Comment

Representation ID: 44924

Received: 11/10/2021

Respondent: Aldi Stores Ltd C/o Turley

Agent: Aldi Stores Ltd C/o Turley

Comment on the retail policy evidence base:

We note that the consultation process does not invite comment on the supporting evidence base for the emerging Black Country Plan. However, we have concerns about certain aspects of the retail policy evidence base which we consider need to be aired on the basis that the proposed retail policies are directly influenced by the outputs of the Black Country Centres Study (BCCS). We therefore set out our comments below:
Introduction
1. The BCCS seeks to assess the quantitative need for new retail floorspace over the period to 2039 within a geographical area consisting of four LPA areas and containing a population of over 1 million. It is therefore one of the largest, most extensive retail studies of its kind across the UK. Its findings are underpinned by a household shopping survey which sought information on shopping patterns (convenience and comparison goods) from a representative sample of 5,500 households living across the Black Country. The assessment can therefore be fairly characterised as a strategic and high level.
Absence of Qualitative Evidence
2. The BCCS also presents a quantitative assessment of retail needs only, with no analysis of qualitative factors such as, in relation to convenience retail development, the extent to which existing retail facilities are able to meet the needs of existing populations that use them. This qualitative assessment would normally include analysis of such factors as:
• the quality and choice of foodstore provision within different centres or zones;
• whether existing stores are overtrading or undertrading relative to company average turnovers (and if overtrading, the extent to which that undermines store performance); and
• the adequacy of car parking provision for shoppers carrying out a main food shop.
3. There are no questions in the household survey which seek to capture views on the adequacy of the existing retail provision within the BCP area from a qualitative perspective. For retail studies covering a smaller geographical area with a relatively small catchment population, the inclusion of questions within the household shopping survey to elicit data on the qualitative aspects of retail need is standard practice.
4. While the reasons for not delving into such a detailed level of analysis for a retail study covering the whole of the Black Country is understandable, it must be recognised that the study can necessarily only provide an overview of the quantitative retail floorspace needs of that area. Moreover, because there is no recognition in the Study of existing foodstore overtrading, it effectively underestimates the quantitative need for new convenience retail floorspace. This is potentially the case within the Study area as a whole, but almost certainly the case at a local level within the constituent local authority areas. For example, we have evidence to demonstrate that existing convenience provision in three of the four main centres in Walsall (Bloxwich, Brownhills and Aldridge) is trading at levels substantially in excess of company averages for the individual stores within those centres. This gives rise to some of the negative qualitative impacts associated with overtrading such as car parking congestion, crowded shopping aisles and difficulties in terms of restocking.
5. Confirmation that the methodology adopted in the BCCS to assess quantitative need does not include any assessment of overtrading in existing retail stock is set out at para 5.4 of the Vol 1: Main Report (2021 Update). This states that:
“It has necessarily been assumed for the purpose of the capacity assessment that the BCLA’s (convenience and comparison goods) retail market is in ‘equilibrium’ at the base year. In other words we assume that existing centres and stores are broadly trading in line with appropriate ‘benchmark’ turnover levels at the base year and based on adjusted market shares for new store openings. Therefore, any residual expenditure available to support new retail floorspace within the study area over the development plan period is derived from the difference between the forecast growth in ‘current’ (survey-derived) turnover levels; and the growth in ‘benchmark’ turnovers based on applying year-on-year ‘productivity’ (‘efficiency’) growth rates to all existing and new retail floorspace”.
Problems with this Approach
6. The problem of adopting this approach is that any existing overtrading in existing retail stock is simply accommodated into the benchmark figures and it is then assumed that this will continue (and in fact will worsen due to increases in expenditure availability) over the Plan period.
7. The importance of this deficiency of the BCCS is that the approach to the formulation of retail policy in the BCP is heavily influenced by the outputs of the Study and particularly the findings that there is only a very small requirement for new retail floorspace (for both convenience and comparison goods) over the Plan period. This has led to the formulation of policy which sets unduly high hurdles for new edge or out of centre development to achieve, coupled with no policy incentive for LPAs to review and expand their designated centre boundaries to accommodate no new retail development in the second tier development plans. The outcome from such a strategy will be to deter investment from the few retailers still seeking to deliver new retail facilities existing residents, in particular the discount retail sector, which, as acknowledged at paras 2.23 and 2.41 of the Main Report (Vol 1) of the BCCS, are still actively expanding their portfolio of stores.
Resultant Retail Policy Issues
8. Of particular concern regarding the formulation of retail policy in the draft BCP, which we consider is directly influenced by the outputs of the BCCS, is the setting of a local threshold of 280 sq m gfa for the submission of retail impact assessments for all edge or out of centre retail proposals (ref Policy CEN6). We make separate representations on that matter. However, it is pertinent to state here that this very low (and in our view unjustified) threshold is a direct consequence of the view that as there is very little qualitative need for new convenience retail floorspace. Accordingly, virtually any scale of new proposal will necessarily have to draw its trade exclusively from existing retail outlets (rather than from growth in available expenditure) and this could give rise to harmful impacts (see para 8.59 of the BCP). We consider that such a perspective is based on speculation rather than evidence and does not form a sound basis to construct policy.