10% and shows that the resultant “capacity” figure ranges

between 230 sq m GFA capacity through to 5051 sq m GFA. The most sensitive

factor being the assumptions about available expenditure (which is the factor

highlighted by Stock as the subject of argument in Stoke on Trent). Hargest also

raised all of the assumptions by 10% and this resulted in the retail capacity for new

floorspace being reduced to -230 sq m GFA.

Role for Retail Capacity Techniques

3.48 It is evident from the preceding review that, outwith Scotland and especially in

England, there is a policy requirement for retail capacity to be undertaken both as

part of the development plan system and for the appraisal of particular retail

development proposals.

3.49 In Scotland the position is less clear. It has been noted that in parts of Scotland

quantitative capacity is used in support of development plans. The Review of NPPG8

(SE, 2004) has noted that this can be considered to be consistent with para 84 of

NPPG8 but that “there is evidence that local authorities are interpreting the issue as

“quantitative need” for additional retail floorspace over the plan period” (SE, 2004

para 7.19). Similarly in the context of the determination of applications or appeals the

same source states “the deficiency criterion in para 45 of NPPG8 has been

interpreted as necessitating a demonstration of capacity or need, in quantitative

terms for additional; retail floorspace in a catchment area. There is also evidence in

the decisions of planning authorities that failure to demonstrate quantitative capacity

for additional floorspace is sufficient to justify refusal, even in situations where impact

on vitality or viability is not proven to be unacceptable ” (ibid 7.20).

25


3.50 The Review of NPPG8 also notes that there is confusion surrounding the concept of

deficiency and its relationship with impact and therefore further clarification on this

would be welcomed.

3.51 The only other comment in the literature on the role of retail capacity in Scotland that

we are aware of are the concluding comments of Hargest (2003). In the light of the

difficulties identified above the approach is “fraught with difficulties” but:

“This does not mean that it is worthless and has no role in planning. However its

limitations should be recognised….it needs to be subject to sensitivity testing to

indicate the potential range in capacity that could be planned for. If …this shows

enormous variation then caution should be exercised in developing policies, or

justifying proposals, based on these calculations. Furthermore the fundamental

difficulties with the principles underpinning the technique should be recognised. This

would suggest that whereas retail capacity may have a role it is likely to be a minor

contributor to the development of policy”. (Hargest, 2003 p7).

3.52 He further asserts that retail capacity does have a role as a useful first step but must

be combined with other information, for example Health Check indicators of centres,

market indicators and an examination of the physical attributes of centres. In this

regard it is notable that these comments seem, to some degree, mirror the approach

advocated in the Irish Retail Planning Guidelines published in 2005. In terms of the

role of RCA for planning applications his comment is that the focus of a quantitative

appraisal should be on the retail impact of the development on the vitality and viability

of centres.

Qualitative Retail Capacity Techniques

3.53 Unlike quantitative RCA there is less accordance over the method for assessing how

to identify qualitative deficiencies. England (1999) states the following:

Qualitative need is usually defined as a sectoral or geographical gap in the

distribution of facilities. Less commonly, planners are concerned with a deficiency in

the quality of provision”.

3.54 In PPS6 the following factors are identified that should be considered in assessing a

qualitative need:

26


• An appropriate distribution of locations is achieved subject to the key objective

of promoting the vitality and viability of town centres and improving accessibility

for the whole community;

• Provision is made for a range of sites for shopping which allow genuine choice

to meet the needs of the whole community, particularly those living in deprived

areas.

3.55 The above references focus primarily of the geographical spread of shopping

facilities. However regard is frequently had, within applications and appeals within

Scotland to the type or format of shopping provision within geographical areas. This

reflects an assumption that, within retailing, there are clear sectors whether or not

these are recognised in land use planning terms. For example reflecting Competition

Commission investigations one can recognise at least four broad sectors for grocery

retailers including large mainstream superstores (e.g. Asda, Tesco etc) which are

primarily aimed at serving weekly shopping trips; smaller general

grocers/convenience stores aimed at local top-up shopping (includes a range of

independents, the Co-op, Somerfield plus the major operators); upmarket grocery

retailers (e.g. M&S, Waitrose); and Limited Assortment Discounters[LADs] (e.g. Lidl

and Aldi). As far as the Competition Commission is concerned these can serve

different retail markets and there is limited overlapping between these (Competition

Commission 2007a paras 12 and 93). Clearly there is a wider range of type of retail

unit within the general comparison and bulky goods sectors. The most extreme case

of this proposal that has been proposed in Scotland to our knowledge is that put

forward on behalf of Aldi at a recent inquiry in Fraserburgh where it was suggested

that, since Aldi have a unique offer (notwithstanding the proposal was on a site

opposite a Lidl store) then the proposal would address a qualitative deficiency. The

logical extension of this argument is that any town without an Aldi (whether or not it

had one or many LADs already present) would be suffering a qualitative retail

deficiency!

3.56 In 1997 the English Historic Towns Forum gave guidance as to what it considered to

be considered in assessing qualitative need in terms of the following questions:

• Are the current facilities outdated?

• Are better facilities offered by competing centres?

27


• Is there a leakage of trade from the catchment area?

• Are the existing facilities cramped and overcrowded?

• Are there gaps in the types of stores?

• To what extent is there an unserved catchment population?

3.57 Other qualitative factors that have been proposed in support of applications have

related to the size and format of units. Quite common is the proposition that a lack of

modern retail warehouse units (whether for bulky goods or general comparison

goods) can represent a qualitative deficiency.

3.58 It is possible that this wider approach to qualitative deficiency can draw some support

from SPP8 paras 30-33. The thrust of this section is related to transport accessibility

but the discussion in relation to social justice and health improvement (para 32) and

access to fresh food as a contributor to health (para 33) raises issues on not simply

physical access to facilities but also affordability. This is a factor that has been raised

by LADs being located in deprived areas but raises important issues reflecting that

LADs are not distinguishable from other forms of retailing in land use planning terms.

3.59 The general conclusions from this review are that:

• There is limited discussion within the general literature or policy guidance as to

what constitutes a qualitative deficiency.

• Policy tends to refer to a geographical distribution of retail floorspace – in this

sense it can overlap with concepts of quantitative deficiency.

• In planning applications and appeals a wide range of situations have been used

to support notions of qualitative deficiency relating, for example, to specific retail

sectors and sub-sectors and also to the size, type and configuration of retail

units. These notions can draw some support from the comments of

organisations such as the Competition Commission.

28


4 Retail Impact Assessment Techniques Context

Why Undertake Retail Impact Assessment?

4.1 OXIRM (1992) argues that retail impact assessment should be undertaken for five

principal reasons:

• To understand the effects of change – this is a legitimate concern of the

planning system.

• To control public costs – unregulated development may give rise to undesirable

public or environmental costs.

• The efficiency argument – planning is concerned with the efficient use and

allocation of resources.

• The equity argument - the degree of accessibility affects the standard of living of

all consumers.

• The quality of life argument – the degree of accessibility affects the quality of life

of individuals and groups in the community.

4.2 Others also identify reasons for planners to intervene within the retail market. Guy

(1994) reflects the above but also includes the role of planning to actually improve

the efficiency of the operation of the retail market and the latter three points above

are summarised in terms of the planning system protecting against developments

that would harm interests of acknowledged importance.

4.3 However in this context many private sector developers and planners consider that

public sector planning is anti-retail in its nature. This is not a recent phenomenon -

Gibbs (1987) comments that “the prevailing attitude of the planning profession

towards retailing is inherently conservative. Planners, and local authorities in

general, are philosophically and financially committed to a centralised hierarchical

structure of retailing; a commitment which is further reinforced by statute”.

29


Types of Retail Impact

4.4 When one considers “retail impact” in a planning context the conventional approach

is to assume that this refers to impact on other retail businesses and centres in terms

of trade lost or diverted – i.e. a form of business or economic impact. However

impacts arising from development can be wider ranging than this. Bromley and

Thomas (1993) summarise a range of positive and negative impacts, the latter

include:

• The decline in the competitive position of many existing centres and associated

problems of environmental deterioration.

• The inability of less mobile sections of the community to make full use of new

out-of-centre facilities (and, it could be argued, suffering from the decline of

existing centres that they are able to gain access to).

• Problems of traffic congestion.

4.5 Positive impacts include:

• Provision of a wider range of shopping facilities.

• Increased competition resulting in cheaper products and, in those centres

adversely affected by new developments, reinvestment and refurbishment

resulting in revitalisation of centres.

• Reduced traffic congestion from town centres.

4.6 In general England (1999) concludes that there are three types of impact that can be

identified – economic, social and environmental:

• Economic – changes in retail turnover or trading patterns in shopping centres –

this would include employment impacts.

• Social – demographic and behavioural change and the implications for shopper

profiles for existing and new centres and the role of social inclusion/exclusion.

• Environmental – effects on the environment especially as a result of transport

requirements (but, it could be argued, also relating to the whole distribution

30


system serving different retail structures) but also from other sustainability

issues such as the re-use of urban land etc.

4.7 As will be seen the bulk of attention in RIA is concerned with economic impacts. In

terms of the other types of impacts the following has been noted.

Social Impacts

4.8 BDP/OXIRM (1992) notes that social impacts are reflected in the changes in diversity

and variety of shopping opportunities in town centres with issues such as the closure

of the local/small shop, the role of non-retail functions in town centres (including

changes in viability as a result of reduced retail activity in centres) and other social

issues including the role and changes to crime and vandalism. In 1988 the RTPI

Retail Planning Working Party noted that new (out of centre) retail development

tended to benefit the more mobile and affluent shopper and that other groups could

be disadvantaged. Groups that could be disadvantaged include: low income earners;

those in areas poorly served by public transport; those without access to the car;

those with caring responsibilities; the disabled; ethnic minorities etc.

Environmental Impacts

4.9 There have been a range of criticisms of major out-of-centre retail development from

an environmental perspective. These include the increased travel time and cost

gaining access to the developments; the impacts of the stores themselves and large

car parks; and the associated environmental costs with energy consumption, air

pollution, noise and congestion arising from the predominant mode of transport used

which is the private car.

4.10 Environmental impacts are not necessarily as clear as some critics would claim. A

frequent argument for supermarkets in small towns in Scotland is that the

development would reduce leakage of expenditure and, associated with this, there

would be a reduction in car mileage and emissions. Furthermore the support for

large stores that, for example, facilitate weekly shopping trips rather than more

frequent trips could, in theory at least, result in reduced travel demand. We are not

aware of definitive research to support or reject this view.

Economic Impacts

4.11 England (1999) argues that an economic focus for RIAs is important because of both

the economic benefits arising from new development and because of the possible

31


adverse consequences for other existing centres. In 1988 the Distributive Trades

EDC Report consideration was given to the steps where a major development does

adversely affect the vitality and viability of existing centres based on the following

sequence:

• The proposed development will have an impact on some businesses.

• This impact damages businesses.

• Damage will cause lasting harm. Although it could be argued that this is not

inevitable in that this will depend upon the scale of impact and the ability and

willingness of businesses to provide a competitive response.

• Harm will be of sufficient scale to cause extensive closure of shops. Again the

scale of closure will be dependent on scale of impact and the viability of

businesses impacted upon.

• Closure of shops will (may) not lead to redevelopment.

• The absence of major redevelopment will lead to a loss of vitality and viability of

a town centre as a whole.

4.12 There is no inevitability with the above steps but they do indicate a potential route by

which centres can be adversely affected. Other factors will be relevant and these are

considered in detail below.

The remainder of this section focuses on economic impacts but the client

group should consider the extent to which (if at all) the study should consider

methods for assessing environmental and social impacts of retail

developments.

RIA as an Aid to Decision Making

4.13 As England (1999) points out RIA is essentially an aid to decision-making. The

approaches that have developed to RIA have become less theoretical and more

pragmatic in response to the requirements of the planning system in Britain. He

notes that “for the purposes of advising decision-makers on development proposals,

the planning process expects decisions to be soundly based and justified” in

addition he comments “More importantly, if retail impact is to be used as a reason for

32


refusal of an application, the basis for refusal must be able to stand up to close

scrutiny at an inquiry” (England 1999 p 15).

4.14 This reflects an issue that has been raised for a considerable time relating to the

reliability of the RIAs that have been undertaken for a proposed development. Noel

(1990), in appraising RIAs for a retail development in London, commented that RIAs

are only useful (i) when they accurately predict likely impacts and (ii) when they

provide an effective input into the decision-making process. In the case study that he

examined he concluded that it “showed that the quantitative assessments were of

limited use to the Inspectors in forming an opinion as to the future of the

redevelopment proposals. Expert judgement and actual experience were of more

value” and that “this reinforces the assertion that common sense judgements are

often more useful than even the most complex and technically precise impact

models” (Noel, 1990 p54 and p53).

Retail Impacts on Centres

4.15 Prior to considering the RIA techniques in more detail it is useful to establish, very

briefly, what evidence there is for adverse impacts arising from retail development on

existing town centres and other retail provision. Not surprisingly there are divergent

views on the scale and significance of impacts that have actually occurred. In 1994

Simmie and Sutcliffe referred to the surveys undertaken in the URBED report (DETR,

1994) in which 80% of surveyed authorities considered that their town centres were

vibrant, improving or basically stable. In addition the survey asked planning

authorities to rank the effects of different kinds of competition and, at that time,

competition from out-of-town retail was identified to be an issue in (only) 35% of

authorities – this was the fourth ranked source of competition. Notwithstanding these

findings it is evident that, over the past 15 years there has been a significant increase

in out of centre retailing and this is likely to have increased competition on centres.

Studies undertaken in 1998 (DETR, 1998) for England and most recently by Roger

Tym & Partners (FSBS, 2006) concluded that there is significant impact on town

centres from out of centre retail).

Superstores and Supermarkets

4.16 Most attention has been directed to the impact of supermarkets and superstores. In

1993 Breheny and Thomas concluded that, despite initial fears about adverse

impacts arising, the evidence available suggested that their effects were felt most by

the smaller district centres in their immediate vicinity rather than town centres. Prior

33


to this Schiller (1981) considered that the impact of superstores in the 1970s turned

out to be much less severe than was first feared stating “the evidence is clear and

consistent that the impact of freestanding superstores is diffused over a wide area”.

However this could, in part, be explained by the limited numbers of these stores in

the country at that time resulting in wider market areas than would be found at the

present time. Furthermore Schiller also concedes that it is very difficult to distinguish

the effects of superstores from other factors causing changes in spending patterns.

4.17 There does, however, seem to be a general accordance of view that impacts are

most noticeable in small market towns and district centres. The House of Commons

Select Committee on the Environment report “Shopping Centres and their Future”

(1994) identified a concern that pressure for superstores in small towns could

undermine the vitality and viability of these centres because it could reduce linked

shopping trips for food and non-food goods.

4.18 In 1998 the study “Impact of large foodstores on market towns and district centres”

(S0, 1998) concluded that, from a series of detailed case studies, “the level and

consequences of impact will vary depending on the particular local circumstances of

the centres concerned. Smaller centres which are dependent to a large extent on

convenience retailing to underpin their function are most vulnerable to the effects of

larger foodstores in edge-of-centre and out-of-centre locations”.

4.19 The Federation of Small Businesses (Scotland) study “The Effect of Supermarkets on

Existing Retailers” (FSBS 2006) assessed the impact of three Tesco stores on the

town centres of Alloa, Dumfries and Dingwall. This also concluded that impacts on

these towns (which would all fit within the category of market towns/smaller town

centres) were significant as a result of out-of-centre retail developments.

4.20 It would appear, therefore, that there is clear evidence that adverse impacts will

result. But, from the discussion above and for the purposes of the current study, it is

more important to establish whether retail impact assessment techniques correctly

forecast the scale of adverse impact arising from a development and whether this

was taken into account in the decision-making process which led to the grant of

planning permission for the developments. Given the recent date of the

developments assessed in the FSBS report it would be very helpful if this study was

extended to compare the findings of the studies with the conclusions of the RIAs

undertaken for each of the three proposals and to consider whether there were other

34


factors that should also be taken into account in identifying the impacts on the three

centres.

Other Forms of Retailing

4.21 England (1999) reports that there is little evidence of retail parks having an adverse

trading impact on established shopping centres. For example Bromley and Thomas

(1993) consider that “retail warehouses have particular appeal for car borne shoppers

drawn from a wide trade area. Thus their impact is diffuse …(however) the scale of

decentralisation of the variety of new retail forms associated with retail warehousing

suggests the existence of a more potent force for change than was originally

anticipated. Retail warehouses are clearly capable of diverting a significant

proportion of trade from existing centres for an increasingly specialised range of

products”.

4.22 Dudley is a widely cited example of a significant town centre that suffered as a result

of major out-of-centre comparison goods retail development. In the 1980s there was

evidence of it suffering as a result of the development of the Merry Hill development

which was located about 2 miles away. However we have not seen any evidence of

whether this impact was long term or a short – medium term effect. Similarly

research into the effects of the Metro Centre in Tyneside identified adverse impacts

on local and district centres (notably Gateshead) rather than on Newcastle City

Centre. This in itself is curious and questionable because Gateshead centre is

physically closer to the City Centre (itself one of the strongest centres in the UK) and

had a comparatively limited retail offer at the time the Metro Centre opened whereas

the Metro Centre primarily attracted national multiple general comparison retailers of

the type found within the City Centre rather than in Gateshead.

4.23 A major difficulty for studies assessing the actual impact of retail developments

(whether food or non-food) is their ability to take into account other factors that would

have an impact on the trading conditions within centres. For example decline in small

market towns could, in part, be a reflection of the trends towards concentration into

larger centres noted in Chapter 2 of this report. Conversely apparent lack of impact

from comparison goods developments could be masked by the rapid growth in

available expenditure (and total turnover) for these goods that has taken place over

the past few decades and especially over the past 15 years.

35


National Retail Policy Requirements

4.24 The previous section has identified that, for a number of commentators, it is

considered that there are good reasons for the planning system to examine the

impact of retail developments on existing retail provision. Furthermore there is some

evidence that retail developments can have an adverse impact on such centres.

From this it is not surprising that there are requirements in the national planning

policy of each of the UK nations and in Ireland for retail impact assessment to be

undertaken and that the need to assess the impact of retail proposals is one of the

longest-established retail policy tests with its roots traceable back to the 1970s

Government Circulars (ODPM, 2004).

4.25 In Scotland SPP8 requirements are as follows:

• Para 39 identifies the requirement that, where a proposal is not consistent with

the development plan, the assessment of the proposal should satisfy that “there

is no unacceptable individual or cumulative impact on the vitality and viability of

the network of centres identified in the development plan”.

• Para 40 identifies that, an impact analysis should be undertaken in support of

retail proposals greater than 2500 sq m GFA outwith a defined town centre and

which are not in accordance with the development plan. This emphasises that

the approach should be broad-based and “it should not be necessary to attempt

detailed calculations or forecasts of a sector’s growth as small variations in

assumptions can lead to a wide range of forecasts”.

4.26 In England PPS6 requirements are:

• Para 3.21 LPAs are advised to consider impacts on the vitality and viability of

existing centres and cumulative impacts.

• Para 3.22 identifies a series of factors that LPAs should have regard to when

considering the significance of impacts including the impact on the spatial

planning strategy for the area, on public or private sector investment, impact on

vitality and viability, vacancies and so on.

4.27 In Wales Planning Policy Wales identifies that, in determining planning applications,

LPAs should consider the impact (of the development) on existing centres (10.3.1).

Furthermore TAN4 requires that, for all retail applications over 2500 sq m GFA the

36


impact assessment should provide evidence of economic and other impacts on other

retail locations (including town centres, local centres and villages) including

cumulative impacts. Such assessments may also be required for smaller

developments. This advises that a broad approach should be adopted, data should

be agreed where possible and areas of dispute should be identified.

4.28 In Northern Ireland the draft PPS5 identifies that the impact assessment for a

proposed development will need to demonstrate details of the effects on the function

and character of existing centres (para 70) however this needs to be placed within

the context of a series of policies that clearly limit that scale of retail development

within the regional, town and district centres with an effective presumption against

development beyond these limits.

4.29 In Ireland the RPG requires that applicants of proposals which local authorities

consider to be large scale in relation to existing town centres need to demonstrate

that there will not be a materially adverse impact on the vitality or viability of any

existing town centre (para 65). A list of factors that need to be considered in

assessing the significance of impact is identified which is similar to that identified in

PPS6 for England. Annex 4 to the RPG identifies a series of six steps for undertaking

a retail impact assessment. These steps are addressed in a later part of this Section.

Requirement for Good Practice Advice

4.30 None of the constituent nations of the UK has formal advice on the preparation of

RIAs. There have, however, been a wide range of studies and organisations that

have indicated that such advice would be useful. The review of NPPG8 (SE, 2004)

identified that such advice would be beneficial and was supported by both the public

and private sectors and this has been identified in the research brief for the current

study. In this report it is also suggested that, in fact, research was ongoing on behalf

of the ODPM for a Good Practice Guide – however it does not appear that this work

has progressed through to publication (although enquiries have been made of the

authors of the 2004 report to confirm whether or not this is the case – confirmation of

the position is still awaited).

4.31 The desire for good/best practice advice for the preparation of RIAs is longstanding:

• In 1994 the House of Commons Select Committee on the Environment called for

clearer and more detailed retail planning guidance for planning inspectors and

37


planning authorities, especially on the anticipated impacts of proposed retail

developments. They recommended that such guidance be brought together in a

“handbook”. However this specific recommendation was not adopted by the

Government.

• The Review of the Impact of Large Foodstores (ODPM, 1998) states “our

research suggests that a combination of the absence of a consistent and

workable methodology to assess impact and dearth of available base data has

lead to significant failings in proper planning control in the past” (ODPM, 1998,

Ex Sum para 14). They also stated “there is a pressing need for a common

basis for assessment. We consider that this would assist greatly in enabling

local authorities and the private sector to work together more effectively, and

reduce unnecessary time and cost at public inquiries spent deliberating issues

which could and should be dealt with at an earlier stage” (ibid p93).

• In 1998 the ODPM study also noted support for a good practice guide amongst

retailers to ensure consistency and comparability of impact assessments.

• The recent Roger Tym & Partners report for the FSB(S) (FSB, 2006) also

argued for the preparation of robust and comprehensive impact assessments

which covered transport and environmental impacts as well as wider impacts on

the local and national economy.

4.32 Despite the above calling for good practice it is also clear that a number of

commentators (including Norris 1992, Drysdale 1992 and England 1999) have

identified that, in essence, retail impact assessment follows a generally accepted

method albeit with some variations in the order of steps taken and the omission of

certain steps for more straightforward development proposals. As a result Norris

(1992) saw that practice could be improved through a better retail information base,

better training for the Planning Inspectorate and use of a more pragmatic approach

for RIAs and an improvement in qualitative analysis. Others have also called for

improved retail information to underpin RIAs (for example England 2001). Drivers

Jonas (SE, 1992) overall view was that, given that most practitioners adopt a similar

approach to RIA, they did not consider that “methodological prescription was

necessary” (SO, 1992 para 6.38).

38


Basic Requirements for RIA Techniques

4.33 For RIA to be effective as an input into the decision-making process it is evident that

the techniques used should satisfy a number of key requirements. These were

identified by Drivers Jonas in 1992 as follows:

• Accurate – given the general sensitivity of the results to assumptions made

measures should be incorporated to increase the accuracy of data inputs

including, for example, the role of surveys and other data inputs.

• Thorough – Drivers Jonas emphasise the importance of a wide study area for

the analysis. The FSBS report emphasises that the impact assessment should

be robust and comprehensive (FSBS, 2006 para 6.10).

• Consistent – both in overall methodological approach and in the identification of

assumptions.

• Limited sensitivity – Drivers Jonas consider that thoroughness will reduce the

sensitivity of results, it is considered that this will not always be the case but

sensitivity of results should be tested as part of the RIA process.

• Capable of Agreement – parties are encouraged to seek agreement of data as

much as possible and planning authorities are encouraged to make data

available to applicants/consultants.

4.34 Although government policy advice in Scotland and elsewhere encourages a broad-

based assessment England (2001) argues that this should not mean that it is a

superficial approach. He considers that RIA must be systematic and soundly based

so that it provides the evidence on which to make sound planning decisions.

Historical Development of RIA Techniques

4.35 It has already been noted that some consider that there is a general accordance in

the methods that are used for RIA and that this has been the situation for the best

part of 20 years. Before considering in detail the techniques used it is helpful to

provide an historical context to indicate how RIA has developed since the 1960s.

39


1960s

4.36 England (1990) describes the 1960s as a period characterised by the development of

large theoretical retail models with the initial development occurring in the USA. A

common approach was the use of “gravity” models which were developed on a zonal

basis for a study area identifying the origin of expenditure (residents) and the

destination of expenditure (retail locations) where the amount of expenditure flow was

a function of the size of centres/expenditure and an inverse of the distance between

the centres (i.e. gravity weighting).

4.37 England (1999) reports of five approaches being adopted for these models: the

aggregation of individual behaviour; the use of central place theory; retail gravity

models; intervening opportunities models; and maximum entropy models.

4.38 Norris and Jones (1993) comment that these models relied on “computer simulation

of human shopping – a feature not noted for its predictability. This was further

undermined by the poor information base on which they were founded”. Others

criticised the approach, for example Senior (1979) contended that they lacked “an

independent socio-geographical justification”. Robertson (1993) criticised the models

because they assumed “instantaneous equilibrium” within the models whereas it can

take a significant period of time (i.e. years) for patterns to settle after new

developments.

4.39 England (1999 p67) summarises the problems of the models (and gravity models in

particular) were associated with the following:

• The lack of theoretical base and the attempts of the models to generalise about

individual behaviour from aggregate empirical data;

• The models were essentially equilibrium models that could only allocate given

certain static conditions but that shopping behaviour is not static;

• The range of choice of input variables for the attraction and deterrence functions

used in the models;

• The dependence of the models functioning on area units used for zones;

• Difficulties in the calibration of models; and

40


• Difficulties associated with forecasts about the future sizes of centres,

population, expenditure and other variables.

4.40 In the mid-1960s the Distributive Trade EDC (established by the Labour Government)

set up a shopping capacity sub-committee in 1966 which produced a report on

models in 1970 “Urban models for shopping studies”. This did not advocate any

particular model but suggested a step-by-step approach with the use of the models to

generate and test alternative scenarios.

4.41 According to BDP/OXIRM (1992) there were two lasting legacies from the 1960s use

of models. First the over-reliance on the models resulted in a backlash against them

and the rejections of proposed out-of-centre development helped to engender a

“climate of opposition” amongst planners to all types of outlying development and an

assumption that the debate about major out-of-town development had been

concluded.

4.42 In the late 1960s there was therefore widespread opposition to increasing

quantification in planning and the use of mathematical models. Guy (1991)

summarised the position as follows:

“Impact assessments relating to new retail developments became a major

concern in British town planning at around the end of the 1960s but, as one

inquiry followed another, it became clear that apparently abstruse

disagreements on matters such as zone size, choice of travel cost measure

and methods of calibration could lead to radically different conclusions about

the extent of trading impact of new developments. Public inquiry Inspectors

and participants became increasingly tired of such discussions. Eventually

the Department of the Environment advised implicitly against the use of

mathematical models in impact studies. (Guy 1991 p191).

1970s

4.43 Interest in models continued into the 1970s and beyond. For example the Planning

Research Applications Group and the Unit for Retail Planning Information both

developed shopping models. More generally there was interest in the role of before

and after studies particularly as the first large superstores and hypermarkets were

being developed at this time. BDP/OXIRM (1992) considers that the 1970s were

characterised by as a decade of debate about the impact and consequences of out-

of-centre retailing.

41


4.44 The 1970s were also characterised by a series of post hoc studies based on surveys

of the trading characteristics of superstores and hypermarkets. As would be

expected they were case specific. In terms of their usefulness for forecasting impacts

of new developments this was limited.

1980s/1990s

4.45 During the 1980s England (1999) considers that free market ideology briefly

influenced retail planning in the context of government policy adopting a more

relaxed approach to out-of-centre development. However from the mid 1980s

onwards there was a move towards a more pragmatic approach to evaluating retail

impact with the result that, in 1992 Drivers Jonas was able to conclude that “there

appears to be a broad measure of consensus that retail impact studies should

include percentage impact calculations but should deal in qualitative as well as

quantitative terms” and that “there is remarkably little dispute as to the stages to be

undertaken in calculating percentage impact”.

4.46 From an examination of the full range of documents published on retail impact

assessments since the early 1990s it would appear that there is little change in

essence in relation to the steps undertaken to actually calculate retail impact. The

principal developments have focused on the measurement of impact (a move away

from reliance on percentage impact alone but the use of other indicators – such as

residual turnover sales densities) and significantly greater attention paid to

interpreting the significance of impact. The latter includes the identification of factors

that should be considered by planning authorities (e.g. PPS6 para 3.22) and

interpreting the significance of impacts in terms of the vitality and viability of centres

through the use of town centre Health Checks.

4.47 As a footnote to this period the URPI “Markets” model should be noted. This was a

computer shopping model based on gravity theory. This model is closer in concept to

the models used in the 1960s and possessed many of the earlier models’ difficulties

including the length of time required for the calibration of the model and that it was

not sophisticated enough to deal with different types of shopping trip. It was,

however, used in Scotland for example Central Region used the model to seek to

predict changes in main food shopping trips and Strathclyde Region used it for

assessing major out-of-centre shopping proposals.

42


Overseas Practice

4.48 France was one of the first European countries to adopt specific legislation for retail

planning. Since 1973 the development of retailing in France has been subject to the

‘Royer Law’, which stipulates a system of permits for retailing that are separate from

those required to govern town planning. As a result of major social and economic

changes in the country which included the development of large-scale retailing during

the 1980s it was considered necessary during the 1990’s to reform Royer Law. The

government brought in a moratorium on the implementation of major new retail

schemes. From 1993, applicants need to attach to their file an in-depth study

enabling the ‘departmental commission’, responsible for the implementation of

commercial activities, to evaluate the economic and social impact of the project put

forward on existing businesses. In parallel with the temporary freezing of the permits

to open large retailing units, attempts were made to design new dispositions, which

could be used to encourage a better allocation of territorial resources and in

particular to give new life to city centres.

4.49 Under the German planning regulations proposals for major retail development must

satisfy a range of criteria including the effects on convenience shopping for the local

population.

4.50 In the USA some states have attempted to control the development of large retail

developments through legislative planning powers. Norris (1992) commented that

there is no consistent methodological framework used in the US. There are few

examples of impact studies undertaken in the US which are readily available but it

would appear that those addressing economic factors were still using gravity-based

models during the 1990s. Norris (1992) concluded that there were no alternatives to

current practice which can easily be imported into Britain.

4.51 Practice in Ireland tends to follow closely the approaches adopted in the UK.

Conventional Retail Impact Assessment Method

4.52 It has been noted that, even in 1992, Drivers Jonas observed that there was a

general accordance regarding the stages required to quantify the impact arising from

a retail development. They identified the common elements of the approach to be as

follows:

• Identification of the catchment or study area;

43


• Estimate of expenditure within the catchment area;

• Estimate the turnover of existing shopping centres;

• Estimate the turnover of the proposed development;

• Estimate the amount of spending in each existing centre that is diverted to make

the new store’s turnover and the location source of that spending; and

• Express the amount of trade diverted from each shopping centre as a

percentage of the estimated pre-impact turnover of that centre. (SO, 1992

pp59-60).

4.53 The above identification was made despite the impression given by the authors of

articles on the subject that there were in fact a great many different approaches. The

running order of tasks could vary but, in essence, most retail impact assessments

undertook the same stages. Subject to greater attention being given to the

interpretation of the significance of impact (which includes the use of additional

measures of impact –such as the use of residual sales densities) and more attention

to the linking of economic impact with quantitative capacity and other considerations

such as environmental and transport impacts, it is considered that this view is as valid

today as it was 15 years ago.

4.54 To provide an overview of the basic characteristics of RIA techniques a summary will

be provided of a range of RIA techniques used over the past 15 years which have

been the subject of debate within the literature. These are:

• The generic “step-by-step” method identified by Breheny et al (1981) and

England (1999);

• Drivers Jonas recommended method (1992);

• Norris’s “refined quantitative approach” (1992);

• Norris and Jones proposals for a more qualitative type of appraisal (1993);

• Hillier Parker’s “CREATE” (1998);

• England’s recommended “best practice” approach in 1999; and

44


• CB Richard Ellis /GVA Grimley recommended approach in their Review of

NPPG8 2004.

Generic “Step-by-Step” Method

4.55 In 1981 Breheny et al identifies the following:

Essentially the procedure was based around a set of steps assembled from the

guidelines in DCPN132, and the approaches adopted by local authorities, plus a

certain amount of innovation. The steps were:

(1) determine future levels of available expenditure per capita

(2) apply estimates of expenditure to forecast population in each isochrone,

this gives total available expenditure

(3) determine the likely turnover of the store

(4) determine proportion of turnover coming from customers living in set

isochrones to the store

(5) for each isochrone, to take the share of turnover coming from that

isochrone as a percentage of total available expenditure in that isochrone

(6) determine where the expenditure “captured” by the new store would be

spent alternatively; this gives assessment of the impact on existing or

planned centres.

(Breheny et al 1981 p464)

4.56 Compared to other approaches the principal omissions from the above are (i)

identification of catchment or study area (ii) limited consideration of the turnover of

existing centres and (iii) limited consideration of measurement and significance of

impact. The approach gives particular attention to the sources of trade draw to a

proposed development.

Drivers Jonas Recommended Approach 1992

4.57 This is the “prescribed” approach set out in the 1992 research undertaken for the

Scottish Office. The authors recommended the common methodology which has

45


already been identified above with a number of specific comments and

recommendations in relation to individual stages:

• The catchment area should cover the area from which the bulk of trade to the

proposed development would be drawn;

• Care is required for considering the “test” year, price base and expenditure

growth trends;

• The use of surveys for deriving the turnover of centres;

• Trade draw using sub-divisions of the catchment area;

• Careful justification of trade diversion assumptions;

• There is a role for computer models (such as gravity weighting).

4.58 Drivers Jonas also set out guidance on the interpretation of impacts setting out a

range of questions regarding the conditions of centres affected and potential effects

of the development on existing shops within the centre. (SO, 1992 p126-7).

Norris 1992

4.59 In 1992 Norris considered that the step-by-step manual approach was the most

appropriate framework for improving on existing impact methodologies. But he

promoted a “refined quantitative approach” with the following modifications to the

generic steps identified above:

• In considering the expenditure growth forecasts a range of assumptions should

be tested.

• For identifying retail development commitments there should be a need for

“greater agreement” at pre-inquiry meetings.

• For assumptions regarding floorspace “efficiency” growth (i.e. changes in the

sales density per unit area in future years) a range should be used as sensitivity

tests.

2 Dept of Environment – Development Control Policy Note 13 December 1977

46


• In relation to the use of a “needs” assessment particular weight should be given

to a qualitative assessment.

• In assessing trade diversion greater use should be made of surveys in what is

described as a “interactive” method.

4.60 He also proposed a “triangulation method” for the determination of centre and store

turnover and trade draw. This was to test the sensitivity of turnover and trade draw

estimates through a combination of company average turnover rates, estimate of

market share that could be achieved by the development and further consideration of

the particular socio-economic characteristics of the catchment area.

4.61 Most of the above “refinements” appear, from today’s perspective, as common sense

and appear to have been to greater or lesser extent by other practitioners – for

example comparable advice can be found in the Driver Jonas study of the same year.

Norris and Jones 1993

4.62 The following year Norris and Jones (Norris & Jones, 1993) proposed a more

qualitative type of appraisal for assessing retail impact. This appeared to be in

response to the failure of quantitative methods to provide clear and agreed

indications of the scale of impact arising. For example they quoted a Reporter to the

Joint National Centre and Highpoint Mall Inquiry in Scotland stating that none of the

five retail impact assessment methods provided a firm basis for decisions as they

were “merely informed guesses about the outcome of proposed developments”

(Norris and Jones p84). They considered that “impact assessment can never be a

scientific activity, as there is no watertight method or comprehensively retail planning

data to support such a claim” (Norris and Jones, 1993, p84). This appears to

demonstrate some uncertainty as to the role of quantitative assessment techniques.

In response they proposed three broad steps:

• A preliminary qualitative analysis of vitality and viability using an index of

“vitality” – a judgement that could be made at the outset as to the vulnerability of

selected centres to new retail competition. (It should be noted that this was the

year following the publication of the URBED report for the DOE on the Vitality

and Viability of Town Centres).

47


• A broad quantitative evaluation of the supply and demand for retailing within the

catchment area (effectively a form of capacity calculation) but which stopped

short of the calculation of trade diversion to the proposed development.

• A more detailed quantitative analysis which sought to consider whether the new

development would seriously damage the vitality and viability of nearby centres

(although no details are given of how this important stage was to be

undertaken). This would, in theory, then feedback into the design of the

development proposal.

4.63 Following this feedback the amended scheme could be reassessed against steps 2

and 3.

4.64 For the purposes of this review the major difficulty is that there do not appear to be

any details of the proposed approach published in the literature. In response to the

proposed method Robertson (1993) considered that it was simply a “verbal

restatement of the gravity model and therefore does not represent an advance in

methods” (Robertson 1994 p121). He considered that if an assessment is to mean

anything then quantification is required and “trade diversion and the potential effect

on property values must be expressed in percentage or absolute monetary terms if

they are to serve any purpose to those on the receiving end of the impact –

qualitative evaluation will generate qualitative conclusions…quantitative methods do

at least retain the advantage of providing explicit statements which can be explicitly

challenged. Critical examination of and sensitivity testing of the input variables is the

most progressive way to judge whether the forecast range for the impact is large or

small” (ibid p121).

“CREATE”

4.65 In their review of the impact of large foodstores for the DETR in 1998 Hillier Parker

argued that there was a clear need for a common approach to assessing impact –

this was despite the view of others at the time and before that a common approach

did in fact exist. They proposed a Combined Retail Economic And Transport

Evaluation (“CREATE”). They considered that “this is not a model but a logical series

of steps which are designed to address all relevant criteria using a comprehensive

and consistent range of data” (DETR 1998 para 56). They considered that the

advantages of this approach were to provide a simple step-by-step approach,

integration of retail and transport assessment requirements of government policy. It

48


was survey based, it provided a consistent framework for predicting the impact of

edge of centre and out of centre foodstores, and it utilised sensitivity tests to highlight

the effects of judgements about the impact of the proposed store.

4.66 They proposed to divide the conventional step-by-step approach into two elements:

• The measured variables, which should be capable of quantification based on

survey and other data to produce a model of the current situation (which should

be agreed).

• The assessment of predicted changes against relevant criteria (which may not

be agreed but capable of sensitivity testing).

4.67 The authors considered that the CREATE approach would provide a comprehensive

checklist of criteria necessary to assess the impact of large foodstores. But the

research did not provide detailed guidance on the practical application of the

approach.

4.68 The steps are summarised in the following diagram.

Impacts studied in a CREATE assessment

Define catchment/survey area Assess spend in base/design years Model shopping and travel patterns

(frequency/mode)

Predict changes following

development of new store

MEASURED VARIABLES

Retail Economic Impacts

• Catchment area profiles • Quantitative Impact • Employment Impact

Transportation Impacts • Modal Split/Public Transport • Car ownership/ availability • Car parking • Linked trips/store locations • Travel distance

PREDICTED CHANGES

49


England 1999

4.69 The following figure summarises the key steps and inputs into the method

recommended as best practice by England in 1999.

England (1999): Methodology for Quantitative Assessment of Retail Impact

Isochrones Define catchment area and sub-areas Shoppers' survey data

Base year population and per capita expenditure

Base year matrix of expenditure flows

Household survey data

Inflows of expenditure Turnover/floorspace ratios

Existing floorspaceDesign year matrix of

expenditure flows by sub area

Projections of turnover in design year

Population and per capita expenditure projectsions for

design year

Impact matrix including estimated turnover of

proposed development

Floorspace of proposed new development

Trade diversion to proposed development

Trade draw by sub-area (and inflow)

Trade diversion to proposed development

Residual turnover of centres

Qualitative appraisal of centres Interpretation of impact

4.70 In general terms he recommends that a broad approach is preferred as is agreement

between parties on data and assumptions, particularly where RIAs are being

prepared as evidence for an inquiry. He considers that “excessive detail should be

avoided” (England 1999 p198). He considers that the above approach “concentrates

on economic impact which remains the fundamental consideration in PPG6 for

assessing the effect of a new retail development on the vitality and viability of

shopping centres. However qualitative impacts also need to be considered as

required by PPG6” (ibid p97).

4.71 England considers that, in relation to the general characteristics of earlier

approaches, his recommended approach represents a “marked improvement” for the

following reasons:

50


• The data inputs and assumptions are made explicit – there is no ambiguity

about these;

• Household survey data to estimate market shares is much more accurate that

other methods;

• The emphasis is on expenditure flows which are a close approximation to

reality;

• Leakage and inflows of expenditure are specifically included; and

• He suggests that “in assessing impact the framework replicates how shoppers

themselves decide where to shop and how they will change their shopping

patterns if a new store is developed”.

4.72 As will be considered later the latter claim is one of the key issues that needs to be

addressed in the accurate estimate of retail impact arising from a proposed

development. Unfortunately despite the claim England does not indicate how his

method actually addresses this. Finally, it will be noted that the final stage of the

assessment is concerned with the interpretation of impact. England is notable in that

he sets out a deterministic approach to this utilising graphs plotting percentage

impact against single index scores of vitality and viability. In this way a centre with

average vitality and viability (score of 3.0) would suffer significant adverse impact if it

loses over 25% trade to a superstore, marginal impact for losses of 15-25% and not

significant impacts for losses of trade below this. A separate graph was provided for

non-food retail developments with the same centre suffering “significant” impacts for

trade losses above about 12%, “marginal” for 7-12% and “not significant” below this.

CB Richard Ellis – Review of NPP8 – 2004

4.73 The most recent RIA method that is reviewed here is that recommended by CBRE as

identified in their review of NPPG8 in 2004 (SE, 2004). At the outset they

recommend that the quantitative capacity assessment should be linked to retail

impact assessment. They considered that RIA would be relevant for:

• Testing the retail strategy in a draft development plan (e.g. to test whether a

turnover increase in one centre might “upset” the local retail system through its

competition with other centres).

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• Establishing the case for a retail proposal (i.e. testing whether a development

would have a harmful effect on a centre).

4.74 The key inputs into RIA and basic steps of the process are set out in Appendix 4 of

the Review of NPPG8 (SE, 2004). The basic steps are identified as follows:

• Study area details – a general study area to provide an overall sphere of retail

activity “the main purpose is to focus in on patterns within that study area which

can start to indicate an actual catchment for different retail facilities”. For this

population and expenditure information is used to identify expenditure levels in

base and test years.

• Calibration of Study Area to assess catchment areas. This is to assess

expenditure flows to and from different parts of the study area and locations

outwith the study area. Use of household surveys and market share analysis is

noted to support this task.

• Model of scenario of expenditure/turnover. Effectively this is applying step 2 to

the base year expenditure data. This notes the role of “surplus” expenditure

which could, in due course, flow to the proposed development.

• General capacity assessment. CBRE consider that this stage of any capacity

assessment requires a careful look at the hierarchy and status of different

'centres' within the study/ catchment area.

• Remodel of Test year to show the effects of proposed new retail development.

This stage is described as “using the base line data from the survey modelled

catchment areas and also employing the judgement of the analyst, to build in

new levels of floor space in different locations, with estimates of the ways in

which this new floor space will gather its turnover from different sources”. These

sources can include: absorbing the levels of expenditure growth observed within

the catchment area; diverting expenditure from existing retail outlets from within

the catchment area; and (possibly) by changing the dynamics of the catchment

area to such an extent, that the new retail attraction will increase the sphere of

influence and extend the study area to bring in more expenditure from further

afield. The result of this modeled future scenario “will be an estimate of the

proposed turnover of the new shopping facility, set against the existing turnover

levels of existing facilities”.

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• Interpret actual impacts of the estimated adjusted turnover levels. This should

be a separate assessment requiring a close look at impacted centres including

their vitality and viability and the extent to which the proposed development will

“introduce retail planning advantages to the local hierarchy which have to be

weighed in balance to the overall impacts elsewhere”.

• Other useful gauges. These are other factors that can be useful in the above

including assumptions about sales densities, increases in sales densities in the

future and the role of over/undertrading, a comprehensive Health Check on the

town centre.

Conclusions

4.75 A number of general conclusions can be drawn from the above review:

• RIA techniques, over the past 40 years have essentially followed two basic

approaches – the use of complex “black-box” theoretical models that were in

vogue in the 1960s and 70s but gradually rejected due to the difficulties of

examining the assumptions built into the models and general lack of clarity.

These were followed by the development of step-by-step approaches with

generally clearer identification of assumptions.

• The dominance of step-by-step methods over the past 20 years which, although,

appearing to cover a wide range of methods, and having some variation in terms

of the order of tasks and whether all tasks should be undertaken, have a strong

commonality in terms of the tasks that require to be undertaken.

• Gradual development during the past 20 years in terms of:

i) The development of indicators for measuring the scale of impact

beyond percentage loss of turnover.

ii) Increased emphasis on the interpretation of the significance of impact

with emphasis on the role of the vitality and viability of centres

affected.

iii) Increased consideration of the role of retail capacity as an integral step

within retail impact assessment.

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• Within the general academic and professional literature there are comparatively

few references that set out the full details of how a particular RIA technique

should be undertaken – the principal references that do provide such detail are

Drivers Jonas in 1992 (SO, 1992) and England in 1999.

4.76 Reflecting the above the following section of this review focuses on initially on the

overall criticisms that have been levelled against the step-by-step type of approaches

and then specific advice proposed within the literature relating to the individual tasks

or steps, their importance and the assumptions that should be used for these tasks.

General Criticisms of RIA Ste-by-Step Methods

4.77 General criticisms of RIA techniques have been focused on a limited range of issues:

• The role of assumptions – especially where these have not been expressly

stated or justified;

• Data weaknesses; and

• Lack of independence of those undertaking RIAs leading to bias;

4.78 These will be addressed in the following paragraphs.

RIA Assumptions

4.79 These criticisms include the following:

• Norris (1992) has argued that, up to that point RIAs were subject to “a myriad of

indeterminate assumptions and considerable areas of doubt”. This is supported

by the few comprehensive before and after studies comparing forecasts with

actual impacts (e.g. Noel, 1990) who concluded, in the case of one scheme in

London “none of the quantitative impact assessments produced in this case

were accurate over all – or even a majority – of the various parameters” (Noel,

1990 Vol 2 p50). Some have argued that post-development studies should be

undertaken to check assumptions and/or accuracy of RIAs (e.g. this was raised

by some LAs in response to a survey by England – 2001).

• Drivers Jonas criticise the lack of justification for the assumptions used (SO,

1992).

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• Holt (1998) draws attention to trade diversion assumptions being significant:

“retail impact assessment has not yet reached a level of sophistication to reduce

the likelihood of widely divergent trade diversion estimates being produced by

the parties at a public inquiry, leaving many an Inspector to thread his way

through the disparate evidence to arrive at a reasonable assessment of the

impact position.” (Holt, 1998 p131).

• The sensitive nature of RIA results to changes in the assumptions used in the

methods – Norris (1992) states “even small changes in assumptions about

trends in turnover, population, expenditure and the efficiency of use of existing

floorspace can lead to a wide range of forecasts”. In terms of the actual

sensitivity of results little can be done within the RIA techniques themselves but

the use of household surveys and greater attention to the source of data

underpinning assumptions can result in improvements to reliability and the

significance of variations in results can be addressed through the use of

sensitivity testing. Comparable comments are also made by McCallum (1995).

Data

• Data weaknesses are identified by Norris (1992) compounding the uncertainties

associated with assumptions used in RIA. Drivers Jonas (SO, 1992) go as far

as suggesting that disputes about data can undermine the confidence in an RIA.

• England (1990), following his survey of local planning authorities in England,

identified that planning authorities considered that there was a need for

better/more up-to-date retail statistics at a local level and the need for surveys of

local shopping patterns and catchment areas. Comparable comments were

made by Hillier Parker et al (LTT, 1998) as part of the assessment of the impact

of large foodstores for the DETR (DETR, 1998). In terms of nationally produced

data little has changed since that time (although in Scotland we do have the

national surveys of new developments/proposals) but, at a local level, there is

greater use of surveys undertaken especially associated with the use of town

centre Health Checks.

• A number of the methods described above have referred to the need for data to

be shared and/or agreed between applicants and planning authorities and,

where authorities have collected this information this should, in part, address

some of the concerns here (e.g. England, 2001).

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• The CBRE team reviewing NPPG8 (SE, 2004) made the following

recommendations in relation to data: reinstate the Census of Distribution;

greater use of Geographic Information Systems; data from Town centre Health

Checks should be provided within a fixed timetable; there should be a central

repository for data storage; and use should be made of regional assessor data

and local surveys.

Lack of Independence of RIAs

4.80 This has been noted by a few commentators and appears to be a complaint of

planning authorities – for example in the 1990s England carried out surveys of local

planning authorities who had indicated that there should be less bias in favour of the

proposed development in RIAs and similar conclusions were made by the DETR

team (Hillier Parker et al) reviewing the assessment of the impact of large foodstores

(DETR, 1998) and Roger Tym & Partners (2006).

4.81 Noel (1990) has suggested that “there is a motive to ‘begin at the end’ – to decide

what the outcome of the impact study is going to be at the outset and to gear the

calculations towards the chosen ends” (Noel, 1990, Vol 2 p52).

4.82 Whether or not Noel’s comment is valid which, if it is, would question the

professionalism with which at least some RIAs are produced, it is important that an

RIA should have the confidence of those who rely on its conclusions in order to make

planning decisions. This is a point well made by England (1999) and he considers

that the more agreement that can be reached by parties the less will be the scope for

the manipulation of outputs. He also suggested that RIAs should be the subject of

independent audits (England, 2001). Experience in Scotland suggests that a number

of authorities do seek reviews of RIAs submitted to them (e.g. Angus, North Ayrshire,

Aberdeenshire and others).

4.83 Some (including local authorities) have suggested that retail impact assessments

should be prepared as independent studies. Drivers Jonas view in 1992 was that

there should be no change in practice if an accepted methodology is used and data

and assumptions can be agreed and the main outstanding issue will be a matter of

interpretation of the significance of impact.

Other Issues

4.84 Other criticisms that have been raised include the following:

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• It has been suggested (e.g. by England, 1999 and 2001) that approaches to RIA

have not kept pace with changes in the policy context for retail. This comment is

specifically a criticism of the focus of RIA on economic impacts with little

development of environmental and social issues. However, although England

raises this issue (England, 1999 p89) his recommended technique still focuses

on economic issues rather than other factors.

• In the early 1990s criticisms by Norris (1992) pointed out that, at that time, the

focus had still been on the development of sophisticated techniques and

statistical accuracy often at the expense of the qualitative stage of the analysis.

This underpins his and Jones approach (Norris and Jones, 1992) described

above. This was recognised by the authorities surveyed by England in the

1990s (England, 1999) who indicated that RIAs should place more emphasis on

V&V indicators. Drivers Jonas (SO, 1992) also raise this in terms of giving

insufficient attention to residual turnover and limited interpretation of impact

estimates.

• Limited attention to cumulative impact has also been a criticism raised by some

and this is, in part, addressed in some of the techniques reviewed in the

preceding section (e.g. England, 2001).

• Drivers Jonas (1992) criticise the lack of analysis of current shopping patterns in

many RIAs and the strengths and weaknesses of centres.

Key Steps/Stages in RIA

4.85 This section focuses on issues raised regarding the key steps used in the “step-by-

step” RIA methods.

Identification of Catchment Area

4.86 A range of approaches are proposed for the identification of the catchment area for

the proposed development. These include: the use of isochrones; survey-based

analysis; and consideration of other factors.

Isochrones

4.87 England (1999) recommends the use of 5 minute and 10 minute isochrones. This is

on the basis that isochrones are suggested to be supported by evidence from post

hoc studies showing typical percentages of trade drawn from different time bands for

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different sizes and types of store. The catchment area for the store can be

subdivided according to these isochrones and which can support the calculation of

development turnover and isochrones further subdivided to sub-areas to assist in

understanding shopping trip patterns and to facilitate the distribution of trade draw

and diversion. Davies suggests the use of a series of isochrones prepared at 5

minute intervals (up to 25 minutes driver time) whereas others (e.g. Donaldson

suggests 10 minute intervals would be adequate). One reason that this approach is

supported is that, it is argued (e.g. Roberts 1983), that it provides a basis for

predicting the likely influence of the proposed development by reference to

experience within driver-time bands for other areas (e.g. 75% of trade is derived from

10 minute isochrone etc).

4.88 Drivers Jonas (1992) consider that the use of experience from elsewhere needs to be

treated with caution because common factors (and, by implication, differences) need

to be recognised – these would include population density and distribution, and levels

of car ownership – when comparing one part of the country with another. To this list

factors such as existing retail provision of the type proposed should also be included

within the factors to be considered. For this reason they emphasise that care should

be taken to compare like with like.

4.89 Drivers Jonas consider that isochrones are helpful for identifying those centres most

likely to be affected by a development but less useful where a new development will

only complete with one other centre when a simple primary and secondary catchment

area may suffice.

4.90 The difference may reflect geographic differences between Scotland and England

with a higher proportion of large urban areas in the latter. In many parts of Scotland

actual journey time is less important than the comparative distance to other

competing retail centres (and in rural areas there may be larger distinct catchment

areas associated with substantial journey times) whereas in large urban areas there

will be a range of overlapping catchments and the distribution of impacts may be

more complex.

Surveys

4.91 Drivers Jonas (1992) place weight on the role of surveys to identify catchment areas

to indicate the likely extent of influence from a proposed development for example if

the development is in a town with a well recognised catchment area then it is likely

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that the development will share the same catchment or have a similar one. However

some caution should be noted – if the development represents a form of retail not

present in the town or locality then a survey will not necessarily produce useful

information and consideration may need to be given to other factors. As with

England, Drivers Jonas also suggest that it would be appropriate to sub-divide the

catchment area into sectors usually a primary and secondary catchment.

Other factors

4.92 Some consultants make use of equi-drive catchments. This may be important for the

introduction of new retail forms in a market area where current shoppers travel a

significant distance to a similar retail offer. In this way, if one is deriving the extent of

catchments for both the new and existing facilities, one can consider that the new

development would have the same level of attractiveness as the existing store, then

one could conclude that the catchment boundary between these existing and new

developments would be where the journey time/costs are equal.

4.93 In the review of NPPG8 CBRE (2004) considered that a study area (as opposed to

catchment area) should be based on areas for which data can be collected. However

they argue that the catchment area for the development is really an output of the

study and not an input. If it is the latter it tends to pre-judge the study. In essence it

is considered that, in effect, this is really supporting the use of surveys to identify the

existing catchments for centres and to use this to identify the extent of the catchment

area for a proposed development.

Design/Test Year

4.94 On the whole there is comparatively limited disagreement about the appropriate

design or test year to be used for RIAs. England (1999) suggests that this could be

as much as 5 years ahead because of the time it takes for shopping patterns to

adjust to the opening of a new store or centre. Drivers Jonas (1992) point out that it

is important not to allow too long a gap in time between the year of opening of the

development and the design year because, as a result of increasing available

expenditure over the intervening period, the impact of the scheme could be under-

estimated.

4.95 Factors that will require to be considered will include the time required for securing

planning permission and other consents and the period for development and

thereafter for time for trading patterns to settle. The minimum period adopted is

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typically 2 years after submission of the planning application for comparatively

straightforward schemes to 5 years after opening (7-8 years after application) for

complex schemes. Other factors could relate to the availability of data – for example

strategic retail studies may assist in pointing to a date for which planning authorities

have estimates for floorspace, turnover and available expenditure and these may

provide a convenient date for assessing the impact of a proposed scheme.

Role of Household and Other Surveys

4.96 It will be noted from the comments and observations already made that some

commentators have placed considerable weight on the importance of surveys

(especially household surveys) for the identification of existing trading patterns for

existing centres and for the estimate of the turnover of existing centres. This includes

England (1999), Drivers Jonas (SO, 1992) and CBRE (SE, 2004). Drivers Jonas

suggest that a range of outputs from surveys are particularly useful including the

following:

• Choice of main shopping centres;

• Travel information including mode, frequency of trips, car ownership;

• Information on expenditure by households; and

• Patterns of spend by main food and top up shopping.

4.97 Other surveys are also identified to be important including surveys of floorspace/town

centre uses (e.g. to identify vacancies), surveys of businesses and shopper/town

centre user surveys. Advice on the scope of shopper surveys has been provided in

the past by URPI but this was last provided in 1991 (URPI Information briefs 90/8 and

91/2).

Turnover of Existing Centres

4.98 The general consensus is that the turnover of existing centres is better estimated

from household surveys identifying market shares for stores/centres than by applying

typical or average turnover/floorspace ratios. This is the view of Drivers Jonas (1992)

who referred to responses from other consultancies (SO, 1992 p68), England (1999)

and can also be inferred from CBRE (SE, 2004). Average turnover ratios can be

provided from Retail Rankings or Verdict for individual multiple businesses but not for

small multiples (typically regional firms) and for independents. Observation can be

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used to examine whether the turnover of existing stores appears to be trading at

average levels or whether there is a degree of over- or under-trading and then to

adjust turnover rates accordingly.

Population and Available Expenditure Estimates

4.99 The identification of existing and future population and estimates of available

expenditure is a key element in the understanding of existing trading conditions.

Furthermore if estimates of the turnover of existing centres are derived from surveys

then accurate estimates of total available expenditure are required for the calculation

of turnover. The same is true for the forecasts of the turnover of the proposed

development if these are based on market share approaches (see below). As a

result this step is required to be undertaken in nearly all step-by-step RIA methods.

4.100 There are two components to the stage. The first relates to population estimates –

the sources of information for the estimate of base population can include local

authorities, Scottish Census Results Online (for 2001 base data) or from data

providing organisations such as MapInfo (formerly URPI) or CACI. For example

MapInfo can provide both population estimates and available expenditure estimates

for user defined catchment areas in their TargetPro reports.

4.101 Drivers Jonas (1992) summarise the essential tasks for this as follows:

• Confirm the design year;

• Obtain the population estimate for the design year;

• Obtain expenditure per head estimate for the local/catchment/study area for the

most recent available year;

• Estimate the growth in expenditure per head to the design year; and

• Apply design year population to design year expenditure per capita to calculate

total available expenditure for the design year (this should, of course, be

expressed in constant prices to assist in calculation of impact and

interpretation).

4.102 It has been noted, however, that there appears to be some variation in the estimates

of available expenditure per capita between different data providing organisations.

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Although this is not quite as critical for RIA as it is for RCA, variations in the

information will, nonetheless, have a significant effect on RIA calculations (see

Drivers Jonas, 1992 p66 and Stock, 2003 p19).

Treatment of Special Forms of Trading

4.103 Perhaps surprisingly the consideration of Special Forms of Trading (“SFT”) receives

comparatively little discussion in the literature. SFT is an allowance that is made to

(deducted from) the available expenditure for a goods/business category on the basis

that a certain proportion of spend on goods is not directed through shops. This

traditionally includes catalogue sales (but not catalogue shops), open markets, car

boot sales etc. Estimates for the appropriate percentage deductions have been

provided through MapInfo Information briefs (e.g. Information Brief 99/2) but has also

been included in household surveys (e.g. Aberdeenshire in 2004). Most recently the

rapid growth of internet retailing has been a focus of debate with the rapid growth of

this form of SFT raising questions about the future of conventional retail floorspace

demand.

Expenditure Growth Assumptions

4.104 A key factor that affects the calculation of total available expenditure is the growth

rate per capita that is applied between the base year (or year of source expenditure

data) and the test year. CBRE (SE, 2004) comment that “this element can attract a

wide range of different assumptions about annual growth rates for convenience and

comparison goods expenditure” (or indeed, for that matter, convenience and

comparison business expenditure).

4.105 The principal source that has been used by most practitioners for expenditure growth

assumptions has been from MapInfo (previously URPI). However issues associated

with this source include:

• A degree of uncertainty about the long term updating of forecasts – after the

relevant information was provided in 1999 (Information briefs 1999/1 and

1999/2) there was a gap of 5 years before the next update was provided (Info

briefs 2004/1 and 2004/2) this was updated again in 2005 but no edition of

forecast growth rates was produced in 2006.

• Up until 1994 most reliance was placed on trend forecasts and the main debate

was which trend set should be used – frequently planning authorities favoured

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ultra-long term forecasts (which related to data sets stretching back into the

1960s) whereas proposers of developments favoured long term (and

occasionally medium-term) trend forecasts which had higher growth rates.

• The 2004 forecasts identified that, for convenience goods in particular, trends

forecasts had little (or no) statistical reliability. As a result MapInfo combined

with Oxford Economic Forecasts to produce macro-economic forecasts of

expenditure growth - these were updated in the 2005 forecasts. There is,

therefore, some debate about whether trend forecasts should be retained or the

model forecasts used.

Development Turnover

4.106 Some have contended (e.g. Roberts 1982) that the turnover of a proposed store is

the single most important variable in assessing its impact. This comment is a bit

simplistic and a case can be put forward that in many circumstances trade diversion

assumptions will have a greater impact on RIA results. Nonetheless it is an important

factor in determining the calculation of retail impact.

4.107 Drivers Jonas (1992) summarise the key components to be used in assessing

development turnover as comprising both a reference to the characteristics of the

catchment area (e.g. population density and available expenditure) as well as

referring to published information on the performance of the relevant retailers or retail

sector under consideration (e.g. by reference to Retail Rankings or Verdict). Some

care is need with the data to treat VAT in a consistent manner and to exclude petrol

sales from supermarket operators’ sales. The latter is straightforward and, in the

case of single operator developments (e.g. supermarkets) is easily identified and

agreed. However, as Drivers Jonas point out “it does not take into account the

characteristics of the catchment area and the amount of spending likely to be

available to support the development”. One danger of placing weight on the latter is

that there is a tendency for prospers of schemes to identify turnover rates at or below

national averages but never above – this is obviously inconsistent in that, for a sales

density to be an average there must be some stores selling above the average as

well as below the average.

4.108 One long established alternative method is the use of a “market share” approach.

This is where the application of market shares (e.g. x% market penetration for a

defined catchment isochrone) is applied to the observed population or available

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expenditure around the proposed store. A variation to this approach is the

“Donaldsons’s method” which uses a formula to adjust market share levels for each

drive-band according to the size of the proposed store and the density of the

catchment population. Drivers Jonas (1992) report that this was rarely used in the

early 1990s and we are not aware of this approach having being used in Scotland in

recent years.

4.109 The principal difficulties of the market share approach are that (i) it presumes that

market share information is actually available for a comparable store – this type of

information is not widely published which means that special household surveys

would need to be commissioned for the comparator store and (ii) for comparators to

be valid not only does the comparator store need to be similar but so too must the

demographics, social-economic profile and geography of the catchment area need to

be similar. Furthermore the level of competing retail provision within and outwith the

catchment needs to be comparable for the result to be valid. This is highly unlikely to

be achieved in the context of retail development proposals in Scotland.

4.110 A final issue on this topic relates to the assumptions about sales density changes

over time – this has been discussed briefly in the context of RCA but is also relevant

in RIA techniques.

Trade Draw

4.111 Trade draw identifies the origin of turnover of the proposed development in terms of

the available expenditure generated within different parts of the identified catchment

area and, where appropriate, beyond the catchment area (e.g. as a result of pass-by

trade). Most commentators identify trade draw as a key stage within RIA and, as has

been noted, it is a factor that can feed into the estimate of development turnover (and

in this regard would come before calculation of development turnover rather than

after it). Market penetration is the proportion of available expenditure within a defined

zone/area/catchment that is directed to a proposed (or even existing) development.

Both England (1999) and Drivers Jonas (1992) consider the identification of trade

draw to be a key stage in RIA.

Trade Diversion

4.112 Trade diversion is distinct from trade draw and identifies the source of turnover of the

proposed development from existing shops and centres. There is general agreement

amongst commentators that at this stage RIA can become highly subjective and there

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is no doubt that this stage is fundamental to the calculation of retail impact. England

(1999) points out that trade diversion is not directly related to trade draw since other

factors will need to be taken into account such as the similarity of competing retail

offers (i.e. “the principle that “like competes with like”). He confirms that trade

diversion is the “crucial and most contentious element of impact assessment”.

Similarly Roberts (1982) states “the ‘science’ of retail impact analysis rapidly

transforms into subjective assessment at this stage in the process” (quoted in Drivers

Jonas, 1992 p77).

4.113 England (1999) recommends that, at this stage “the recommended approach is the

subjective allocation of residual expenditure from each sub-area to each centre

based on the types of centre/store most likely to compete with the proposed

development. This is a close approximation of how shoppers will change their

shopping behaviour after a new store opens.” (England 1999 p110).

4.114 Drivers Jonas identifies additional relevant factors to be taken into account as follows:

scale of centres; intervening distance; existing shopping patterns; inclination of

shoppers to travel and the relative attractiveness of centres.

4.115 Notwithstanding the above comments about the subjective nature of trade diversion it

is interesting that Drivers Jonas (1992 p81) reports that Strathclyde Region

considered that a specific method could be used which was the “trade share

approach” which considered that each centre or store would lose trade in proportion

to its existing trade share – this approach has also been referred to as the “retention

level” approach by Breheny. However Drivers Jonas point out that this can only be

useful as an initial assessment because it follows that, in the case where the

catchment for existing centres lies entirely within the catchment of a proposed

development, then all centres will lose the same proportion (percentage) trade –

which is highly unlikely since different centres will have a different range of goods on

offer and have different levels of accessibility vis-à-vis the new development.

4.116 To assist in the process, especially for developments with wide ranging or complex

catchment areas (e.g. in large urban areas) Schiller (1983) recommended the

breaking down of the stores catchment into smaller zones within which existing

shopping patterns are known or can be estimated more realistically. Certainly

breaking down the problem of trade diversion into smaller areas can assist in

grappling with the complexities of flows and can assist in estimating trade diversion

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but even with this Schiller notes that the reallocation of spending cannot be done with

any precision.

4.117 Finally it should be noted that Drivers Jonas report that “a number of consultants

simply reallocate spending within each travel-time zone on the basis of judgements

as to the existing centres most likely to be affected, perhaps assisted by survey data

relating to existing shopping patterns and the current popularity of each centre as

compared to its probable popularity following the opening of the new development”

(SO, 1992 p83).

Clawback of Leakage

4.118 Clawback of leakage is a specific aspect of trade diversion assumptions that can be

highly controversial. Leakage is existing expenditure which is generated within a

defined catchment/study area but spent in shops outwith the area. [Distinctions can

be made between net and gross leakage given that in most catchments there will be

some inflows of expenditure as well as outflows – net leakage would be the net

amount of flow (i.e. outflow – inflow)]. Clawback of leakage is the amount of

expenditure which is attracted to the proposed development which originates from

residents with the catchment (i.e. identified as trade draw) but is diverted from those

centres currently outwith the catchment (or could also include increases in the inflow

of expenditure from residents living outwith the main catchment area).

4.119 There is little doubt that clawback of leakage occurs. Hillier Parker in their review of

the impact of large stores (DETR, 1998) comments that “highly accessible

superstores are likely to achieve higher levels of clawback than smaller less

accessible stores” and they identify one store at Fakenham where 46% of its trade

was clawback of leakage. They emphasise though that expectations as to the

prospect for clawback of trade must be realistic and reflects the centre’s position in

the retail hierarchy relative to other centres. It is notable that this is an area of

frequent disagreement between planning authorities and proposers of new

developments. England (England 2001) concludes that “the best advice is to look for

clear justification of a predicted high level of clawback, preferably based on

household survey evidence of shopping patterns and leakage”. Furthermore it must

be recognised that clawback of leakage is still representative of an adverse retail

impact albeit on centres located some distance away from the proposed

development.

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Sensitivity Testing

4.120 The role of sensitivity testing has been noted earlier as one means by which greater

confidence can be placed on the forecasts of retail impact. England (2001) considers

that sensitivity testing is always useful and can overcome the concerns of local

authorities and Inspectors about the degree of confidence to be attached to the

conclusions of an RIA. He considers that “it should be an essential component of the

methodology” (England 2001).

Measurement of Impact

Percentage Impacts

4.121 The most commonly used measure of impact is the percentage of trade lost from

existing centres and/or shops.

4.122 The reference to specific figures in the draft NPPG8 in 1996 caused a degree of

criticism for example, somewhat after the withdrawal of the indicative ranges.

Drysdale (2001) commented that “a survey of appeal decisions in Scotland shows

that impacts of less than ten per cent have been deemed unacceptable while impacts

of well over 20% have been approved as acceptable. So there is no emerging

evidence to give support to the 10-15 percent range cited by the Scottish Office”.

Similarly England points out in 1999; there is uncertainty about the significance of a

particular level of impact. The Hillier Parker study (DETR 1998) considered that, in

every case, it is the implications and interpretation of the forecast level of impact

which determines the acceptability or otherwise of the proposals. This reflects the

position that, according to Hillier Parker “there is no available ‘benchmark’ to

determine what percentage decline in turnover will lead to an unacceptable fall in

profitability. It will depend upon the particular circumstances of individual retailers. A

significant fall in turnover can lead to a disproportionately high impact on the

profitability of stores, influencing the ability of retailers to reinvest in store

improvements/refurbishment, and ultimately to continue trading. In other

circumstances, reduction in turnover has no adverse consequences.” (DETR 1998 Ex

Sum para 27).

4.123 England (1999) adopts a more deterministic stance relating significance of impact to

percentage impact and an overall measure of vitality and viability. His premise is

“because there is a direct relationship between quantitative impact and the vitality

and viability of a centre, it follows that significance of a particular level of impact on a

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particular centre can be judged by a ‘model of significance’ of impact. The ‘model’ is

a graphical representation of the relationship between percentage trade diversion

and the vitality and viability index based on the town centre appraisal” (England 1999

pp131-132). He adopts two different models – one for foodstores and one for non-

foodstores (this is on the assumptions that “foodstores can often withstand higher

percentage impacts”). The validity of this approach is explored further in the chapter

on town centre Health Checks.

4.124 Drivers Jonas in 1992 identified at that time that there was broad consensus that

retail impact studies should include percentage impact calculations however they

note that RIAs should also deal with qualitative as well as quantitative issues – and

they report that most consultants contacted for that survey recognised that the

percentage impact estimate in itself is of limited use. This position has not changed

although the tendency is for greater emphasis on a range of factors associated with

the range of vitality and viability indicators of centres affected for assessing

significance of impact. This does not apply to all RIAs and we can confirm that the

situation described by Noel in 1990, that whereas “the quantitative assessment of

impact should be a starting point to inform ..it is too often seen as an end product in

itself”, still remains the case in a significant number of RIAs in Scotland.

Residual Turnover

4.125 A range of commentators advise that percentage impact alone is not sufficient for

assessing retail impact (e.g. Healey & Baker 1995, England 1999, Drivers Jonas

1992). Residual turnover (i.e. the turnover of retail units/centres after the impact of

the proposed development – especially the sales densities compared to national

averages) is an important measure.

Impacts on Retail Sectors

4.126 There has been some discussion whether retail impact should focus on specific retail

sectors affected by a new development or on the trade of the town centre as a whole.

From observation the most common practice is to identify impact on the particular

sector (e.g. on convenience goods/businesses in a centre if considering the impact of

a supermarket). However England 1999 suggests that this approach could be

misleading and the overall impact on the centre as whole would be significantly lower.

He considers though that, on balance “although it necessary to assess impact

separately for convenience and comparison shopping in some situations it is

advisable also to consider the overall impact in terms of total trade”. CBRE in their

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review of NPPG8 refer to “category exposure” in which they pose the question: “is it

an impact of convenience turnover on the convenience turnover of the centre? – if so,

is the impacted convenience turnover of the centre the mainstay of its overall

turnover, or a small fraction of a much larger non-food presence?” (SE, 2004 p99).

The implication of this question is that, if it is the latter then the impact may be less

significant. However situations can occur where a social impact could arise whereby

if the development adversely affects a residual convenience function of a centre this

may disproportionately affect residents living in or close to the centre who would

suffer significantly adverse impacts on local convenience provision.

Factors in assessing the Significance of Impact

Overall Impacts

4.127 PPS6 identifies a number of concerns that should be considered in assessing the

significance of the impact arising from a proposed retail development on existing

centres. These are set out at para 3.22 and includes factors such as impact on the

spatial planning strategy for the area, on public or private sector investment, impact

on vitality and viability, vacancies and so on. Similar advice is provided in the RPG

used in Ireland. This is important and, as England (1999) points out “Inspectors will

attach more weight to the interpretation of the figures than to the figures themselves”

4.128 Frequently attention is given to the closure of shops resulting from the development

of new retail floorspace. However, as Hillier Parker point out (DETR, 1998) there

may still be a concern even when shops do not close that the impact will result in a

general decline in activity elsewhere in the centre and adversely affect the vitality and

viability of the centre. In the case of the review of the impact of major foodstores,

which was the subject of the Hillier Parker study, it was noted that this would be a

particular concern if there is a centrally located foodstore acting as a key anchor

retailer within the town or district centre.

4.129 Drivas Jonas (SO, 1992) considers that there is little evidence for a causal

relationship between the opening of new retail developments and the closure of

existing shops except where the new development is physically close to existing

shops. There may be time lags before the effects of trading are felt in terms of

closures and vacancies. Independent traders may continue to operate even though

their businesses are not viable or retailers may operate under long leases that

discourage them from closing less profitable branches in town centres until the end of

their lease period.

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4.130 Factors that will need to be considered in determining the significance of impact and

appraisal against the types of issues raised in PPS6 include the following:

• The existing conditions and strengths of the centre (especially the viability of

businesses) which could be manifested in over- of under-trading.

• Impact on residual turnover.

• Impacts on key anchor stores in the centres.

• Prospects for re-occupation of units to new tenants (often in different retail

sectors).

• Effect of the loss of trade on the turnover of the centre as a whole and the role

of non-retail functions (including retail services) within the centre.

• The physical location of the development and the potential for linked trips (see

below).

• The anticipated competitive response of businesses to the development

(improvements/reinvestment, extension of the range of services etc) which could

result in an overall improvement of shopping facilities in the centre.

4.131 The above factors have been identified by Drivers Jonas (1992), England (1999),

Hillier Parker (DETR 1998), CBRE (SE, 2004), Howard (1988) and specific aspects of

the above are discussed by Thomas & Bromley (2000) and Acres (2006). Drivers

Jonas (1992) considers that one way forward to assist in this appraisal process could

be for the government to identify a series of tests to apply to existing centres in order

to judge their current health against which one can assess the extent to which this

may decline from a proposed development. They put forward a series of questions

that should be considered in assessing the significance of impact:

• Existing conditions of centres: the extent to which the centre is fulfilling

important community functions; its current performance (e.g. turnover,

congestion, multiples representation – typical V&V indicators); is it improving or

declining?

• The effects of the new development: residual turnover levels; impacts on

anchors; the prospects for re-occupation of vacated units; impact on potential

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development commitments in the centre; the importance of the impacted retail

sector in the context of the shopping centre as a whole; the role of other

unaffected functions (such as services) in the centre on its vitality and viability;

the potential for linked trips; the benefits of the new development in its own

terms; the potential for competitive response by existing retailers; the overall

effect of the development on the range and quality of shopping facilities in the

area.

4.132 This comment raises the profile of the indicators of vitality and vitality and the

significance of town centre Health Checks as a key consideration in assessing the

significance of impact. The role of TCHC indicators is expressly identified as

significant by a range of commentators (including England 1999, Hillier Parker 1998,

CBRE - SE 2004).

Impacts on Employment

4.133 Impacts on employment are frequently a concern in planning authorities – especially

in the context of developments which are claiming a “clawback of leakage” argument.

It is argued that, as a result of clawback of leakage there will be a net increase in

local employment in the retail sector.

4.134 The issue of employment generation is the subject of debate and dispute. For

example Hillier Parker (DETR, 1998) refer to research by the National Retail Planning

Forum which concluded that there is strong evidence that new food superstores

have, on average, a negative effect on retail employment.

4.135 This debate is probably as much about presentation as fact and the two views can be

reconciled. On the one hand an overall decline in global employment associated with

retail development (at least in terms of direct impacts at least) is to be expected – as

Guy (2001) points out: “since large foodstores are more labour efficient than small

shops (measured in terms of sales per employee) one would expect an overall

decline in retail employment following the impact of a new store. However there is

evidence that the initial increase in retail employment following the opening of a new

store is maintained for several years”. The latter part of this quote probably reflects

the lag effects of retail impact – i.e. there will be delays before adverse impacts are

converted into closures. However in the context of national economic policy in which

weight is placed on increased labour productivity at a macro-economic level reduced

employment is not necessarily undesirable (provided that the lost retail employment

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is gainfully employed elsewhere in the economy). If significant clawback of leakage

can be demonstrated clearly as a result of a development it is entirely likely that

(within the catchment area for the new store) there can be a net increase in

employment in both the short and long term. However – there will, of course, be

adverse employment effects in those centres outwith the catchment that have

suffered loss of trade which had been derived from residents within the catchment.

4.136 A second comment should also be made. Employment effects associated with retail

impact are almost exclusively based on direct impacts (i.e. conversion of turnover to

employment, based on national average productivity which is provided, for example

in Retail Rankings). We have not identified any assessments that have considered

either indirect or induced employment effects from retail. There is also a possibility

(to our knowledge not proven) that increased efficiency in the economy can also

result in other benefits resulting in broader increases in employment. The key

economic premise that underpins nearly all RIAs is that a new retail development

simply redistributes trade and does not generate new trade at a global economic

level. We consider that this assumption is reasonable for the purposes of RIA but it

may overestimate impacts marginally because pure redistribution of trade is not

entirely consistent with a rapidly growing retail sector.

4.137 Finally the treatment of employment needs to be treated with some caution. The

rapid growth in available expenditure (especially for comparison goods) can be

considered to mask adverse effects associated with new retail development. That is

the growth in employment in a centre may be lower than would have occurred if the

new retail store had not been developed.

Other Issues

4.138 There are a range of additional issues that concern the implementation of RIA

techniques and have been raised within the literature. These issues are:

• Cumulative RIA.

• Secondary impacts – the role of linked trips and also competitive response from

existing retailers.

• The role of business v goods bases for RIAs.

• The scale of development requiring RIA.

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• Sources of data.

Cumulative RIA

4.139 CBRE (DETR, 1998) conclude that the long term cumulative impact of a succession

of new foodstores can serve to undermine a store or centre over a number of years.

This supports the view of Drivers Jonas that if there is an outstanding planning

permission for a retail development and that there is reasonable prospect that it will

be built then it will be necessary to build this commitment into the assessment of

retail impact.

4.140 In terms of undertaking the Cumulative RIA Drivers Jonas commented:

“None of the consultees to this study suggested any particular methods of cumulative

impact assessment, although observations were made to the effect that standard

approaches could be used with care. In our experience the most common “manual”

approach to cumulative retail impact is to total the combined estimated turnover of

the new proposals and then apply a discount to that total, on the basis that each new

development will impact upon the other and in combination they will effectively

reduce each others turnover potential.

“This approach has its weaknesses in particular the assumption that all of the

proposals will come on stream together and will immediately impact upon each other

prior to impacting upon other existing centres. In reality each new scheme will open

separately from the others and with each opening a fresh “wave” of impact on

existing centres, diminishing in intensity but still adding to “net” impact”. (SO 1992

p85).

4.141 Perhaps more significant than the above criticism is that the combined approach

referred to above is only valid if the proposed developments are directly comparable

(e.g. a series of superstores). If the developments cover a range of retail types (e.g.

superstore, discounter and retail warehousing) then each will have different patterns

of trade draw and trade diversion and combining these into a single development

entity will not be valid. The response to this type of problem would, therefore, be to

undertake a series of RIA iterations adding each new development at the appropriate

stage to estimate the cumulative impact.

4.142 Hillier Parker (DETR, 1998) have considered that current practice for cumulative RIA

is weak and have called for additional research into cumulative retail impact.

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Secondary impacts

4.143 RIA techniques are primarily concerned with the direct impact of stores on existing

shops. There is some debate as to the role of secondary impacts with particular

attention focussed on the role of linked trips (primarily in relation to edge of centre

developments but also in the context of out of centre stores) and also the extent to

which existing shops are able to respond to competition from new retail floorspace.

Very little attention has been given to try and quantify these effects.

Linked Trips

4.144 In terms of linked trips the Hillier Parker study (DETR, 1998) observed in one of its

case studies (Warminster) that there was evidence of a significant level of walking

between the new edge-of-centre store and the town centre. The degree of linkage by

walk mode was considered to be strongly influenced by the overall quality and

convenience of the route as well as the distance. However linked trips are also

undertaken by other modes of transport. In overall terms they found that between

25% and 65% of people visited an out-of-centre foodstore and town centre during the

same trip. Notwithstanding this they conclude that “the introduction of a new out-of-

centre store does not appear to have a significant effect on the propensity to link

visits to the foodstore and the town centre during the same trip…there is no evidence

of any significant increase in the use of centres for non-food shopping” (DETR 1998

Exec Sum para 48). In relation to edge-of-centre stores the key issue (in the context

of foodstore development) is the extent to which the catchment is able to support

both the new store and any existing supermarkets in the town centre rather than the

potential for linked trips. However they do advise that a thorough assessment of the

linkages between edge-of-centre stores and town centres/district centres is

necessary.

4.145 Evidence at a recent inquiry in Huntly (2006) has provided some limited data on the

value of linked trips between an out-of-centre store and a town centre linked to an

initiative by one supermarket operator to try and support town centre trade. This

showed (for quite limited time series data) that the scale of benefit to a town centre is

likely to be modest even when there is a financial incentive to undertake some linked

trips.

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Competitive Response

4.146 The ability of a retailer to respond to new competition will depend upon a range of

factors including the financial resources available to the retailer. Responses can

include extending the range of goods sold, price responses, increase in the services

available to shoppers and altering hours of opening. Brown comments that “a

competitive reaction by existing retailers…should ensure that the loss is less than the

full amount [than would be indicated in conventional RIA methods]” (reported in SO,

1992 p80).

The role of business v goods bases for RIAs

4.147 Considerable debate has taken place both in the literature and at inquiries about the

merits of adopting either a goods or business based approach for undertaking RIAs.

England (1999) argues that “the conclusion for best practice is that in most cases

goods-based expenditure and turnover should be used. A goods-based definition

should certainly be used in any analysis of comparison shopping..” In defence of

business based analysis he comments “the most clear justification for using a

business basis is in the case of a superstore proposal in a conurbation with

numerous existing superstores and variety stores where the adjustment of floorspace

may be too onerous. However the problems of unreliability of convenience

expenditure trends on a goods basis makes it advisable to use the business basis for

the assessment of proposals for all convenience shopping developments” (England

1999 p106). He reinforces this view in 2001.

4.148 In PPS6 although clear reference is made to a goods basis for assessing retail

capacity no such advice is provided for retail impact.

4.149 The arguments in favour of a business-base are that (i) goods-based forecasts for

expenditure are unreliable and (ii) the increasing role of comparison goods in

supermarkets makes it particularly appropriate for business-based approaches to be

used. In relation to the first point MapInfo noted in 2004 that they did not consider

that trends based on data before the early 1970s could be used for business-based

forecasts because of the lack of data consistency and also the criticism of goods

based trends is somewhat superseded by utilisations of the MapInfo/OEF modelled

forecasts of expenditure growth. The biggest problems with business-based

approaches is that the MapInfo forecasts are aggregated for all convenience (and

comparison) businesses in the UK. This means that the business forecasts are only

valid for new and existing businesses which happen to closely match this national

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average. Given that grocers vary greatly in their dependence on comparison goods

(e.g. Morrisons has only 10% of floorspace typically devoted to comparison goods

and Asda, for its largest stores of the order of 40%+) it is difficult to see how this can

be sustained in an RIA. This is even more acute when considering convenience

businesses in existing centres – for those which do not have major superstores

located within the centres (which is the majority of town centres in Scotland) the

convenience sector is dominated by shops only retailing convenience goods –

therefore the application of business-based expenditure growth would be inconsistent

with the nature of the businesses found in the existing centres. Finally – in relation

to supermarkets and superstores at least, the adoption of a goods based approach is

typically associated with lower growth rates and so RIAs using these are likely to

produce slightly higher impact figures. This approach of potential over-estimating

impact rather than under-estimating it is more in line with a precautionary approach

than using business-based assessments.

The scale of development requiring RIA

4.150 Both SPP8 and PPS6 identify 2500 sq m GFA as an appropriate indicative threshold

for preparing RIAs to accompany applications for new retail developments. However

this has been criticised. Hillier Parker (ODPM, 2004) consider it to be “confusing and

inappropriate…there is no basis for such an arbitrary threshold” they suggest that all

such developments should be accompanied by a statement addressing the key

issues of need, sequential approach and impact but the level of detail would depend

upon the likely significance of the proposal. Earlier however Hillier Parker (DETR,

1998) had argued that all foodstore proposals over 1000 sq m, net sales outwith town

centres should be the subject of a combined retail, economic and traffic appraisal.

4.151 England (2001) has commented that local authorities tend to be over-zealous in their

requirements for information demanding a level of detail which is unreasonable or

unjustified – often seeking a level of detail that is inconsistent with the inherent quality

and accuracy of the data itself. Indeed in Scotland our experience is that the majority

of planning authorities seek full RIAs for discount foodstores of the order of 1300-

1700 sq m GFA. Drivers Jonas (SO, 1992) commented that planning authorities

should require the submission of an RIA only where there are particular shopping

centres which are recognised as fulfilling an important shopping function and which

are clearly vulnerable to new modern competition.

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Sources of data

4.152 Similar comments to those raised about data availability for RCA have been raised in

the context of RIA. Data weaknesses identified include the need for:

• Objective means for measuring town centre performance and turnover; and

• The provision of reliable floorspace data for all town centres and district centres.

4.153 In addition they have noted difficulties is the identification of clear town centre

boundaries and called for a workable methodology for identifying these so that they

are consistently identified across the country.

Current Gravity- Models

4.154 Although the dominant method for undertaking RIA in the UK at the present time is

the use of stepwise methods there are a limited number of organisations that provide

versions of gravity-models. The principal use of these is to provide advice for future

store location for multiple retailers looking to expand their existing retail networks.

However, they are. To a limited degree also used by planning authorities in reviewing

retail impacts.

4.155 A leading example of this type of model is CACI’s “Retail Footprint” model. CACI

state that this can “provide objective and consistent turnover forecasts for new sites

or the refurbishment of existing retail sites” and “by identifying changes in shopping

patterns Retail Footprint helps the retailer understand the potential impact a new

store will have on neighbouring outlets”3.

4.156 The Footprint Model uses gravity modelling techniques to combine the interactions of

a number of factors. These factors are as follows:

• Centre attractiveness. This is scored based on: the number of relevant multiple

retailers in each centre – derived from a database of over 650 fascias; The

average published turnover of each store’s fascia; and the number of

independent retailers in each centre.

• Distance/journey times. A combination of both driver-time and drive-distance

from shoppers’ place of residence to all possible retail destinations.

3 Quotes form CACI website: www.caci.co.uk, 2007

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• Centre Type. 40 distinct types of centre are identified and the model assigns a

distinct travel patter to each of these. These reflect the following factors: the

quality of retail offer in each centre; the location of each centre in the “UK’s

urban hierarchy”; and the specified function of the centre (e.g. shoppers travel

further to outlet centres and regional malls than to other centres).

4.157 The model is calibrated using credit and debit card data from one UK provider.

4.158 From the information provided by CACI it is evident that ken County Council has used

the model for assessing the impact of proposed retail developments.

4.159 As with most commercial software of this type the assumptions used for the model

are not available for scrutiny and the accuracy of the model forecasts is not easily

tested. Although the model is able to use far more powerful computer analysis than

was available in the 1970s and 1980s it is evident that this type of approach which is,

as far as planning authorities and developers are concerned essentially a “black box”

type of approach where assumptions cannot be challenged, are still subject to the

same criticisms that were directed to these models in past decades. That they are

essentially highly complex and the assumptions used in the models are both difficulty

to identify and to challenge. The comments made by Guy in 1991 (quoted at para

4.42 above) would appear to be just as valid to the current gravity-models as those

which were developed in the past.

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5 Town Centre Health Checks and Vitality & Viability Indicators

Introduction

Background

5.1 The concept of Vitality and Viability dates from the mid 1980s with the initial draft

planning policy statements for retailing in both England and Scotland. The concept is

also linked into the notion that town centres are more than simply “shopping centres”

for example, as BDP/OXIRM note: “town centres are clearly much more than this.

Whilst retailing has several roles to play within town centres the vitality and viability of

town centres depends upon the image or impression created by the totality of their

function and physical characteristics (DOE. 1992 p10). Similarly the revised PPG6

in 1993 stated “Good retailing contributes to the vitality and viability of town centres.

But vitality and viability depend on more than retailing; they stem from the range and

quality of activities in town centres, and their accessibility to people living and working

in the area” (DOE 1993).

5.2 The significance of TCHCs and V&V indicators in a development control context for

the assessment of retail proposals has been considered in the preceding chapter.

There is, though, clearly a major role for TCHCS to provide the baseline for the

development of Town Centres Strategies. The significance of this and regular

updating of TCHCs is emphasised by the Historic Burghs Association who note that

“the performance and prospects of town can rise or fall remarkably quickly as has

been experienced in a number of examples throughout Scotland” (HBA, 1999).

5.3 The initial focus on TCHCs and identifying a range of V&V indicators was provided

through the URBED report “Vital and Viable Town centres – Meeting the Challenge “

(DOE, 1994).

Definitions

5.4 In general there is limited distinction made in the literature between Town Centre

Health Checks and Vitality and Viability Indicators. Insofar as a distinction appears to

be made TCHCs are considered, in effect, to be the process of collecting information

on a range of individual V&V indicators. In terms of V&V the following concepts are

recognised:

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Vitality

5.5 Vitality refers to how busy a centre is at different times and in different parts (DOE,

1994, p55). Vitality can contribute to viability (for example increased footfall can

support increased turnover and rents).

Viability

5.6 Viability refers to the capacity of the centre to attract continuing investment not only to

maintain the fabric but also to allow for improvement and adapting to changing needs

(DOE, 1994, p55). In practice viability typically refers to commercial indicators

relating to the ability of centres to support investment – this therefore includes such

factors as turnover, rent and yields.

National Policy Requirements

5.7 There is, perhaps unsurprisingly, a close fit between the indicators identified for

measuring vitality and viability in government policy in the four UK nations and in

Ireland. This is shown in the following table.

Vitality and Viability Indicators: UK and Ireland National Policy Requirements

Vitality and Viability Indicator Scotland England Wales Northern Ireland IrelandSPP8 PPS6 TAN4 Draft PPS5 RPG

Pedestrian flow Y Y Y Y YPrime rental values Y Y Y Y YSpace in use and changes Y Y Y YEOC & OOC Space in use YRetailer representation and intentions Y Y Y Y YCommercial yield Y Y Y Y YVacancy rates Y Y Y Y YPhysical structure of centre YAccessibility Y Y Y Y YConsumer surveys Y Y Y Y YCrime/Safety Y Y Y YCapacity for growth or change YEnvironmental quality Y Y Y YTurnover in relation to floorspace Y

5.8 It is recognised that none of the lists set out in government policy is considered to be

definitive and, for example, Box 4 in SPP8, expressly identifies the list of indicators as

examples. But the lists of indicators identified in national policy statements, as set

out in the above table, is useful in identifying those indicators identified to be of

sufficient importance for them to be named in policy.

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Principles for the Development of Indicators

5.9 Before considering the details of the process of TCHCs and individual V&V indicators

it is worth noting general considerations and comments made about the role of

indicators used for assessing the performance of town centres. A number of authors

have considered this in detail under the generic heading of “key performance

indicators”. Outwith the policy framework there have been arguments made in

support of such indicators back to the early 1970s – Pal & Sanders (1997) argued

that it is imperative that some means of measuring the effectiveness of revitalisation

schemes is in place and considered that the scope and type of data that should be

collected should remain with local authorities. They considered that the use of core

indicators could allow the build up of information over a period of time allowing

planners to monitor progress.

5.10 Kotval (2001) describes an indicator as a measure or set of measures that describes

complex social, economic or physical reality and a measure is one data point that

acts as a gauge to inform how well or poorly policies/proposals are being achieved

with respect to the indicator. Indicators provide a tool for analysis, mediation and

decision-making. There is, though, a danger in the use of indicators and measures –

Likierman (1993) points out that “what gets measured get done” and that

performance will get skewed towards what is being measured. He sets out a range

of “lessons” in the use of performance indicators. These are useful to note in the

context of developing V&V indicators and include the following:

• Concept: ensure that all elements are included within the measurement; provide

safeguards for “soft” measures to ensure they are not omitted;

• Preparation: importance of ownership with stakeholders; look beyond the short

term; establish realistic levels of attainment before targets are set;

• Implementation: recognise that indicators need time to develop and may need

revision; ensure they are understandable; consider the role and value of proxy

measures; and

• Use: data underpinning measures must be reliable; results are guides not

answers; trade-offs and interactions between measures should be recognised;

results must be user friendly.

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5.11 Building on these types of principles Kotval (2001) and Hollander (2002) have

identified a range of criteria that should be considered in identifying performance

indicators. They consider that measures should be:

• Relevant and have implications for policy;

• Valid, objective and defensible;

• Simple and clear;

• Able to contribute to the understanding of broader issues;

• Able to reflect trends;

• Consistent and reliable;

• Cost effective; and

• Comparable.

Overview of TCHC Approaches

The need for/purpose of V&V indicators and TCHC’s

5.12 The use of V&V indicators and health checks evolved over a period when town

centres were experiencing increased competition from out of town retail warehouse

and foodstore development. The literature review has identified a variety of sound

reasons for the production and assessment of V&V indicators over time, linked to the

evolution of town centre planning policy, which can be summarised as follows:

• To inform development plan and development control decision making;

• To ensure compliance with planning policy requirements (SPP8, PPS6);

• To identify trends over time and establish whether conditions are improving,

static or declining;

• As a tool for identifying the agenda for improvement to a centre;

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• To help assess the impact or success of a development/initiative/series of

investments;

• As a basis for informing investment decisions (both for the public and private

sectors); and

• To assist in the process of building consensus/partnerships, including Town

Centre Management and BIDS.

Review of Approaches

5.13 As noted above national policy requirements for TCHCs and the range of V&V

indicators that should be considered are expressly identified as a guide for the issues

that should be considered in relation to planning for town centres. It is therefore

useful to consider and compare different approaches that have been recommended

in practice. It is evident that a large number of planning authorities collect information

on V&V indicators and that practice varies greatly across the UK – this review

therefore focuses on those who have specifically advocated the merits of the

approaches that they have adopted. This often reflects the specific purpose that the

measures of the indicators are expected to support.

5.14 The following are reviewed here:

• Building Design Partnership (BDP) and Oxford Institute of Retail Management

(OXIRM) – this work for the DOE acted as a forerunner to the URBED report

published in 1992.

• Urban and Economic Development Group (URBED) – in their initial review for

the DOE – this forms the effective starting point for the collection of information

through TCHCs.

• London Planning Advisory Committee (LPAC) and Mayor of London office

(MOL) – commenced systematic TCHCs for all principal centres in London – this

is significant not only because of the early start of collecting data (mid 1990s)

but also the scale of the number of centres covered (i.e. London accounts for

nearly 15% of the UK population).

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• ATCM – guidance in the context of supporting the activities of Town Centre

Managers.

• Historic Burghs Association – this set out an approach in the evaluation of

historic towns in Scotland developed in the late 1990s,

• England – 1999 – illustrative of advice proposed by a planning consultant

primarily in the context of assessing the significance of retail impact.

• Practice in planning authorities

• Practice in the USA and Canada – as an interesting comparator to UK based

approaches.

BDP/OXIRM

5.15 BDP/OXIRM, as part of their study for the DOE in 1992, undertook a survey of

planning authorities in England and Wales and identified a list of indicators that were

considered, by the authorities, to be important for measuring vitality and viability.

These are set out below.

BDP/OXIRM Planning Authority Survey (DOE, 1992)

Vitality and Viability Indicators identified by Authorities

• Environmental quality • Vacancy rates • Rental levels • Retail investment levels • Non-implementation of major retail

proposals • Investment in maintenance • Congestion

• Availability of development sites • Unemployment rates • Expenditure leakage to other areas • Seasonality and impact of tourism • Relocation of retail units to Enterprise

Zones • Car parking provision

5.16 It should be recognised that these are not necessarily V&V indicators but identify the

factors that planning authorities considered to be important for the current and future

health of their town centres. This, therefore, provides a context for the identification of

indicators in later work.

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URBED – Vital and Viable Town Centres: Meeting the Challenge (DOE, 1994)

5.17 The URBED approach was based on identifying “a few key factors that can be used

to judge whether a town is ‘at risk’”. They sought to suggest ways in which centres

could be compared and information for changes over time that could be used.

URBED stressed though “this method however can only give a broad indication of

how a centre ranks and does not say anything about the underlying components of a

healthy town centre”.

5.18 The approach utilises both V&V indicators – two of which (pedestrian flow and yield)

and identified as key indicators plus a series of additional indicators – and also

broader assessments of what are identified as the four “essential qualities” for an

attractive town centre (referred to as the four “A”s). These are assessed using a

scale based on the assessor’s judgement (for this reason it is criticised by Tomalin,

1997) and are summarised below.

URBED Town Centre Health Check (DOE, 1994)

Vitality and Viability Indicators

Key Indicators

Other Indicators

• Pedestrian Flow • Yield

• Demand for shop units from multiples • Change in the number of multiples • Space in use in a centre • Quality of retail offer through changes

in retailer profile • Vacancy rates • Qualitative factors

Qualities of an Attractive Centre

Attractions – range/diversity of shops; non-retail attractions; business opening and closing; critical mass Accessibility – how easy to reach a centre; mobility time and cost; public transport; traffic management and signage; barriers; car parking; access by other modes

Amenity – cleanliness and attractiveness; security; treatment of buildings and open spaces Action – making things happen; organisation capacity

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LPAC London Mayor’s Office

5.19 The work commenced by LPAC in the early 1990s and subsequently maintained

through the Mayor of London’s office is significant in terms of both the length of time

that information has been collected and the geographical scope of centres that have

been assessed. The approach adopted in the 1990s reflects closely the URBED

work (URBED were initial advisers to LPAC on the design of the system) and it is

useful in establishing the extent to which the URBED proposals could be

implemented in a practical way.

5.20 In the introduction to the initial TCHC (published in 1996) LPAC state “Future Health

Checks will prevent the fossilisation of the network by ensuring that the designations

of centres are kept up to date. At a more local level Health Checks will be important

in monitoring the vitality and viability of individual town centres….(they) will help to

co-ordinate the relative development of centres and, ….ensure that adequate in-

centre capacity is available to accommodate pressure for out-of-centre development”.

5.21 The objectives set out by the LPAC methodology in undertaking health checks

included:

• To record a standard set of information on a town centre covering the main

indicators of health and performance;

• To identify the principal roles of the centre, including any specific roles which

might be important over a wider area;

• To establish trends over time in some key indicators;

• To assess the centre in qualitative terms from a user’s point of view; and

• To create a profile of the centre by summarising the key characteristics, thereby

allowing comparison with other relevant centres.

5.22 The methodology (designed by URBED, Donaldsons, and Halcrow) included a three

stage process; statistical research, attitudinal research and comparative analysis –

each designed to assess the wider role of the town centre. Stage one involved

collecting data on the Four A’s (see above) – the facilities in the town which are vital

to making it attractive and include standard retailing measures (floorspace, numbers

of units, vacancies, yields and rents). It also included an analysis of culture the arts

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and entertainment, the number of people living in the centre and the educational,

civic and health facilities available. It was proposed that accessibility is analysed by

local accessibility – the extent to which a centre is user friendly by foot or by public or

private transport – and by an index of public and private accessibility based on total

consumer purchasing power that might be expected to reach the centre taking into

account density and wealth of the surrounding population and travel times. Amenity is

measured in terms of what makes the town centre a pleasant environment, facilities,

levels of safety / security etc. A comment on the action and initiatives being taken by

the local authority (and others) completes stage one of the health check.

5.23 Stage two involved qualitative surveys, consultations or independent observations

and highlights the perceived strengths and weaknesses of the centre. Stage three

involved comparing the centre’s performance with other centres of a similar standing.

Whilst this three stage approach arguably provides a balance of qualitative and

quantitative analysis of a centre, Warren (1996) suggests that there are issues

relating to the reliability and consistency of information particularly in terms of

available data on floorspace, turnover and employment.

5.24 The following sets out the measures initially collected in 1996 and also those

included in the latest review (2006).

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LPAC/Mayor of London Health Check – 1996-2006


Indicators

1996

2006

SECTION 1

• Retail floorspace • Types of retail units (multiples, malls, key retail

services e.g. banks) • Retail floorspace consents • Site area available for development • Retail capacity calculations (if available) • Office floorspace • Financial performance – yields, rents (retail, office

and industry) • Markets • Late night shopping details • Sunday shopping • Arts, culture and leisure facilities • Education facilities • Community and health services • Civic facilities • Other community facilities • Public transport facilities/peds/cycles • Bus/rail/tube routes • Car parking provision • Shop mobility • Pedestrianised streets • Conservation areas • Accidents and crime • Town centre initiatives • Special features which attract visitors • Employment

SECTION 2

• Attitudinal aspects “identify a range of factors as being good, average or poor based on visitor survey, group discussion or by observation”: o Attractions o Accessibility o Amenity

Y Y

Y Y Y Y Y Y Y Y

Y Y Y Y Y Y Y Y Y Y Y Y Y Y

Y Y Y

Y Y

Y Y Y Y Y Y Y Y Y Y Y Y Y

Y

Y Y

Y Y

Y

Only seeking info on

whether attitudinal survey has

been undertaken

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5.25 The comparison shows that, for the vast majority of directly measurable indicators the

same range of information is being completed. This spans the period of surveys

undertaken leading up to publication in each of 1996, 1999, 2003 and 2006. The

initial work in 1993-95 was undertaken by the three consultants for the largest 54

centres and the remaining (200 or so) were undertaken by the boroughs. LPAC/MOL

and the boroughs are able to use the data for comparative analysis and assess

changes over time.

ATCM

5.26 The TCHCs reviewed so far have aimed at meeting a wide range of aims including

the development of planning policy, evaluation of development proposals and also for

providing baseline information for assessing strengths and weaknesses of centres

prior to the development of town centre strategies or similar. The advice provided by

ATCM is focussed on the latter rather than the former.

5.27 In 2004 advice was provided through the ATCM summer school based on experience

from a range of contributors to the school. This emphasised that “the economic and

social life of our city centres and their attractiveness as places to invest, work and

play is critically important. Monitoring that is useful because it allows us to build

baselines” (ATCM 2004).

5.28 Additional ATCM guidance also places emphasis on qualitative appraisals using 5

point scales (“excellent” to “unsatisfactory”) for a range of topics including: first

impressions; car access; delivery access; public transport; pedestrians; car parks; the

streets; security; public facilities; shopping and services; leisure and tourism; and

action activities and marketing. The scores for each topic are proposed to be

summed to provide an overall score which can be expressed as a percentage of the

maximum possible.

5.29 The above are illustrations of different approaches identified by the ATCM as having

a potential role. Others were published in different guides by the ATCM in the 1997

“About Town” report and 1999 “Key Performance Indicators”. The latter identifies a

potential of 60 indicators under four broad headings (regional, town centre health,

town centre progress and optional town centre specific indicators) of which 24 are

seen as core. The main indicators are listed below:

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ACTM – Key Performance Indicators

Vitality and Viability - Main Indicators

Regional Health • Population demographics • Employment • Industrial structure

City centre progress

• Visits to town centre • Car parking • Public transport • Crime, safety and security • Variety and offer • Public facilities • Street maintenance and cleanliness • Facilities for special needs • Town centre management activity

City centre health

• Retail vacancy • Retail performance • Retail sales

Optional city specific indicators

• Tourism • Evening economy

5.30 Within each category a set of indicators is suggested comprising essential and

optional indicators. Guidance is also offered on how the data might be collected

(including possible commercial sources), together with a brief example of how the

data might be used. The report is practical in nature, emphasises the importance of

time series quantitative data and advises that data does not need to be collected on

all of the indicators. We are advised by the ATCM that the report has not been

subsequently updated with additional research.

Historic Burghs Association Scotland

5.31 In their studies of 1997 and 1998 (“Health of Historic Towns” and “Small Towns

Study” ) the HBA used a range of sources including consumer surveys and surveys

of businesses as well as secondary data sources to build up information on what

were considered to be key indicators relevant to small towns in Scotland and the Isle

of Man. The V&V indicators used are set out as follows.

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Historic Burghs Association (1997, 1998)


Key Indicators

• Pedestrian flow • Retail floorspace • Retailer representation (esp multiples) • Space in use • Change in users (from earlier surveys) • Financial performance (prime rents; investment data – if available; growth in RV;

retailer performance; expenditure levels of shoppers) • Customer attitudes (from surveys)

Detailed indicators

Retailing indicators • Total retail floorspace (reflecting the size and importance of the town); • The change in total retail floorspace (over a 10 year period) • Comparison retail floorspace (expressed as a percentage of total retail

floorspace) – reflects the strength of the retail offer, as does number of multiple retailers

• Vacancy rates (expressed as a percentage of the number of shops in the town); • Retailer demand (expressed as a percentage of total retail floorspace); • Rental levels (for the main shopping street, expressed as a Zone A rent); • Pedestrian flows (shown as the peak for the main shopping street); • Customer attitudes – to retailing, from on-street or telephone surveys; Property indicators • Rental Growth – justification for investing in property; • Yields – reflecting the popularity of a location for investment purposes, in turn

reflecting expectation of rental growth; • Total return – combination of rental and capital growth, or decline to assess

investment performance;

Diversity indicators • Resident population of the town centre; • Working population of the town centre; • Number of tourist visitors – derived from visitor surveys or recorded statistics; • Visitor attitudes; • Environmental scoring – using a range of factors including street condition,

building condition, cleanliness, lighting and safety and crime statistics, ranked as good, fair or poor.

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John England

5.32 England (1999) was concerned primarily with the role of V&V indicators to assess

whether the impact from a proposed retail development would, or would not be

significant. A key thrust to his work was the scoring of factors on a 5 point scale (1=

poor and 5= very good) and then averaging these to provide an overall indicator of

vitality and viability. The factors used are summarised below.

John England (1999)


Indicator Diversity of Uses Retailer representation Vacant properties Commercial performance Pedestrian flows Accessibility Customer views and behaviour Safety and security Environmental quality

Factor No. and range of shops; services; businesses and offices; pubs and clubs; professional services; cultural attractions; sports and leisure Multiples; specialist/independents; market; food shopping; enclosed shopping; opening hours; recent investment by retailers; retailer demand; charity shops;’ low quality discount shops Vacancy rate; vacant floorspace; effects on centre Rental values; yield Volume of pedestrian flow Ease of movement for pedestrians, cyclists, public transport, car and less mobile; pedestrian environment; car parking; quality of public transport; Satisfaction with centre; improvements needed; leakage of trade Feeling of security; perceived safety in evenings; CCTV Physical appearance; cleanliness; building quality; open spaces/landscaping; toilets

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Practice in Planning Authorities

5.33 There is some evidence that, notwithstanding the guidance since the mid 1990s

contained in both NPPG8 and PPG6, there is limited application of TCHCs and

collection of data on V&Vs in both England and Scotland. The CBRE Review of

NPPG8 (SE, 2004) commented that “it was noted from the study that there is a low

level of activity in relation to town centre strategies and vitality and viability studies”

(SE, 2004, p116). In 2000 despite there being strong support for the use of TCHCs

in principle, Cox et al reported that, in England and Wales “most authorities do not

monitor the whole set of PPG6 health check indicators on a regular basis” (CASA,

2000). The usual reason claimed for this is the lack of resources available for

undertaking this work. The following table sets out the frequency with which

indicators are collected from the survey undertaken in this study.

V&V Indicators – Data Collected by LPAs Initially and Proposals to Update Information - from Cox et al (CASA 2000)

USA and Canada

5.34 Some information on practice in the USA is provided by Balsas (2004). At the

national level he notes that the National Trust for Historic Preservation publishes

national reinvestment statistics and collects annual information on 16 indicators listed

below based on seeking information on changes from the previous and earlier years

as part of the “Main Street programme”.

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Main Street Programme Indicators (NTHP)

Indicators

• Ground floor retail sales • Property values • Upper floor occupancy rates • No. of restaurants • No. of personal service businesses • No. of location-neutral businesses • No. of “mom and pop” businesses • No. of chain stores • Retail sales volume • Ground floor occupancy rates • No. of retail businesses • No. of professional units • No. of housing units • No. of businesses with websites • No. of franchise businesses • Attendance at special events and festivals

5.35 At a local level, Tyler (Evaluating the Health of Downtowns, 1998) developed an

index which enables other factors to be considered in order to evaluate regeneration.

Termed the Health Perception Index (HPI), the indicators are listed below:-

Health Perception Index (Tyler)

Indicators

• Good mix of stores and businesses • Active merchants’ association • Overall retail sales • Occupancy of storefronts • Nice-looking streetscape • Co-operation of banks • Parking • Low crime rate • Population growth in the area • Downtown has identifiable landmarks • Browsing shopping opportunities • Co-operation and activity of city government • Buildings restored to historical character

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• Occupancy of upper floors • Quick-stop shopping opportunities • Number of tourists drawn to downtown • Favourable local job situation • Downtown serves as a cultural centre for the community • Local political situation

5.36 In Canada, the city of Kitchener measures vitality and viability using four main areas:

housing, visitors, physical environment and community development (Balsas 2004).

Key indicators used in Kitchener are:

City of Kitchener, Canada


• New housing development • Vacancy and residential redevelopment • Hotel occupancy rates • Downtown construction values • Business activity • Number of employees downtown • Value of façade / interior loan property improvements • Population • Attendance at downtown meetings • Short term parking revenues • Street-front retail vacancy • Vacancy and commercial redevelopment • Monthly parking revenues • Community development initiatives

Role of Single Indicators

5.37 In the literature review it is evident that certain commentators have placed weight on

the role of single indicators for vitality and viability of centres as a whole. A range of

factors need to be considered to enable one to provide a single index:

• The mechanism used to allow the comparison of different indicators which are

measured using different units (e.g. pedestrian flow – peds/hour, compared to

rents in £psf).

• The weight attached to individual indicators.

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• The method of providing the overall score – how to draw the individual indices

together.

5.38 The first problem is typically dealt with through the use of simple point scales (e.g. as

seen in England 1999, LPAC 1996 and URBED-DOE 1994). There is some variation

between the use of 3 point and 5 point scales but the approach is, in essence the

same. As Cox et al (CASA, 2000) point out the reduction of measures into single

indices tends to result in the loss of meaning in relation to town centre health. They

argue that vitality in particular is a nebulous concept that is requires “joined up”

consideration and evaluation and “measuring indicators (especially qualitative ones)

is no substitute for quality evaluation and this is one area in which current practice is

sometimes weak”.

5.39 One interesting variation to this is the use of “benchmarked indexation” used by

Ravenscroft (1999) when he analysed changes in vitality and viability indicators in

different parts of Reading town centre. Ravenscroft identified a series of indicators

for each location at different time periods and expressed each as a percentage of the

maximum value recorded. The indicators that he considered using this method were

an index of yield, Zone A rents, pedestrian flow, numbers of comparison shops and

occupancy levels. In this way if street X had a footfall of 10,000 pedestrians per hour

but street Y only had 6,500 then X would have a value of 100% and Y 65%. Similarly

if, at a later date the footfall at X was 8,900 then its score would decline to 89%. The

same principle can be used for the full range of quantifiable measures. Ravenscroft

also provided an average score across the range of measures for the different

locations within the centre over time to analyse geographical changes within the

centre and found, for example, that the prime pitch within the town strengthened over

time in comparison to the remainder of the centre. This type of technique can, for

example, be applied between centres as well as within them provided the base data

measures are directly comparable.

Indices of V&V in the context of Retail Impact Assessment

5.40 Both England (1999) and Norris and Jones (1993) have favoured the use of single

indices of V&V to assist in the assessment of the significance of retail impact.

England’s approach (1999) is to score each one of the factors identified in his Town

Centre Health Check Appraisal Sheet (in total there are 42 factors) on a scale of 1 to

5 and to identify the average against all factors. This provides an overall score where

3 is an “average” indicator of vitality and viability. To allow for differences between

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sizes of centres he suggests that, in identifying the appropriate score regard should

be had to the size of the centre under consideration.

5.41 The approach has not been the subject of reviews by others in the literature.

However it is clear that the approach has severe weaknesses:

• The scoring of factors is inherently subjective – different observes (with different

experience of towns elsewhere) are likely to provide different scores (this was a

criticism of the scoring system used by URBED in their 1994 report).

• Although the system appears at face value not to weight different aspects of

centres in fact weighting is implicit in the number of factors used for measuring

different aspects of a town centre’s V&V. For example there are 8 factors

dealing with accessibility but only 2 for commercial performance – because all

factors carry equal weight accessibility will have four times the influence on the

final score than will commercial performance. Some may consider this

weighting correct but the point is that differences in weighting will produce

different results.

• In the context of reviewing the impact of retail proposals, aggregation into a

single index does not assist. For example if there is a proposal for food retail

out of centre this will have a direct impact on the trading levels of food shops

within the centre. It is essential, in understanding the significance of impact,

both the strength or otherwise of the food sector (to assess the degree to which

it can withstand competition) and also the importance of the food sector within

the centre to assess the broader significance of the impact. An aggregated

score does not assist in this assessment – indeed it will mask key issues that

require to be considered in the appraisal.

5.42 Norris and Jones (1993) favoured the use of a single index of vitality and viability

although the precise mechanism proposed was not identified – they suggest that a

single index could draw upon a series of indicators which reflect the relative health of

centres and can be developed further using either a ranking or weighting system.

They recognise that the use of different indicators requires the reduction of measures

to a common basis of measurement (similar in concept to England’s 5 point scale)

but consider that this should be based upon interviews with retailers, developers or

investors in gauging their reaction to potential new retail competition.

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Overall Indices of Viability

5.43 It is also appropriate to note that certain commercial organisations produce and sell

their own aggregate measures of viability. Whilst these have severe limitations in

assessing the vitality and viability of a centre in isolation (as discussed below), they

can assist in providing supplementary analysis/benchmarking of a centre in support

of the wider TCHC process if properly used and interpreted.

Investment Property Databank – IPD

5.44 The IPD provides a “total return measure” which includes both capital value changes

for property and rental income and this is used to provide overall measures for

centres which can be compared over time and between centres. There are two key

limitations to its value: first that it covers investment property only (at present it claims

to cover 45% of the UK investment market within its appraisal) but this will ignore the

majority of property in all but the largest centres; and second that it is focused on

commercial property indicators and not the wide range of issues addressed in most

TCHCs.

Management Horizons Europe – MHE

5.45 MHE produces a shopping index which ranks 1672 locations in the UK. Rankings are

based on a weighted scoring system which takes into account non-food multiple

retailers and anchor stores present in each centre. This index therefore emphasies

the retail strength of the centre for example in 2003/04 Alloa was ranked 829th

compared to 620th in 1995/96. Again the index covers only a limited range of the

V&V indicators identified in most TCHCs.

Others: Experian and Promis

5.46 Another comparable approach is used by Experian in its retail rankings assessment

which provides a rank, in retail terms, for principal town and city centres (e.g.

Aberdeen was ranked 30th in the UK in 2004 and 35th in 2002). The Experian ranking

is based on a series of variables: national multiples; comparison retailers; floorspace

occupied by multiples; vacancy rates; “retail density”; key retail occupiers and total

number of shops.

5.47 Promis provide rankings for centres according to different types of retail sector

including floorspace, fashion retail, anchor stores and overall retail provision.

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Town Centre Health Check Process

5.48 Before considering detailed issues about each of the relevant, and potentially

relevant, vitality and viability indicators it is important to consider the role of the TCHC

process as a whole and its benefits to the planning authorities and others. This was

specifically addressed in the work Cox at al (CASA, 2000) who undertook a survey of

planning authorities about the scope, content and usefulness of TCHCs as a tool for

planning for town centres.

5.49 In their survey they reported that the use of a TCHC was given overwhelming support

by respondents. In many cases health checks were considered to have stimulated

systematic data collection. Notwithstanding this there were concerns about the

process, particularly in relation to:

• The cost of conducting Health Checks (although two thirds did consider that

they represented value for money);

• There was a need for clarity in the advice for certain V&V indicators;

• There was a concern about how data should be interpreted. Only a small

proportion considered that the advice contained in PPG6 was “clear and

helpful”.

5.50 In their review Cox et al make the following conclusions:

“The town centre health check is an important aid to understanding the town centre,

for supporting planning practice and local decision making. There was universal

support for the health check amongst the local authorities interviewed in this

research.

“Nationally, the health check procedure holds out the promise of delivering standard

data across town centres in the UK, so long as the results are widely disseminated.

A number of significant issues are hampering development of the best practice model

envisaged in PPG6 and Vital and Viable Town Centres. These issues relate

principally to data, interpretation and health check resourcing.” (CASA, 2000 p55)

5.51 These conclusions are consistent with the view of Sparks (SE, 1998) that “all towns in

Scotland should undertake detailed regular health checks to an agreed format and

incorporate these into their planning and marketing processes”.

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5.52 Cox et al (CASA 2000) identify that TCHCs do need to address a number of general

issues relating to practice:

• The number and range of health check indicators is too great for some local

authorities to manage, especially where there is no history of systematic data

collection and where resources are stretched.

• The usefulness of indicators varies by size of town - not all of the PPG6

indicators are relevant or easy to interpret in market towns and other small

centres.

• As policy guidance has not generally prioritised indicators, efforts are frequently

targeted at the most easily collectable data - not necessarily the most useful –

because resources are constrained.

• Health check resourcing is not addressed in PPG6 but is a significant (and

perhaps the key) practical issue for most local authorities.

• Access to information by stakeholders in town centres is unequal. Resource

constraints in the public sector, at a time of significant investment in information

resources in the private sector, means that the gap between planners and

investors in terms of their access to information and expertise is now very wide.

Lack of staff and money are not the only factors that have limited the development of

health checks. Lack of broad experience, of mechanisms for sharing knowledge and

expertise beyond local areas, together with under-investment in IT systems and

training also appear to have held back collection of health check data in some

instances.

(CASA, 2000 p55-6)

5.53 They also identify that data management practice is far from consistent. Specific

issues regarding the data are:

• Indicators are not always defined consistently or explicitly, which makes

comparisons over time and between places difficult. Problems of definition apply

both to measurement units and spatial areas, which are highly variable in the

health checks reviewed.

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• Definitional issues are compounded when different indicators are used together

to create descriptive statistics – the most usual being vacancy rates which are

often compared between places but may relate to very different definitions of the

‘town centre’.

• There is a lack of good quality time-series data, collected at regular and equal

intervals. Poor documentation of data collection methods has hampered efforts

in some cases, as has the absence of IT skills and protocols. Changes in the

PPG6 ‘list’ have the potential to compound this problem.

• There is no common practice for the selection of towns and data for comparison.

As with the indicators themselves, the selection of comparative data may be

driven by availability rather than usefulness in some instances. (CASA, 2000

p56-7)


5.54 This section addresses specific comments and views on the role of individual

indicators. This considers the following:

• Indicators that are identified in SPP8 and PPS6;

• Additional indicators that could be included within TCHCs;

• The role of “core” or “key” indicators; and

• Summary comments.

Pedestrian Flow

5.55 URBED (DOE, 1994) identified this as one of two key indicators. They considered

that this was a measure of vitality and not viability and they confirmed the widely

accepted position that, to be useful, there must be a number of counts taken at

different locations at times in the day and evening. Some surveys can be obtained

from Property Market Research Services available through Experian Goad.

5.56 In their review of practice Cox et al (CASA, 2000) note that the methods used are

rarely stated in TCHCs and there is significant variation in the number of counts.

Local Authority own counts are the most common source but surveys are also

undertaken by consultants and by shopping centre owners/managers. Survey

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locations are typically primary and secondary streets and also at significant public

transport interchange points (e.g. Kirklees MC, 1999 or GM Research, 1999).

5.57 It is reported (CASA, 2000) that pedestrian flow was regarded as one of the most

useful indicators but the cost of collection means that this is not reflected in the

number of authorities collecting the data.

5.58 Healey and Baker (1995) criticised pedestrian flow on the basis that it is not capable

of direct translation into shoppers and potential retail trade and they comment that

“flow must be…analysed in order to establish whether or not the flow is supportive of

retailing”. This comment appears to be somewhat “retail-centric” in that pedestrian

flow is concerned with broader issues about the liveliness and activity within a centre

rather than simply potential shoppers.

5.59 A significant issue which is not picked up in the literature relates to the method of

measurement and the focus on flow. Unfortunately we have not be able to obtain the

original reference but work in the 1970s/80s for the TRRL identified a method for

measuring pedestrians based on the density of pedestrians along a route. The point

is that for pedestrians to be contributing to vitality they do not necessarily have to be

moving, or moving quickly. For example areas which are particularly attractive (e.g.

town squares, attractive shop fronts or where there is street entertainment) may

result in pedestrians gathering but not, necessarily, moving in great volume.

Measures of pedestrians densities could be considered to complement measures of

flow.

Yield and Investment

5.60 The role of yield as a V&V indicator has been the subject of considerable discussion.

URBED (DOE, 1994) identified this as a key indicator whereas Healey & Baker

(1995) have strongly criticised its role as an indicator. Current government guidance

urges caution in the interpretation of yield information. The initial justification for yield

is that it is an indicator of investor confidence in a location. In effect yield is

traditionally described as an indicator of the expectation of rental growth in a property

although clearly it also reflects the security of income (if there is a secure and reliable

tenant – i.e. with a strong “covenant” – this will encourage lower yields than one who

is neither of these things). URBED encourage the collection of information on yields

for both primary and secondary locations.

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5.61 The basic logic for and health warnings needed for considering yield are set out by

the DOE:

“Yield is a measure of property value. It is the ratio of rental income to capital

value and is expressed in terms of open market rents as a percentage of the

capital value.

“The volume of transactions is small relative to the number of properties, so

the interpretation of evidence by the valuer necessarily includes an element of

judgement. The shop investment market uses yield of a modern standard

sized shop unit in the highest rented position in the town centre (prime yield)

as its standard.

“factors which influence yield are complex and need to be interpreted with

reference to circumstances in each individual town. ….It needs to be used

with care and should be compared over time and locations”

5.62 Jackson (2006) writing from a property investment perspective places weight on

information relating to investment which would include yields. His view is that

“investment by institutions dominates town centre property investment and,

consequently, investor movements can have a huge positive or negative effect

impacting on the vitality and viability of an area” and “investment is identified as

holding the key to longer term economic viability” (Jackson 2000). Jackson’s

assertions are probably true for larger centres but for smaller market towns and

district centres the levels of institutional investment can be quite limited with centres

dominated by owner occupiers or private investors.

5.63 Sources relate specifically to transactional evidence and, in smaller centres, such

evidence may be limited or provided through the District Valuer/Valuation Office (e.g.

Kirklees or GM Research both 1999) or, for larger centres sources such as RICS,

IPD etc.

5.64 Cox et al (CASA 2000) report that, from the perspective of planning authorities, yields

were neither frequently collected nor felt to be especially useful. Cox et al argue that,

given the difficulties in obtaining and interpreting yield data, especially in smaller

towns, yield should not be a core indicator of V&V.

5.65 Criticisms of the use of yield include the following:

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• Yield is really a reflection of macro-economic circumstances (Stockdale, 1993).

Stockdale argues that rental levels and the performance of town centre retailers

are much better indicators.

• Confusion over which yield measure to use – initial market yield, best market

yield, equivalent yield etc (CASA, 2000)

• Yield relates to the specific circumstances of an individual property and an

individual investor’s circumstances (e.g. options in other markets, costs of

money etc, whether a property is under-rented, perceived defects in the

occupational lease etc) (Healey and Baker, 1995).

• Yield is related to the size of a centre – normally larger retail centres tend to

have a lower yield than smaller ones. In response to this URBED (DOE, 1994)

recommended the use of a residual index of yield developed by Hillier Parker

which was able to discount the effect of size. However this has been criticised

and Cox et al (CASA 2000) consider that even if it is technically sound it is an

unrealistic method on practice – in the literature covered no individual or

authority has used this index.

• There are limited numbers of transactions – especially in smaller centres.

Rents

5.66 In accordance with government policy the principal measure used is Prime Zone A

which can be obtained from agents (including national surveys), District Valuer, RICS

(in some larger centres in Scotland) or possibly from council estates’ departments.

Cox et al (CASA, 2000) report that in a few cases rents in addition to Prime are

collected. In nearly all cases the focus is on retail rents although the LPAC/MOL also

collect levels of other commercial rents in centres. Healey & Baker (1995) suggested

that changes in rental levels compared with other similar centres would be a useful

indicator although this must still be treated with some caution

Retailer Demand

5.67 Healey and Baker (1995) consider this to be a useful indicator. The focus is primarily

on the role of expressions of interest by multiples but this frequently reflects national

rather than local market conditions and, as Healey & Baker point out there is not

always the intention of multiples to invest in accordance with their expressed

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locational preferences (e.g. they could use these as signals to the market for

potential space and then pick and choose between potential sites subject to overall

budgets and expansion targets). Conversely it is more difficult to identify demand

from independents and local occupiers – in smaller town centres these occupiers can

dominate the market.

5.68 A traditional source for this information for multiples at least is the use of databases

such as Focus or through an enquiry of commercial property agents. This is seen in

various retail studies undertaken on behalf of planning authorities (e.g. Angus Retail

Study by DTZ Pieda in 2003 or Fort William Retail Study by Rydens in 2006 – these

are just two examples of many in Scotland).

Retailer Representation

5.69 Retailer representation is easily measured from surveys of centres. Typically studies

identify different types of retailer including multiple traders, categories of traders

(such as the Goad classifications), anchor stores, department stores and, normally as

a negative indicator, the role of charity shops and discount stores.

5.70 Factors that are measured under this heading include the following:

• Total numbers of and changes in the number of national multiples. Reference is

frequently made in RIAs to numbers of multiples identified in Goad reports

(although care is needed since the national average figures referred to in Goad

relate only to those centres that are the subject of Goad reports – this excludes

most smaller towns and centres in Scotland). An important issue here is what

defines a “multiple” trader – various definitions are used e.g. Cox et al identify a

range of definitions used (CASA 2000).

• The role of independent and specialist shops that can add to the diversity within

a centre and distinctiveness from other centres. For example Roger Tym &

Ptnrs (FSBS, 2006) seek to encourage independent shops in centres and

Benison et al (2004) also raise the importance of independents supporting town

centre diversity.

• The role of markets/farmers markets – including covered markets. These can

add to diversity and the number of occupied stalls and/or days trading is

frequently identified.

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5.71 The issue of charity shops and discount shops as negative factors needs some

consideration. In the literature where views are expressed both of these are

considered to be negative. One example is England (1999) who states “charity

shops, for example, should be regarded as a negative factor because it suggests that

a centre is unable to support a full range of viable outlets paying market rents.

Charity shops reflect concealed vacancies”. In the sense that charity shops are

typically associated with generally lower levels of turnover and footfall they can be

seen to adversely affect both vitality and viability of centres. However the cost basis

of charity shops does need to be considered and it is the lack of a cost base (in terms

of staff costs and donated goods for sale) that allows these operations to be able to

compete with conventional retailers in all but the strongest retail locations (cf

Shandwick Place in Edinburgh) and they are not necessarily a sign of market

weakness.

5.72 The case against discount shops is even more difficult to justify. Discount shops are

often associated with high turnover and therefore can contribute to both vitality and

viability. Indeed there is little difference between “pound bazaars” or remainder book

shops and other retailers such as Poundstretcher or Savers (which could equally be

categorised as “multiples”). The case against discounters in terms of vitality and

viability may be more a symptom of under valuing the benefit that these types of

shops have for those on more limited incomes or, indeed, those who place value on

lower cost retail goods.

Space in Use and Diversity of Use

5.73 Cox et al (CASA, 2000) in their survey of authorities identified that the data for

different uses tends to follow conventions established in individual local authorities

with units of measure including numbers of units and/or area. Typically uses are

defined according to the Use Classes Order, broad retail categories (convenience,

general comparison, bulky goods and services) or Experian Goad although the first of

these does present some difficulties in the interpretation of retail uses. In some

cases use is made of GIS and plotting of uses (e.g., Aberdeenshire identify all retail

units on base plans and utilise an Access database naming units, type of

retail/service and floor area).

5.74 LAs tend to use their own surveys – often in association with the Regional Assessor

but consultants typically rely on Experian Goad surveys (limited to larger centres

only) and own surveys of numbers of units.

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5.75 Healey and Baker (1995) emphasise that this indicator or set of indicators is most

useful when it provides data over a time period and/or in comparison with other

centres to allow one to examine the relative position of the town centre in the wider

network of centres/hierarchy. They are critical of the measure of diversity which they

consider to be of “marginal assistance” in measuring vitality and viability as changes

in land use occur for reasons other than the vitality and viability of a centre. Retailer

representation and profile are also considered to be of little assistance, providing an

indication of the town’s current status in relation to other centres and its apparent

position within the retail hierarchy. This analysis also ignores, generally, the existence

of independent retail in the town centre. Instead, they believe retailer demand and

intention to change representation is a far more useful indicator – although these are

sometimes difficult to gauge for confidentiality reasons or where requirements are

listed for multiple towns, some of which the retailer has no genuine intention of

locating to.

Vacancies

5.76 Vacancies appear to be the most commonly collected V&V indicator. The type of

information is usually simply the proportion of street level property that is not in

occupation – typically measured as either number of units and/or floorspace (for

example Goad surveys estimate both). The most common source for data used by

planning authorities is on-street survey and, for floor area using own

records/Regional Assessor data. For larger centres many consultants use Experian

Goad centre reports as a key data source.

5.77 Cox et al (CASA, 2000) identify that, in their survey, local authorities consider that

vacancies are the “most useful” of vitality and viability indicators.

5.78 Issues that have been raised in association with the measurement of vacancies

include the following:

• There is a significant difference between vacant space that has recently been

developed (and therefore not yet occupied for the first time) or is currently under

construction or refurbishment. These types of vacant space can be regarded as

positive indicators of investment rather than negative influences on vitality or

viability (although during construction there will be short term disruptive effects

on the local area). Cox at al (CASA 2000) also notes it would also assist to

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identify property which is being actively marketed (presence of agents’ board) or

available as opposed to that which is not.

• A key issue that not only relates to vacancy rates but also to other indicators is

the area included within the survey – i.e. that which is included within the

defined town centre. Vacancy rates in secondary pitches are nearly always

higher than prime locations – if a centre is drawn tightly around the prime retail

pitches the proportion of vacancies is likely to be lower than a centre with a

more widely drawn boundary – even if the level of vacancies in all areas is

comparable. In part to address this problem some authorities (e.g. Greater

Manchester Research unit, 1999) identify vacancies levels in both primary and

secondary pitches.

5.79 Notwithstanding the support for vacancies as a V&V indicator by planning authorities,

Healey and Baker (1995) considered that their use was “fraught with difficulties”

because: (i) there is no universally accepted method of defining the primary shopping

frontage; (ii) there is uncertainty as what to measure - % of units, % of area or % of

length of frontage; (iii)uncertainty about how to treat space that is let but not

occupied; and (iv) consideration should be given to the reason for vacancy – in many

cases this may reflect the circumstances of a retailer rather than the town (however –

it will be significant if a town has high vacancies because it has an above average

dependency on retailers that have faced difficulties). Despite this Healey & Baker do

recommend that vacancy information should be collected but there should be a

preferred method of measurement – their preference is the percentage of space

within the prime frontage (their least favoured is the percentage of number of units).

Accessibility

5.80 Information on accessibility can cover a wide range of issues including accessibility to

a centre (by all transport modes) and also accessibility within a centre – i.e. between

transport entry points (including car parks) and shopping areas, between shopping,

civic, cultural and leisure areas/uses within a centre. There are, therefore, a wide

range of factors that can be measured under this heading. In London the current

TCHC proforma identifies that public transport accessibility is dealt with by a separate

survey issued through Transport for London but, even apart from this information is

sought on the following:

• Car parking provision (6 categories identified)

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• Information about Shop Mobility schemes

• Cycle parking facilities

• Pedestrian flow information

5.81 In Kirklees information has been collected on:

• Bus provision – identifying destinations and frequency of services

• Trains - identifying destinations and frequency of services

• Taxis – numbers licensed, location of stands

• Levels of transport use derived from the shopping survey

• Car parking provision (on- and off-street)

• Access for the disabled – including percentage of retail/leisure units with level

access

5.82 In 2000 Cox et al (CASA 2000) observed that, from their survey, although information

on accessibility was collected in the majority of instances, there was little common

practice. Data sources were mixed and range from returns from LA car park ticket

machines, transport surveys from Highways/Roads departments, customer surveys

and own audits of transport provision. In our review to date there has been no

attempt by any author to try to reduce the full range of accessibility indicators into a

single index. Indeed as Healey & Baker (1995) comment “many of the judgements

required to produce this index would be necessarily subjective”.

Environmental Quality

5.83 Environmental quality can also cover a wide range of issues ranging from litter and

cleanliness to landscaping, building condition, pedestrianisation to assessments of

overall ambience of a centre. Typically this is measured using a scoring exercise

with a wide variation (e.g. from three point scores, such as London, reflecting the use

of the second stage identified in the URBED report (DOE, 1994) through to 7-point

scales for 12 dimensions/indicators of environmental quality). This is normally

undertaken as an audit by Local Authorities, Town Centre Managers or consultants.

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Other Qualitative Factors

Crime and Safety

5.84 Typically the numbers of crime instances within a defined area are noted and by type

(i.e. car, premises or person) but they are normally based on Police divisions or beats

and not town centres. In smaller market towns this will typically include the whole

town rather than the town centre. The presence and extent of CCTV may also be

recorded.

5.85 The assessment of safety tends to reflect perceptions e.g. from surveys of

shoppers/visitors. Some (e.g. MoL, 2006) also identify recorded accidents

Customer Views and Behaviour: The Role of Surveys

5.86 Surveys of shoppers/visitors and also, to a lesser degree, of businesses are used as

an information source for a number of V&V indicators. In addition to these comments

on qualitative aspects of centres are often sought (e.g. naming and/or ranking a

range of positive and negative aspects of centres). In certain cases household

surveys (to include the views of non-attenders to a centre living within the catchment

– i.e. to assess why they do not use a centre) are also undertaken. Sample sizes

vary from as few as 50 interviews to thousands of interviews (especially if household

based).

5.87 In addition to surveys of shoppers or customers some commentators and authorities

also use surveys of businesses for a range of inputs for measuring indicators. The

“Lockwood” survey (Urban management Initiatives 1997-2002) is notable in that it

used interviews with managers of multiple retailers within centres covering a range of

views of factors relating to town centres including employment change, competition

from other locations, pedestrianisation and levels of investment in centres. A key

element of the survey related to changes in turnover for the multiple businesses.

This survey had the support of key retailers which provided access to commercial

data that otherwise is rarely available.

5.88 In their review of NPPG8 CBRE consider that qualitative aspects of household

shopping habits are increasingly important and they support the use of surveys:

“regular surveys can reveal details of shoppers’ attitudes towards retail offer in the

existing centres, the depth and range of goods, the level of ancillary services and

other key factors which affect the quality of the centre, such as car parking provision,

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environment and other factors.” (SE, 2004 para 7.44). This approach is also

recommended by Roger Tym & Ptnrs (FSBS, 2006).

Other Recommended Indicators of V&V

5.89 A range of additional indicators have been identified that assist in assessing a town

centre’s vitality and viability. Those identified by Cox et al in a survey of authorities

are others in the literature are summarised in the following table.

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Additional Vitality and Viability Indicators

Identified by LAs Cox et al Survey (CASA 2000)

• Retail turnover • Residential • Leisure/night time economy • Transport* • Change of use (out of retail)* • Investment – quality of buildings/refurbishment* • Office floorspace • Demographics • Indicator of town’s role in hierarchy • Rateable values • Shopmobility take-up • Air Quality

Others identified in Literature

• Retail turnover index for businesses (i.e. % change in turnover from base) – Tomalin 1997

• Turnover/sales densities – Morrison et al (2000) • Presence of Town Management Scheme etc – Morrison et al (2000); MoL 2006;

ODPM 2004 • Comparison of turnover in centre and catchment as a whole – Kirklees 1999 • Nature and extent of retail competition – Kirklees 1999 • Retail employment – Kirklees 1999; MoL 2006; • Development opportunity sites – Kirklees 1999 • Hours of opening/Sunday opening – MoL 2006 • Consented schemes – MoL 2006 • Retail capacity study – MoL 2006 • Upper floor vacancies – ODPM 2004 • Retailer confidence – ODPM 2004 • External competition from other centres – ODPM 2004

Note: It is considered that factors indicated with * would be included within the list of

indicators identified in SPP8/PPS6

5.90 The above list is not exhaustive but is indicative of the range of issues that are

actively collected as part of TCHCs in the UK.

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“Core” or “Key” Indicators

5.91 Some debate has focussed on which (if any) V&V indicators should be considered as

core or key importance and, by implication, resources should be directed to collecting

these in the first instance. This stems from the advice contained in the URBED report

(DOE, 1994) which identified both Pedestrian flows and yield as the two “key”

indicators. Tomalin (1997) argued that “core” health check indicators should be

comparable between towns (to allow benchmarking). She suggested that these

could include retail rental change, pedestrian flows or vacancy rates. Cox et al

(CASA 2000) also sought to investigate the indicators being collected as a basis for

suggesting a possible set of national “core” indicators and to identify how data is

being collected, processed and analysed and to draw from this suggestions of good

practice.

5.92 In identifying which indicators (if any) should be core/key it is important to establish

the purpose for which TCHCs and V&V indicators are being collected. This will vary

between authorities, town centre managers and consultants and could include the

following:

• Preparation of baseline data and changes with a view to the development of

town centre strategies or actions/initiatives through town centre managers – it is

possible that, in this case, perceptions of stakeholders and households could be

more important than quantitative indicators.

• Data to support analysis for the development of development plan policy – in

this case a range of different indicators may be necessary.

• Analysis to assess the susceptibility of centres to adverse impact from

competing developments – this could focus on clearly measurable indicators

that can be compared with data over time and between centres.

5.93 Another key factor will be the ease with which information can be collected.

5.94 In overall terms it is notable that Cox et al (CASA 2000) in their survey identified

indicators that local authorities considered to be most useful and the ease with which

information could be collected. Their principal findings were:

• Vacancy rates stood out as being “most useful” and most collected (perhaps

reflecting ease of collection);

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• Pedestrian flow also scored highly in terms of “usefulness” but was less

frequently collected I.e. it was desirable to have this information but that

practical considerations (cost) constrain collection.

• Other indicators identified as useful were diversity of uses, retail rents, retailer

representation and yields (though the latter by only one respondent!).

5.95 Their main conclusion was “though the consensus on what is useful is not especially

strong a broad division is nonetheless apparent between an emerging set of “core”,

primarily quantitative indicators, and the more qualitative aspects of town centres,

which might be considered to be supplementary. What is evident is that yields, which

were strongly favoured in earlier versions of PPG6, are neither frequently collected

nor felt to be especially useful”. They consider that the “core” indicators should be for

example: floorspace; vacancies; pedestrian flows; rents; and possibly the presence of

multiple retailers.

Summary and Concluding Points

5.96 Following the review of LAs and others involved in undertaking TCHCs Cox et al

(CASA 2000) made the following conclusions:

• V&V indicators are not clearly defined and the notion of “health” is vague;

• There needs to be more guidance on how to interpret the data, especially what

would qualify as “healthy” in different types of town and within the context of

national trends;

• Nationally provided benchmark data would be helpful; and

• Local Authorities do not have sufficient resources to fulfil the requirements of the

Health Check or even what they themselves want/need to monitor.

5.97 They identify a list of core V&V indicators which have been listed above. In addition

they identify a role for “locally derived vitality indicators”. They consider that vitality

indicators need to be addressed but that such information is generally “soft”

(qualitative) and they consider that this information is best identified as being “project

based” (i.e. in response to a clear local issue that allows the range of relevant factors

to be identified in “joined-up” analysis). This approach does not support the

systematic collection of this data over time in one authority or between authorities for

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the establishment of benchmarks. This conclusion does not sit easily with the

experience identified in the literature where certain planning authorities, having

invested significant resources, have produced data on a range of quantitative and

qualitative V&V indicators, over a period of time to establish trends in these indicators

for specific centres. The approach advocated may be relevant in the context of the

development of initiatives/TCS but it limits the type of information available and

analysis that can be undertaken for either development plan policy formulation or

assessing the impact of RIA on centres.

5.98 The conclusion above is also contrary to that of CB Hillier Parker in their review of

PPG6 for the ODPM (ODPM, 2004). Their conclusion was:

“Our consultation suggests that the indicators included at Figure 1 of PPG6 for

assessing the health of town centres are largely adequate but they should include a

long-term perspective…Additional indicators were suggested for consideration

….[and] ….it was also felt that it would be useful to benchmark the indicators with

other similar or neighbouring centres..” (ODPM, 2004 para 3.45)

Summary of Criticisms/Improvements to TCHCs and V&V Indicators

5.99 In the review so far a number of weaknesses and criticisms have been raised. This

section draws all the key criticisms and suggested improvements together. At the

outset it is worth noting the conclusion of Cox et al (2000) that, whilst health checks

are an important tool in town centre monitoring to support the local plan and

development control process, their full potential was not (at that time) being realised.

• Certain indicators are unclear and contradictory (Tomalin 1997).

• There is a need for a nationally consistent system of retail data collection to be

published at regular intervals (HoC Environment Committee, 1995).

• Others (e.g. CB Hillier Parker in ODPM, 1999) have argued that V&V

assessments as a whole should be undertaken on a regular and consistent

basis and this should be recognised in policy advice – in their view the pattern of

change over time is “crucial”.

• Measures of a number of the indicators are considered to be subjective

(Tomalin 1997; England 1999, Healey & Baker 1995) and therefore has a

potential lack of consistency in application (NRPF 2000).

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• The application of indicators to different sized centres is an important

consideration. Healey and Baker (1995) suggests that the approach adopted

may need to be varied depending on the size of the centre concerned, its

function in the shopping hierarchy and, more importantly, the purpose for which

the assessment is being made. This approach concurs with our own recent

experience of V&V assessments in England and the application of PPG6/PPS6.

A significant number of local authorities have sought to assess the full range of

PPS6 indicators for centres of all sizes, e.g. down to local and neighbourhood

centres, for which the information is either not readily available in a meaningful

way or directly relevant (e.g. assessment of yields, footfall and multiple retailer

representation). Further consideration therefore needs to be given to the

type/application of indicators relevant to smaller centres, particularly in the

context of the significant number of small towns throughout Scotland.

• There needs to be more guidance on how to interpret the data (CASA 2000) and

weight to be attached to different components (Tomalin 1997).

• Nationally provided benchmark data would be helpful (CASA 2000) – some

would go further and suggest that certain indicators are only useful when used

comparatively (Tomalin 1997). In this regard some argue that there should be a

national database of indicators which would support benchmarking of centres

(CASA 2000).

• There have also been calls for nationally based data sources that can feed into

TCHCs. This includes requests by the HoC Environment Committee (DOE,

1995) investigations by the DOE and subsequently the DETR to look at retail

statistics availability (see comment below).

• Cost/resource requirements for implementing the requirements of the Health

Check are high – particularly for local authorities (CASA 2000, England 1999).

The CASA report also recognises that, due to a lack of resources, some health

checks can become too focussed on those indicators which are the cheapest

and / or easiest to collect and analysing footfall in such a way is likely to

increase cost further.

• The degree to which information is actually shared between the public and

private sectors and between public sector agencies/partners. The lack of a

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standard model/approach makes it more difficult for authorities to share data

and disseminate best practice.

• In response to the difficulties of resource constraints Cox et al (CASA 2000)

recommends that public and private stakeholders in town centres can deliver

innovative solutions for data collection and monitoring within limited financial

resources and best practice solutions should be documented and shared – it

uses the idea of a Regional Development Agency website(s) aimed at allowing

the pooling of knowledge/ideas. A register of completed health checks is also

recommended to provide local authorities with town centre contacts, contents

pages of health check reports, details on data coverage and definitions, analysis

techniques, research, forums etc. The report states that town centre monitoring

might best be undertaken by town centre partnerships (including the private

sector, national and local investors and retailers) in order to generate innovation

and best practice

• In support of TCHCs it has been argued that surveys of town centre users and

retailers should be undertaken regularly (Roger Tym & Ptnrs - FSBS, 2006).

• The definition of town centre boundaries requires to be considered carefully. It

has been noted that different definitions can result in different measures of

vacancies due to the inclusion or exclusion of peripheral retail areas. URBED

(DOE, 1994) refer to the inclusion of both the central shopping core and

secondary areas. Others (Vision of London, 1995) emphasise the importance of

a consistent basis to be used and recommend the area within which the mix of

town centre uses take place within reasonable walking distance of car parks and

public transport (which would be more extensive than most Goad plans of

centres) – in other words the centre is not just a shopping centre.

• There is a concern about the absence of certain indicators in current guidance

that are increasingly considered relevant/important to the vitality and viability of

town centres – e.g. retail turnover, accessibility, quality of environment,

significance of non retail uses to the V&V of a centre (leisure, cultural/civic,

housing). Linked to this, insufficient emphasis is placed on non-retail uses (e.g.

leisure, civic etc) which particularly contribute to the vitality of a centre, and

wider issues such as accessibility and quality of the environment.

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• Uncertainty as to the validity of using historic indicators for prediction of future

trends.

• The need to balance quantitative assessment of a centre with qualitative

analysis.

• The need to accommodate local circumstances and issues, whilst also trying to

find an approach that can be compared between centres.

• Establishing what significance/weighting should be applied to specific indicators

and the potential role (if any) role for overall single measures of vitality and

viability.

5.100 It is apparent from this review that a key reference in the consideration of the TCHCs

and the role of V&V indicators was the work of Cox et al for the National Retail

Planning Forum. NRPF (CASA, 2000). It is, therefore, worth noting their specific

broad recommendations for practice:

• To convene a national town centre stakeholder group to review all aspects of

health check process, provision of core indicators, material to support

interpretation and the dissemination of expertise.

• To recruit a number of case study partnerships to explore processes and best

practice for handling local vitality indicators.

• To suggest a package of technical measures to support a national health check

process delivered as a best practice guide or resource.

• To suggest amendments, where necessary, to central Government advice on

the health check process.

5.101 Other proposals have been put forward to seek to address key issues for TCHCs.

These include the following:

• Creation of a central database of consistent information, e.g. recorded at a

national level for core indicators of V&V and updated through annual surveys

and greater access to commercially available information.

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• Increased co-operation between the public and private sectors and between

authorities on the exchange of information. The research to date suggests that

many cost/time effective health check assessments have been carried out as

partnerships between the public and private sector, enabling information to be

shared and parties engaged in the process.

• The use of town centre partnerships/BIDS/TCM to perform or assist in town

centre monitoring.

• Use of an index to score centres, taking into account a range of indicators (e.g.

Health Perception Index), although the difficulties associated with this approach

have also been highlighted.

• Assessment of Attractions, Accessibility, Amenity and Action in addition to

PPG6 indicators of V&V (in accordance with URBED 1994).

• Setting of objectives for the V&V assessment/health check, rather than specific

indicators (LPAC).

• Identifying key themes/categories for indicators with core and optional indicators

(ATCM).

• Assessing specific geographic areas of a centre over time (compared against

themselves and against the core retail area).

• Pooling of knowledge and ideas on V&V indicators/health checks to establish

best practice as opposed to being prescriptive on the indicators and their

interpretation (e.g. RDA websites and a register of completed health checks).

• Increased guidance on interpretation of indicators and clearer definitions.

5.102 The biggest challenges seem to be balancing flexibility to meet local circumstances

with a standard approach that provides consistency and enables meaningful

comparison between centres. In addition, issues of resourcing, both in terms of time

and money remain to be addressed.

In this regard the Client Group may wish to consider the extent to which

planning advice should support standardised approaches which can be

developed into national databases useful for benchmarking as opposed to

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locally designed TCHC schemes which may be better suited to support TCS

development.

Footnote: Data from SOCD/ACTA

5.103 The issues of the boundary of town centres and availability of statistics for input into

TCHCs are closely related. They have been the subject of specific research

undertaken by CASA on behalf of the ODPM initially reporting in 2000 (ODPM, 2000)

followed by a Pilot Study in London (ODPM, 2002). The conclusions of the latter

study indicated that a range of statistics incorporating employment and turnover data

from the ONS, and floorspace data from the VOA, could be collated for consistently

defined centres for London. The statistics were independently checked and verified

and “should be considered the best available at this current time” (ODPM, 2002).

5.104 This approach has been developed further and rolled out for the whole of England

through the English “State of the Cities Database” (SOCD) which includes data for

“Areas of Town Centre Activity” (ACTA). The following table sets out the range of

data provided through this database.

State of the Cities Database: England

Areas of Town centre activity (DCLG): http://www.socd.communities.gov.uk/socd

Areas of Town Centre Activity – datasets (2002 only available at present)

• Floorspace and Rateable Value for each of the following: o Bulk retail o Bulk office o A1 o A2 o A3

• Employment for each of the following o Civic o Convenience retail o Comparison retail o Services (retail) o Arts and culture o Restaurants o Commercial offices

Scope covers a wide range of centres – for example there are 64 ATCA identified in the East Midlands region ranging from Nottingham (>400k sq m GFA retail) to Towcester (5910 sq m retail) – in context the latter is smaller than Banchory (5247 sq m GFA – which is the 8th largest centre in Aberdeenshire by retail floorspace) and slightly larger than Turriff (4364 sq m – 9th largest in Ab’shire).

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6 Town Centre Strategies Current Policy Guidance on TCS

6.1 The current policy references on the role and preparation of Town Centre Strategies

contained in SPP8 and PPS6 are set out below.

SPP8

6.2 With specific reference to town centres and the preparation of town centre strategies

in Scotland, paragraphs 24-26 of SPP8 state:

“Actions to support improvements in town centres and to create distinctive

and successful places are encouraged. Improvements range from small scale

public realm works to assembly of larger scale development sites which aid

regeneration. Achievement of these improvements will require an

understanding of a centre’s individual strengths, as well as its role within the

wider network. Within this context, the use of town centre management

techniques is encouraged. Advice is included in PAN 59, Improving Town

Centres.”

“Town centre strategies are key to the delivery of such improvements. Within

the context provided by the statutory development plan, the strategies should

provide the more detailed framework which enables action to be realised.

Town centre strategies should be informed by up-to-date monitoring and

review of town centres, making use of health checks. To aid wider

understanding, a more consistent approach to strategy development should

be adopted. Each strategy should be developed in co-ordination with other

strategies, for example the community plan, and transport and economic

strategies, deriving maximum benefit from early involvement and joint working

with interested stakeholders. These will include: local communities;

representatives from both the public and private sectors (for example other

local authority departments and retailers, businesses and consultancies); and

voluntary organisations. This will enable development of proposals which

better reflect the priorities or the range of different interests.”

“The strategies should: indicate the capacity for change through

redevelopment, renewal, alternative uses and diversification based on an

analysis of the centre's role and function; consider the constraints to their

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implementation, for example diversity in site ownership, unit size and funding

availability; and recognise the rapidly changing nature of retail formats. They

should identify clear actions, tools and delivery mechanisms to overcome

these constraints, for example improved management, Business Improvement

Districts or the use of compulsory purchase powers. The strategy should then

promote new opportunities for development, using master planning and

design exercises taking account of historic and conservation considerations

where necessary. Early consideration of the potential to reduce impacts on

the environment is also encouraged, for example using sustainable urban

drainage systems and communal systems of combined heat and power.

Finally, it should include a monitoring exercise to link back to the health check

and to examine the extent to which it resulted in the actual delivery and

implementation of an improved town centre environment. Updated guidance

on town centre strategies will be published in the future in the form of a

Planning Advice Note.”

PAN 59 (1999)

6.3 PAN 59 was designed to be read in conjunction with NPPG8, to provide advice to

local authorities on how they might go about improving and changing their town

centres, drawing on Scottish Examples. It identifies possible items for action and the need for an inclusive, partnership approach to formulating and delivering town centre strategies. The PAN states;

6.4 “Much can be done to improve the vitality and viability of existing centres by taking

steps to build on their assets and resolve problems. To achieve their full potential,

town centres must, in particular, provide an environment that meets the requirements

of investors and retailers as well as the needs of users. In general, action will need to

be directed at:

• improving and building on the variety of attractions and the diversity of uses;

• making the centres more accessible for shoppers and visitors, as well as service

vehicles, while at the same time minimising vehicle/pedestrian conflict;

• ensuring that they are attractive, safe and clean; and

• undertaking effective planning, management and promotion.

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6.5 Any action should, however, not be undertaken in isolation. It must be part of a

strategic approach which considers the centre as a whole, which involves a realistic

vision for the centre, and which draws on the support and commitment of a wide

range of public and private sector bodies, as well as the public. The aim should be to

adopt an overall framework containing a targeted approach that secures the

necessary involvement of key partners. This may well result in the achievement of

added value and not just best value.

6.6 Achieving a better town centre will, therefore, depend on the formulation of practical

and committed partnerships, a good understanding of how the centre is performing,

and a widely accepted planning and strategic framework and effective town centre

management. In turn, this will involve improving what is on offer, maximising

accessibility, addressing appearance, crime and cleanliness issues, and taking action

to encourage development opportunities in town centres and to put agreed and firm

funding mechanisms in place.

6.7 A strategy and vision for the town centre can only be of real value if it is developed in

association with, and accepted by, all those with a key involvement with the centre.

This process should bring potential partners together to agree priorities and take joint

ownership and responsibility. It will involve the public sector (local authority, local

enterprise company, police etc), the private sector (developers, retailers, service

providers etc) and the local community and include:

• generating a shared and commonly held vision of the future of the centre;

• preparing an agreed strategy and realistic action plan drawing on adequate

funding; and

• setting up an active partnership body and management structure for

implementing the action plan and maintaining and enhancing the centre.

In practice, many partnerships are likely to start out as informal or ad hoc

arrangements. However, once initial contacts have been established and some

achievements made, there may be considerable benefits in terms of continuity,

commitment, and fund raising in developing more formal arrangements.”

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PPS6

6.8 The main guidance for England in relation to town centre strategies is included at

2.18 of PPS6. This states that “Town centre strategies can play an important and

complementary role in ensuring the continued vitality and viability of centres. They

may be part of the evidence base for development plan documents, including area

action plans and for supporting the use of compulsory purchase orders for site

assembly. Guidance on design and implementation tools will be published

separately. Planning Policy Statement 12: Local Development Frameworks (PPS12)

sets out the Government’s policy on the preparation of local development

frameworks.”

Research and Commentary on the Preparation of TCSs

6.9 Whilst much of the literature written about town centre strategies is location/town

centre specific and therefore of limited relevance for wider application, the following

sets out a summary of key themes and lessons arising from the literature review.

(i) Contents and process for the preparation of town centres strategies

6.10 The URBED Report “Vital and Viable Town Centres – Meeting the Challenge (DOE

1994) provides one of the most comprehensive commentaries on devising town

centre strategies in the face of strong competition from out-of-centre development

and other towns. The report identified that town centre strategies need to be more

than just simple land use plans and commence from a realistic understanding of the

town’s profile. The strategy should cover action plans for flagship and pilot projects

and should be focused on what makes the town special or differentiated from its

competitors. The report contains basic principles for good practice, related to the

scope and potential content of town centre strategies, which include:-

• Creating welcoming gateways – car parks, railway stations but also public

facilities including public toilets, mother and toddler changing facilities etc;

• Providing appropriate car parking;

• Making public transport a more attractive option;

• Designing quality streets – access requirements to be balanced with

considerations for pedestrian amenity and safety, traffic calming measures,

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linkages should be direct and as level as possible to ensure access to all,

appropriate choice of materials / landscaping;

• Ensuring a feeling of security – encouraging town centre living may help keep

streets busy and good urban design and policing can also help;

• Safeguarding key attractions – to maintain what the town already has, planners

should identify those occupiers considered to be key to the town’s vitality and

viability and work with them to ensure they remain;

• Encouraging diversity – more than just the retail element of the town centre; and

• The local authority survey carried out as part of the report sought to identify

programmes and actions being adopted or proposed as part of town centre

strategies and improvements. Over 30 types of programme were identified to

assist in revitalising a town (although it is acknowledged what is appropriate and

possible will depend on the individual circumstances) as follows.

ATTRACTIONS

A variety of multiple retailers

Good, friendly specialist shops

Town centre restaurants and cafes

Distinctive markets

Regular events

Education and health facilities

Cinemas, theatres, arts centres or cultural zones

Libraries and museums

Town centre housing

Offices and business centres

Public service facilities

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ACCESSIBILITY

o A comprehensive signing programme

o Safe, convenient car parks

o Pedestrian priority areas/traffic calming

o Mini-bus/rapid transit systems

o Public transport interchanges

o Access for all

o Distinctive gateways

o Bus priority measures

AMENITY

o Frequent cleaning

o Effective lighting

o Hard landscaping improvements

o Shop front/building refurbishments

o Temporary use of empty shops

o Crime prevention initiatives

o Removal of clutter

ACTION

o A strategic action programme

o Development partnerships

o Town centre management

o Regular monitoring.

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6.11 The most popular initiatives (adopted by over two-thirds of the local authorities) were

focused on “hygiene factors” – safe, convenient car parks, environmental

improvements, cleansing and pedestrian priority areas. By contrast, little over a third

had adopted measures to improve and create attractions (e.g. range of shops),

though these were more likely to have been adopted by vibrant, rather than declining,

centres.

6.12 The URBED research found that the most successful strategies and visions were

those that were realistic, matched to available opportunities and resources, positive in

the sense of providing a lead, and shared in the sense that people and organisations

with different interests were willing to support them. It went on to advise that

“success very much depends on reversing a negative image, and creating a climate

of confidence. This involves both some early wins or pilot projects as well as more

fundamental or flagship schemes.” It is argued that strategies are often ineffectual

because they either tackle only one aspect, e.g. environmental improvements, or

alternatively try to cover too much.

6.13 The report also highlights that “what successful places seem to have in common is

that they have gone through a process, often painful, out of which an agreed town

centre strategy has emerged, and this typically involves a number of stages.” The

key elements to these stages are summarised below;

6.14 Assessing the current performance and positioning of the centre is seen as essential

to devising an informed and appropriate strategy and clearly TCHC’s and V&V

indicators have a central role to play in this. The report recommends that profiles and

health checks are updated annually in centres that are considered to be at risk.

6.15 The second stage is then to review statistical and other information to provide a

profile of the town and its centre and how they are changing, together with a SWOT

analysis for each of the four elements of attractions, accessibility, amenity and action.

This should be undertaken with input from a range of public and private sector

interests, potentially through a Town Forum. The process may also involve further

research such as an environmental audit or surveys of important groups. Where new

development is proposed, further analysis may be required to assess the capacity of

the centre and the likely impact of new development.

6.16 A shared vision needs to be developed which is “practical and convincing, readily

comprehensible to encourage people to contribute and robust enough to survive in

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an uncertain world.” Input into the formulation of the vision by various parties is

essential to ensure that it is shared – the key is finding common interests on which

consensus can be built.

6.17 Strategies and action programmes need to be produced and published periodically to

attract resources and co-ordinate efforts. They require careful research and

negotiation. A strategy and action plan that has been commissioned by a group that

brings together different interest groups is more likely to be implemented than one

that emanates from a single department or authority. It is also essential to set a

timescale and identify the agency or people responsible for the delivery of specific

actions.

6.18 Dedicated management is seen as the final vital ingredient for ensuring vital and

viable centres, as encouraged by PPG6. Town Centre Management is seen as

having an important role in this, as a vehicle for the development and implementation

of a vision and strategy, although the choice of approach needs to reflect local

circumstances.

6.19 The URBED report goes on to provide commentary on specific issues related to

market towns, industrial towns, suburban centres, metropolitan centres and resorts

and historic towns, which raises considerations relevant to the formulation of

strategies for these types of centre.

6.20 The Vision for London Report – Revitalising London’s Town Centres (1996) involved

research into Town Centres across London, a major symposium and strategy

workshop. This resulted in wide ranging recommendations related to a good practice

guide, establishment of a London Town Centre Forum, pilot projects in London town

centres and the dissemination of more objective information. Although clearly

focused on London, a variety of the recommendations have parallels with the URBED

report (Nick Falk of URBED having been instrumental in both) that are worth

highlighting due to their wider relevance. These include the creation of a forum to tap

into local concerns, the importance of health check monitoring to identify

requirements of a centre and its wider context, the need for the local authority to be a

major player in the future of the town centre and its strategy, the use of vision

statements to set the stage for action plans to address problems and opportunities

and the need for a collaborative and interactive process.

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6.21 A wide range of potential initiatives are also proposed, linked to strengthening the

diversity of functions in a centre, quality of environment and accessibility. Themed

case studies are used to demonstrate the benefits of specific approaches such as

creating distinctive places (Croydon), making movement easier (Bromley),

harnessing cultural activity (Islington) and encouraging independent businesses

(Camden).

6.22 Donaldsons et al (1997) identified the following key elements to the successful

development of town centre strategies:

• Investment in the centre only represents value for money if it takes the town

forward on the basis of a strategy for the medium (2-5 years) and long term (5-

10 years plus).

• The strategy must involve assessing the strengths, weaknesses, opportunities

and threats for the town centre, which leads directly to priorities for action.

• A series of projects should be identified for action, who is responsible for

implementing them and sources of funding.

• Whilst the local authority should in most cased take a lead in developing the

strategy, the value can only be realised if it is accepted by key players in the

town.

• Joint responsibility is required between the key players for implementation (and

often funding), developed through consultation, working groups and action plans

for projects. The support of key parties in the town should be confirmed by a

written commitment from them.

• Proposals should be described in outline with a cost estimate, source of funding

and timetable set out.

• Selected KPI’s should be monitored on a continuous basis to measure

performance and test the effectiveness of the strategy. Pedestrian flows, shop

counts and car park usage are simple to collect and should be supplemented by

comparable data and benchmarking, together with the potential gathering of

retailer turnover information on an indexed basis for monitoring purposes.

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• The strategy should be subject to continuous review of its effectiveness and

relevance and although it covers a period of 5 years of more, should be revised

and relaunched at least every 2 years to confirm support and encourage

investors.

6.23 Baldock (1998) states that, as an essential first step, local authorities should

undertake a town centre audit in order to understand the issues and identify the

initiatives required. Following this, specific solutions can be formulated, culminating in

the preparation and implementation of an action plan for the town centre. Baldock

(1998) acknowledges that often there are no suitable in town sites and that frequently

appropriate development can only be created by assembling a site through CPO. It

is also acknowledged that improving town centres is rarely about a single issue and

instead requires a “building blocks” approach.

6.24 It is suggested that Councils should use their property assets in a town centre in a

more proactive way with income from council owned property assets reinvested back

into the town centre (e.g. into TCM initiatives). Councils should establish

partnerships and apply well-researched strategies to town centres in order to attract

(and retain) investment. Political will is also identified as being key to successful

delivery.

6.25 Subsequently, Baldock and Miller (Planning in London, 2000) identified the need for

increased collaboration between the public and private sectors in identifying

appropriate sites for retail development (as opposed to Local Authorities identifying

these in isolation through the local plan process), through the use of town centre

partnerships and Town Centre Strategies/Action Plans. The research indicated that

the majority of Local Authorities had prepared, or were in the process of preparing,

town centre strategies to include the identification of retail sites. The majority had

also produced development briefs, generally for town centre schemes, although local

authorities were not found to be very active in using CPO for site assembly.

6.26 The Small Towns Study (HBAS Research Paper No.3, Mitchell et Al 1999),

suggested that “the need to adopt a coherent strategic approach to identifying and

dealing with town centre issues is not restricted to the larger towns and cities but is

equally relevant to the needs of Small Towns. Town centre strategies established by

consensus, with a full range of local interests, offer a structure for dealing with the

issues affecting the towns against which individual projects can be identified,

prioritised, implemented and monitored.” The suggested approach is for towns to

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identify specific areas of strength which can be used as a basis for consolidation or

further growth, for example customer perceptions of smaller towns offering a clean,

safe and attractive environment, ease of access, diversity of uses and a focal point

for the local community. Equally, towns need to identify their weaknesses through

customer surveys in order to prioritise the key issues that should be addressed

through the strategy, for example high leakage of expenditure for comparison goods.

A realistic approach is however required in order to focus on those

aspects/weaknesses where prospects exist for improvement.

6.27 Drummond (2002) suggests a number of key points for local authorities and

regeneration companies promoting change, as follows;

• Involve stakeholders including owners, retailers, the community and industry

from the outset, prior to devising a strategy.

• Devise strategy before putting planning mechanisms in place. Set your goals

and develop a strong brief from the outset. Put planning mechanisms in place

quickly to promote what you want to promote and to deflect diversionary

alternatives. Stop playing planning policy catch up.

• Select the right development partners based on approach and compatibility, not

scheme and price.

• Recognise the importance of speed of delivery, but facilitate ample pre-

application time for consultation and masterplan preparation, and will help

streamline post application delivery.

• False starts waste time.

• Various planning aims, estates aims and political aims can be become distorted

by value concepts. Whilst value creation is fundamental to the financial players,

don’t get confused by what you are there for – i.e. the whole town, not just the

value of the development area.

6.28 The above points echo many of the issues raised by Donaldsons own experience in

preparing and implementing town centre strategies on behalf of local authority clients.

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6.29 Karski (2002) identifies a number of approaches to town centre regeneration being

adopted by the New Town Authorities in England, a significant number of which have

a wider relevance to other towns;

• Local authorities working at various levels of partnership with the Commission

for New Towns (CNT) and property owners to bring new life and business to the

towns (e.g. the creation of a regeneration partnership in Hatfield to bring forward

funding for major improvements).

• Adopting a holistic approach with improvements seen as part of a regeneration

strategy for the whole community in order to generate momentum and

ownership.

• Retail improvements are not considered in isolation, but as part of a jigsaw of

improvements which include leisure, residential and other town centre uses

alongside transport, urban design and TCM.

• Adopting a strategic and co-ordinated multi-sector approach including urban

planners, architects, businesses and politicians.

6.30 Jones et al (2004) acknowledges the importance of the physical appearance (in

terms of general quality of the environment, maintenance, management, graffiti and

vandalism etc.) of the town centre as a key way to create an attractive and inviting

shopping environment, particularly in small towns struggling to attract both

consumers and retailers alike. It is also noted that, whilst many modern pubs / bars

and fast food outlets are specifically aimed at evening trade – and prolonging the

opening hours of the town centre – they offer little to daytime vitality and indeed, in

some cases, can lead to anti-social behavioural problems which can often damage

the image and perception of a town centre rather than enhance it. Jones et al (2004)

focus on the specific problems facing small and medium size towns in the face of

increased competition from out of town and edge of centre retail developments, as

well as from larger towns higher up the retail hierarchy.

6.31 Balsas (2004) refers to the need for local government to not only implement retail

planning strategies to solve the loss of accessibility and attractions and the lack of

amenities, but also to create long term partnerships with business owners and

corporate organisations in order to perform sustainable city-centre management

activities. Balsas (2004) suggests that achieving sustainable resourcing, other than

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public subsidies, is perhaps the most critical factor for the success of city-centre

revitalisation. The measurement of the effectiveness of the investment and the

attraction of more support is critical.

(ii) The role of retail led regeneration as part of town centre strategies

6.32 Many local authorities have sought to exploit retail development as a “catalyst for

regeneration” whether through large scale remodelling, redevelopment and

reinvestment, extensions to existing provision or individual retail unit investment. For

a large number of local authorities, retail led regeneration forms a major component

of their town centre strategy and action plan.

6.33 Hayton (2001) however, suggests Glasgow’s Buchanan Galleries shopping centre as

an example of where the sequential approach has not necessarily delivered the

benefits it is intended to bring. He states that the development, although located on

the edge of the city centre, could be said to have similar characteristics to an out-of-

town shopping centre, as it is a destination in its own right.

6.34 Hayton believes the shopping centre is of such a scale that consumers will be

satisfied solely by the facilities provided within (and as such will not make linked trips

elsewhere in the city), it has significant on-site car parking which acts as a draw but

also increases congestion and pollution, it fails to link to the rest of the city’s retail

core and it may cause job displacements from satellite towns as competing centres

struggle to compete - and this could in fact result in net job losses.

6.35 Hayton suggests that such large scale retail developments could impact on other

smaller local centres to the extent that they fail, thereby reducing consumer choice,

diminishing local employment opportunities and increasing social exclusion. This view

is endorsed by Instone et al (2006) who also suggests that flagship, inner city retail

schemes may lead to a contraction of independent retailers from these smaller local

centres and as such require careful and thorough assessment prior to commitment.

6.36 Drummond (2002) defines a series of key urban design principles associated with

retail-led regeneration of town and city centres. These are:

• Character – distinctiveness, retail environment, tenant mix

• Ease of movement – permeability and reflecting public and private transport

access

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• Continuity and Enclosure – public and private spaces clearly distinguishable,

street frontages forming the spaces

• Quality of Public Realm – attractive environment, safe and efficient routes

• Legibility – town having a clear image with understandable routes, spaces,

intersections, landmarks, vistas

• Adaptability – ability to respond to change in economic or social patterns without

requiring mass redevelopment

• Diversity and a mix of uses – variety and choice, linked areas of different

character, increased sense of identity and vibrancy. Need to improve life of city

centre into the evenings, beyond normal shopping hours. Need to provide

experiences not achieved at out-of-town destinations

• Sustainability – balance between natural and built environment - maximise

amenity but minimise waste

• Value creation – most essential part of retail-led regeneration

• Inclusivity – somewhere which meets the needs of everyone in society

(iii) The role of independent retailers and retailing in smaller centres

6.37 Instone et al (2006) asserts that in planning and designing retail-led regeneration

schemes in the UK greater consideration should be given (by local authorities and

regeneration agencies) to making physical provision for independent retailers in

affordable retail premises. Whilst this is a positive aspiration, it also needs to be

considered in the context of achieving project viability/potential public sector subsidy

since developers and investors inevitably have a strong preference for multiple

retailers to drive rental values and secure their strength of covenant.

6.38 Instone et al (2006) also suggests the provision of “soft” back-up in terms of

appropriate retail training and promotional skills to assist the development of an

attractive mixed retail offer and ensuring high-quality standards for customer care.

This type of initiative would also go some way towards addressing the recent “clone

town” critique directed at centres dominated by multiple retail brands, with local

centres seeking a role that caters for the local community whilst also developing a

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specialised role catering for the wider community and catchment. We have also

found this approach to be particularly positive in smaller/market towns in order to

engender retailer co-operation and increased levels of customer service, whilst

seeking to differentiate themselves from larger centres.

6.39 Finally, Instone et al (2006) suggests that balanced retail led regeneration proposals

in the smaller towns may not be achievable solely through private investment – the

need for pump primed investment through public sector gap funding is recognised

and/or cross funding through appropriate planning agreements.

6.40 Ravenscroft (1999) suggests that some secondary and tertiary retail areas in town

centres (which may be becoming associated with failure) could be converted to

leisure uses and this, whilst not necessarily impacting on long-term viability, may

underpin vitality of a town centre. Ravenscroft recognises that the growth of a

‘leisure quarter’ for instance could be the bi-product of a changing town centre

structure.

6.41 Guy (2004) believes that smaller centres should seek to complement major shopping

destinations rather than compete directly, particularly when it is the larger towns and

cities that are the primary focus for mixed use developments including elements of

leisure and / or residential. It is argued that smaller town centres should seek to

differentiate themselves by:

• Continuing to offer shopping for town centre residents, workers and tourists:

limited food offer, newspapers, chemists goods etc., either through one large

foodstore or, preferably through the traditional mix of small shops, adding to

variety and linking back to the community;

• Supplying a good selection of clothing, footwear and furnishings, but

emphasising service and variety rather than trying to compete on price (e.g.

similar to a small department store);

• Selling more fresh foods, specialist foods, high quality food and market stalls;

• Marketing as a whole – special events, cultural attractions, eating out, in

addition to promoting the retail offer.

6.42 Guy (2004) suggests that local centres can seek to differentiate themselves from

larger centres by identifying a niche and offering types of retail which are

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underserved by mainstream retail. Many such communities have high proportions of

ethnic minorities and have historically attracted a diverse range of independent

retailers who provide local residents with specific, specialist requirements..

6.43 Bennison et al (2004) identifies the importance of independent traders to the success

of town centres, particularly in medium and smaller centres, acting as an important

area of differentiation between centres. It is suggested that the Council’s role should

be to make retailers aware of the support for small businesses provided by local,

regional and national agencies. The research carried out by Bennison et al (2004)

suggests that most independent retailers are unaware of these opportunities which

could help them provide a sustainable contribution to the vitality and viability of town

centres.

6.44 The problems associated with smaller centres can be exacerbated by large

supermarkets which provide an extended range of convenience and, ever more so,

comparison goods. Instone et al (2006) quotes the example of local centres close to

Scotland Road in Liverpool which have declined (for a number of reasons, including

the growth of the city centre and the growth of supermarkets and edge-of-city retail),

and where residents, in a community in which less than 20% have access to a car,

have to travel relatively long distances to shop. Guy (2004) however believes that

supermarkets (and retail parks) should not be located in town centres which “can be

badly spoilt by unsympathetic big box developments which don’t blend well with the

townscape and create acres of car parking”

6.45 It is argued that local authorities should consider the potential and role of local

centres within a wider framework of retail provision in the area rather than purely

focussing on large, town or city centre schemes. Indeed, according to Jones et al

(2004), PPS6 aims to provide a planning framework which will encourage and

facilitate the regeneration of all types of town – large or small – however it is argued

that such a comprehensive approach which supports an “efficient, competitive and

innovate retail and leisure sector may not necessarily be consistent with the growth

of, and private sector investment in, small town centres”.

6.46 Instone et al (2006) acknowledges that, as policy has shifted towards the

enhancement of the vitality and viability of existing retail centres, local government

and town centre management partnerships have sought to increase competitiveness

by a number of initiatives including; improved car parking provision, traffic-calming

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measures, pedestrianisation, and the emergence of Business Improvement Districts

(BIDs).

6.47 Bennison et al (2004) argues that, whilst most local authorities may prefer to deal

with multiple retailers who may be able to contribute towards infrastructure

improvements, and legislation such as PPS6 which is “top-down”, favouring large

retailers over independents, the BID schemes require co-operation from all local

businesses and therefore may provide independents with the opportunity for a

“bottom-up” response to key issues.

6.48 The Manchester Metropolitan University Business School and Retail Enterprise

Network undertook research in 2004 to examine the role of independent retailers in

providing a differentiated town centre. The report identified actions and initiatives

through which centres can exploit a diverse retail offer:

• Strategic Plan for town centre

• Analysis and benchmarking of centre against competitors

• Capitalise on strengths and develop unique selling point, e.g. clusters of retail

with similar goods or services

• Process must be collective, including all key stakeholders – use of direct

contact, public meetings or retail clubs to encourage independent retailers

• Internal promotion – inform all stakeholders, builds commitment and

participation

• External promotion – direct marketing, advertising, public relations, website

development

• Make independent retailers aware of small business assistance initiatives from

local, regional and national agencies

6.49 The Under-served Markets Project is based on a similar initiative undertaken in

Harlem, New York, whereby it seeks to attract retail investment into local centres,

typically those serving inner-urban areas characterised by lower income households.

In Harlem, an improved diversity and quality of retail provision was attracted to the

area which led to increased local independent traders and, therefore, improved

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consumer choice and new employment opportunities. High profile private sector

investment caused a change in the external perception of the area – as a business

location – and helped to create a sense of community pride.

Summary of Key Issues

• The literature review on TCS’s has highlighted a number of generic issues and

principles of wider relevance to the preparation of TCS’s. which are summarised

below.

• Town Centre Strategies should be based on a realistic understanding of the

town’s role and profile, identifying issues to be addressed and appropriate

initiatives to build on a centre’s strengths and opportunities. Town centre

health checks have an important role to play in this regard, both in informing the

strategy and monitoring the impact of its implementation.

• Developing a shared vision and agreed strategy for the town is vital to

underpinning support at all levels and in maximising the chances of successful

delivery. The local authority has a central role to play in this, working in close

partnership with the private sector and other interested parties from the outset in

order to build consensus.

• In addition to their role as planning authority, local authorities can have a vital

role to play in developing and delivering town centres strategies by utilising their

property assets/ownerships and CPO powers to assemble key sites where

appropriate.

• Town Centre Strategies require clear implementation and action plans to

ensure that appropriate funding and delivery mechanisms are in place. This

may cover a range of issues including costings and funding sources for

individual projects, development briefs for specific sites, planning policies, site

assembly mechanisms and management vehicles.

• It is important to properly assess the potential impact, as well as the benefits, of

flag ship projects and new developments on the centre as a whole, (e.g. the

impact of large scale retail development on independent/local retailing and on

smaller centres) prior to their inclusion in a strategy.

138


• It should not be assumed that a single project or issue will act as the panacea

for improvement to a centre, rather a series of inter-related factors or “building

blocks” need to be taken into account. It is also important to identify a series of

shorter term, deliverable projects that can act as “quick wins” and provide

momentum and support to delivery of the strategy, in addition to any longer term

“flagship projects”.

• Smaller centres should seek to be complementary and differentiate themselves

from larger centres, rather than being in direct competition, focusing on the

importance of independent and local retailers to their vitality and viability.

• The successful delivery of town centre strategies requires political will and

significant commitment at a financial and personal level. Strong individual

leadership is vital, often in the form of a “project champion”.

• Town centre strategies require ongoing monitoring and review to assess the

impact of their implementation over time, the need for them to be refined and

updated and to reconfirm the commitment of key parties.

139


7 Strategic Retail Models Context

7.1 A number of areas covered in this working paper have identified the importance of

understanding the characteristics of retail expenditure/flows to and between retail

centres. These have included the following:

• The importance of establishing the extent of qualitative or quantitative

need/deficiency within a defined area (see Chapter 3).

• The importance of understanding existing market areas for existing centres as a

key stage in retail impact assessment (Chapter 4 – especially Drivers Jonas/SO

1992, England 1999 and CBRE/SE 2004).

• The importance of understanding changes affecting individual centres through

the implementation of TCHCs collecting data on individual V&V indicators (see

Chapter 5). In addition some have indicated the role for extending the range of

V&V indicators to consider changes in the catchment served by centres (in

terms of population and available expenditure) and/or understanding changes in

retail provision and competition affecting centres.

• The role of assessing the strengths and weaknesses of centres for the

preparation of town centre strategies which includes existing constraints and

potential/actual threats to the trading position of the centres under examination

(see Chapter 6).

• Finally the broad requirements of policy formulation in understanding the

pressures affecting individual centres and the role of the network of centres is an

express requirement of SPP8 (e.g. paras 10, 13 &14).

7.2 All of the key issues which are the subject of this research would benefit from, to

greater or lesser extent, some form of broader strategic understanding of the retail

context affecting town centres. This is the essentially the aim of preparing strategic

retail models (SRMs).

7.3 At the outset it should be recognised that this type of SRM is significantly different

from the models identified in Chapter 4 of this Working Paper. These were the

models developed during the 1960s and 1970s to assist in the forecasting of the

140


retail impact of proposed future developments. They were based on a series of

theoretical links between areas of expenditure origin (i.e. where people live) and

destinations for expenditure (i.e. retail centres). The prime linkages for the

identification of these flows included gravity weighting (i.e. distance acting as a drag

to expenditure flows), the mass of expenditure in both the origin and destination

zones/areas and other factors such as intervening opportunities. As would be

expected with model development of this type a significant period of time was

required for the calibration of the models. Criticisms of these models have been

noted but they were used by authorities such as Central Region and Strathclyde

Region prior to reorganisation.

7.4 The SRMs which are the subject of this section are primarily descriptive models of

existing retail patterns – derived from identifying retail flows between origin zones and

destination centres. They are primarily based on detailed and extensive household

surveys with surveys of floorspace to establish the current (base) position which can

then, in theory, be rolled forward to assess potential changes in future years. As a

result they are very similar in concept to the requirements for the identification of

baseline situation identified in the work of Driver Jonas (SO, 1992) and CBRE (SE,

2004) for RIAs but the key differences are:

• the scale of the modelling (i.e. generally to cover a wider area than that required

for identifying the catchment area for a specific retail proposal);

• the range and number of model zones (in some cases at least); and

• the way that the model is used – in general, different scenarios are tested to see

the effects on a range of centres rather than identifying specific impacts from

development proposals.

Review of SRMs

7.5 A key feature of this type of descriptive SRM is that they are very rarely considered

within the literature. In England (which is the source of most retail planning literature)

the clear policy requirements for identifying quantitative need has led to the

dominance of retail capacity assessments/studies for planning authorities or RCA

used within RIAs. In the review undertaken we have not identified any independent

assessment of the advantages and disadvantages of this type of SRM.

141


7.6 Therefore the focus of this section is to briefly review SRMs that have been

undertaken in Scotland. The principal SRMs that have been considered are those

prepared for the Highlands, Moray and North East Scotland.

Moray & Highland

7.7 In the mid and late 1990s SRMs were prepared for both Moray and Highland Council

areas. The Highland SRM was based on a comparatively simple three zone system

based on the Inverness area (Primary Zone), a Secondary catchment Zone

(effectively the principal catchment area for the city) and Tertiary catchment zone and

flows between these zones and centres were identified.

7.8 The Moray SRM was more refined than that used in the Highlands and was based on

the identification of two catchments subdivided into post code sectors. This gave a

total of 18 zones for the identification of the origin of expenditure. Ten destinations

for expenditure were identified comprising the four town centres within Moray, the

remainder of Elgin (i.e. out of centre floorspace) two local rural areas and three

external zones (i.e. Inverness, Aberdeen and other). Information was derived from

household and shopper surveys and floorspace provided through the regional

assessor and council records. Three separate goods categories were used

(convenience, general comparison and bulky goods) and flows assessed (in the most

recent version) for 2004 and 2009.

7.9 More recent assessments for both the Highlands and Moray were undertaken by

Halcrow which have reverted to a conventional retail capacity approach consistent

with the approaches identified in Chapter 3 of this Working Paper.

Aberdeen and Aberdeenshire Strategic Retail Model

7.10 This SRM was prepared in 2004 for both Aberdeenshire and Aberdeen City Councils.

The model was developed as part of a wide ranging retail study for the north east

which included a consideration of all principal retail locations within the north east

including Aberdeen City Centre. Information from the model is routinely updated for

use in inquiries.

7.11 The basic structure of the model is as follows:

1. Identification of available expenditure within North East Scotland. This is

provided through a combination of the following:

142


Existing and future population.

Growth in available expenditure per head for defined retail goods categories.

Identification of retail goods expenditure sourced from non-residents (including

tourists, day-visitors and other residents originating from outwith the study

area).

2. Identification of the destination of existing expenditure to the following:

“Special” forms of retailing i.e. not through shops;

Towns and cities within the study area;

Other local shops within the study area (including both rural shops and local

shops within Aberdeen and other towns);

Towns and Cities outwith the study area.

3. Combining information on total available expenditure and patterns of expenditure

provides an assessment of existing levels of turnover within different locations. It

also allows the identification of the leakage of expenditure (i.e. originating from

within the study area but being spent outwith the Council area).

4. Comparison between the turnover of defined centres/areas with known floorspace

allows a calculation of the turnover rate for different types of retail shop.

5. A series of scenarios of future retailing can be undertaken by rolling forward the

assessment to future years (from 2004 to 2006 and 2011) reflecting:

Changes in population;

Changes in available expenditure per head;

Changes in floorspace within the study area.

7.12 The following figure describes the relationship between the principal components of

the model and key information sources used.

143


Structure of AASRM

Existing Stores Turnover

• Floorspace • Turnover

rates

D A T A S O U R C E SHousehold Survey: Existing patterns of spend 2001 Census: Population GRO(S) Population forecasts Planning Authorities: Existing floorspace and commitments; population and forecasts; vitality and viability data Regional Assessor: Existing floorspace MapInfo: Available expenditure by goods categories; Expenditure growth forecasts Retail Rankings: Average turnover rates Aberdeen & Grampian Tourism: Quantum and distribution of tourist bed spaces Aberdeen and Aberdeenshire STEAM report: Tourism expenditure Land Use Surveys 2004 occupiers; vitality and viability indicators

Existing Available Expenditure

• Postcode sectors • Population • Available

expenditure per head

Trade Distribution

• Survey data • Total Available

Expenditure

Existing Patterns of Trade

• Trade draw • Penetration rates • Analysis by postcode

sectors

Future Patterns of Trade for "Central Case"

Scenario’

• Growth in available expenditure

• Population change • Planned/committed

floorspace

Rolling forward

Scenario Testing Notional "Capacity"

144


7.13 Within the study area there is a population of 430,000 i.e. covers about 8.5% of the

population of Scotland ranging from a major city to remote rural areas. The model is

based on 32 origin zones and 39 destination locations for the same three retail goods

categories used in Moray. The model assessed a range of different scenarios and

built in retail commitments to assess the potential changes that would be experienced

by centres from 2004 to 2011.

7.14 The outputs of the model were used in a range of ways:

• Creation of indicators of turnover and catchment changes for centres for the

period to 2011.

• Identification of sales densities for retail units within the study area (also used as

an indicator of V&V).

• Establishment of baseline information and existing catchment areas for use in

RIA.

• Identification of quantitative and qualitative retail deficiencies for centres and

catchments.

• Contribution to understanding the operation of the network of centres and the

role of individual centres.

• Contribution to the development of local and strategic planning policy

development.

7.15 Although AASRM has been used in a range of contexts and some of its information

tested through public inquiries (including both appeals and for one Local Plan) there

has been no independent review of the model and its usefulness. The response of

the planning authorities (who have paid for the model and have previously

experienced retail capacity based assessments) in the second stage of this study will

be important to assess the validity of this approach.

Experience in England

7.16 In England a number of strategic retail models have been developed for particular

locations. These are primarily (but not exclusively) developed by GVA Grimley and

Donaldsons consultancies. Although a key requirement of these studies is the

145


identification of retail capacity (reflecting national planning policy requirements in

England) a key characteristic of these studies is the development of a zonal system

for the identification of expenditure flows and market share for individual centres.

This allows the identification of catchment areas for centres (including overlapping

catchments). The following sets out examples of these models recently used in

England.

RECAP Model - Donaldsons

7.17 The RECAP model (“Retail Capacity”) is an empirical retail expenditure allocation

model which allocates available shopping catchment area expenditure to town

centres and other shopping destinations on the basis of detailed and extensive

household surveys. The calculation of retail capacity is made for the range of retail

locations within the study area based on changes in available expenditure and

changes in market shares of centres (i.e. express recognition that the patterns of

expenditure can and will change over time).

7.18 In essence the model development is comparable to that used for AASRM described

above. Donaldsons identify the following as the main purposes of the RECAP model:

• To estimate current retail sales in town centres, food superstores, retail

warehouse parks, and other main shopping destinations, as a means of

assessing current retail performance, and setting a 'baseline' for forecasting;

• To produce forecasts of future retail sales in each shopping destination;

• To produce forecasts of the amount of additional retail floorspace which will be

supportable in each shopping destination by growth in population and retail

expenditure;

• To explore the implications and realism of alternative strategies for new town

centre and other retail developments.

• To produce forecasts of the impact (in terms of retail sales diverted) on existing

shopping destinations of proposed new retail developments;

7.19 Examples of these strategic RECAP models include the following:

146


• Harrow Retail Study 2005. Although covering a large population (375,000 rising

to 400,000) this model was comparatively limited in scope in that it utilised only

9 zones (derived from 40 postcode sectors) and retail destinations were

primarily Harrow Town Centre and a series of non-town centre food stores (19 in

total). The period of assessment was from 2005 to 2016.

• Dacorum Retail and Leisure Study 2006. This was based on only 8 zones

(derived from 26 postcode sectors with a combined population of 200,000-

230,000) but addressed the catchment characteristics of three town centres

(Hemel Hempstead, Berkhamstead and Tring) as well as out of centre retail

floorspace.

Study of Black Country Centres 2005

7.20 This study was undertaken by GVA Grimley and Roger Tym & Partners on behalf of

the Black Country Consortium of the four Black Country local authorities. The model

was regional in scope covering a total population of approximately 1.8m (i.,e.

comparable to the population of Glasgow and the Clyde Valley Structure Plan area)

with a modal utilising 54 zones which covered both the Black Country itself and its

wider catchment area. Data for the development of the retail model included both

extensive household and shopper (“in-street”) surveys.

7.21 A key characteristic of the Black Country is its polycentric structure with a series of

large town centres (Wolverhampton, West Bromwich, Walsall, Dudley etc) and major

out-of-centre floorspace at Brierley Hill (Merry Hill) as well as numerous smaller

centres and out-of-centre retail floorspace. Using information from an extensive

household survey, the study identified expenditure flows and market share

information from the 54 zones to over 350 retail destinations. The time horizon for

the study is also significantly longer than other studies noted above – it encompassed

retail change from 2004 (base year) up to 2031.

7.22 Reflecting the polycentric nature of the study area the report specifically considered

the catchment areas of each of the larger centres and the extent to which external

centres (e.g. Birmingham City Centre and others) achieved market share within the

Black Country.

7.23 The study was concerned principally with developing strategic policy options for the

retail centres within the Black Country based on different approaches that could be

147


adopted for the spatial distribution of forecasts shopping provision with appropriate

market testing of these options.

Bedford Borough Retail Study 2005

7.24 This study was undertaken by GVA Grimley to support the Council’s Local

Development Framework. The study area had a population of 380-420,000 and the

model utilised 12 study zones (comprising 50 postcode sectors). The model

analysed expenditure flows and market shares for convenience goods and

comparison goods for the centres of Bedford, Kempston and three principal

convenience out-of-centre locations and a further three non-food retail parks.

Alnwick Retail Study 2003 & 2005

7.25 Unlike the other case studies listed above the Alnwick Retail Study covered a

predominantly rural area in Northumberland with limited population (ca. 32,000). The

2005 study was undertaken by Hargest & Wallace Planning. A comparable approach

to those listed above was undertaken examining expenditure flows and market share

for the three principal centres within the District (Alnwick, Amble and Rothbury) for

convenience, general comparison and bulky goods. Despite the limited population

the extended geography of the study area (with population density of only 29 per

square kilometre – which is comparable to that of Dumfries & Galloway or

Aberdeenshire) resulted in the use of 10 model zones based on individual postcode

sectors. The analysis of market share was based on a combination of household

surveys, shopper surveys and business surveys and in the three principal town

centres. This allowed the identification of catchment areas for the centres and flows

between the district and other locations – notably Newcastle, Morpeth and Berwick.

7.26 The data derived from the model was used in assessing impacts of a series of

supermarket proposals for Alnwick including cumulative impact assessment and is

currently being used to identify retail capacity potential for each of the three

settlements in the District as a component of the Council’s Local Development

Framework.

148


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