By David O’Connor
The New Year is well in and maybe its a good time to gather thoughts and reflect on the state of retail, a sector that seems to pass through its own pain barrier around this time of year.A� This time, even more than last year, has been a portentous one with prophets of doom predicting tectonic changes in the sector.A� Whether or not this will be the case, there is a lot happening in terms of the planning of the industry as well as its underlying market dynamics.
The sense that retail is in crisis is hard to avoid, given levels of vacancy, issues with rents, rates and other costs, growth in e-shopping (and now a�?m-shoppinga�?, on your smartphone, that is) and the shortage of discretionary income among consumers.A� Much of the media discussion has surrounded prospects for retailers.A� In the UK and beyond, debate has revolved around the viability of not just shops but whole town centres.
This piece represents something of a briefing pack on recent and current reports to do with retail.A� It is not intended to be an exhaustive or fully comprehensive outline of currents in retail planning sector.
What follows are a number of reports, articles, submissions and opinion pieces on retail both in Ireland, the UK and globally.A� Particularly of note are the publication of draft Retail Planning Guidelines and also the Portas Report in the UK.
Draft Retail Planning Guidelines
The Draft Retail Planning Guidelines were closed for public consultation on 20th December 2011.A� Perhaps the most notable aspect of the draft guidelines was the straighforwardness of the Minister in declaring that this was a review foisted on us by the IMF / ECB / EU Troika.A� The Department replied with an incremental approach to modifying the retail cap (3,500sqm. raised to 4,000sqm. in the Greater Dublin Area; removal of the distinction between discount retail foodstores and conventional retail foodstores, etc.).A� This moderate approach has, apparently been accepted by the Troika.A� In addition, the guidelines increase emphasis on the sequential approach and encouraging town centre retail development.
The Forfas Report
A precursor to the review is the Forfas a�?Review of the Economic Impact of the Retail Capa�?, published in April 2011.A� One of the conditions of the EU-IMF Programme for Financial Support for Ireland was that a�?the government will conduct a study on the economic impact of eliminating the cap on the size of retail premises with a view to enhancing competition and lowering prices for consumers and discuss implementation of its policy implications with the Commission servicesa�?.
The report emphasises the important societal effects of retail policy and the need for careful regulation of a complex market.
Among other things, the study revealed the dominance in our grocery retail sector of three brands a�� Tesco, Dunnes and Supervalue a�� who control more than 70% of sales between them.A� Or is it even more than this?
Submissions to the Draft Retail Planning Guidelines
The IPI made a submission to the draft guidelines, singling out some important details regarding definitions and seeking increased emphasis on enforcement of the sequential approach.
The IPI also call for a Good Practice Guide, suggesting that implementation of existing guidelines has been poor, mainly due to a�?lack of understanding of practitionersa�?. A�All of which seems eminently sensible.
An Taisce made a submission which related the draft guidelines to the Smarter Travel Policy document.A� In particular they urge that fair car parking pricing strategies be applied to out-of-town centres.A� The submission, drafted by a DIT Spatial Planning graduate, is excellently referenced and draws on international studies on retail policy impacts.A� Some of its conclusions are listed below: –
- A�The Governmenta��s own research shows that large out-of-town retailers are growing and smaller shops in town centre locations are dying. Fact: the independent retail sector shrunk 50% between 2001 and 2006 while retailers that control their own brands, delivery systems and product research have grown by 62% over the same five year period.
- A�Locally based shops return twice as much money to the local economy as out-of-town retailers. Fact: locally-based shops return one-third of their revenues to the local economy but large out-of-town retailers only return 16% of revenue back into the local economy.
- Research from the UK warns: a�?the ability to build stores outside towns has been made possible by a combination of confused and poorly applied planning rules, the power of developers, and weakness of local councils. Unless we see urgent action our high streets will be lost to a final wave of out-of-town retail construction that threatens to remove retail from the heart of our communitiesa�?.
- A�When residents redirect their spending from out-of-town retailers to locally owned businesses additional jobs are created and economic activity in the area increases. Fact: A Michigan study shows 1,600 additional jobs and $140 million uplift in economic activity occurs.
- A�Locally owned businesses employ more staff and pay better. Employees in a�?superstoresa�� earn 20% less according to Wal-Mart data. Indeed, a�?opening a single Wal-Mart store lowers the average retail wage in the surrounding county by between 0.5 and 0.9 percenta�?.
- A�1.4 jobs are lost for every 1 new job created in a a�?megastorea��. Because of their failure to engage with local suppliers and re-circulate money back into local economies, each new out-of-town a�?megastorea�� results in a net jobs loss of 270 full-time positions.
http://www.antaisce.ie/News/AnTaisceRelatedNewsReleases/tabid/1024/articleType/ArticleView/articleId/220/Proposed-changes-to-retail-guidelines-will-cost-jobs-and-cause-more-dereliction.aspx (submission document available on request from an Taisce)
Commentaries on the Retail Planning Sector in Ireland
a�?Retaila��s Ticking Clocka�?, Sunday Times, 1st January, 2012
Good commentary on changes in the Irish retail sector, focussing on prospects for the oldest of them all a�� Clerya��s Department Store, suggests a curates egg of an industry.A� Strong brands such as Avoca, Brown Thomas and the Dundrum Town Centre are performing well with many recently built centres dying on their feet and bringing existing town centres with them.A� Some strong words for the state of planning in the sector.
a�?High Noon on High Streeta�?, Irish Times, Friday January 13, 2012
Laura Slattery in Business Agenda asks if the recent la Senza closure and confrontation is a sign of things to come.
A�IPI Planning Issues Editorial
The Editorial of this montha��s Planning Issues, the e-bulletin of the IPI, singles out the topic of retail for its importance.A� Right now, more than ever, there is a coincidence of need and opportunity for reform and it must be through good retail planning.
Uptown Downtown series
In April 2011, Carl Oa��Brien released a three-part series called Uptown Downtown.A� In it he profiled three towns, Youghal, Drogheda and Longford, which, for different reasons seemed to be in a spiral of decline. The series provoked the question, is there anything that can be done to save the Irish market town a�� iconic and archetypal to so many of us a�� from disaster. A� Worth it alone for the comments added by readers.
Youghal: How do you fix a broken town?
Drogheda: On paper, the town has it all
Longford: After the factory shuts its doors
The View from Oa��Connell Street
Another three part series, just published, on the Oa��Connell Streets of Ireland, by Rosita Boland
Dungarvan: a�?not thriving, but survivinga�?
Ennis: a�?has nightlife died in Irish townsa�??
Sligo: a�?It used to be wonderful, now ita��s a junglea�?
A wider debate is going on in the UK, with loud claims that the large retailers are strangling the life out of the British town and, indeed, way of life.
The Portas Report
Much of this is prompted by the publication by the UK Government of the Portas Report.A� Town centres in the UK have lost 27 million sq ft or 9% in just nine years. In contrast, out of town retail space has risen by 50 million sq ft, or one-third, over the same period.A� Shops are closing down at a rate of 5,000 a year and as many as one in six premises lie empty.A� Portas argues that much can be done if one accepts a few golden rules. One, that not everywhere can be saved, and, secondly, the future cannot just be about shopping.
The New Economica��s Foundation welcomes the Portas Review.A� They also call for increased controls on oligopolistic practices, better urban design in town centres and better financial systems, including micro-finance.
These sentiments are well expressed in a number of recent articles which lament the loss of the social role played by the local shop.
Supermarkets kill free markets as well as our communities, Peter Wilby in the Guardian, 3rd May 2011
Window pains, By Edwin Heathcote in the Financial Times, 2nd November 2011
Saving the British high street from decades of decline, Mark Hennessya��s London Letter to the Irish Times, 14th December 2011
Commentaries on the Retail Planning Sector globally
Perhaps most surprisingly, while all this is going on, a revival of town centres is taking place in the US.A� Some of this is being driven by market dynamics, some of it by better planning practices (the New Urbanist movement is a strong force in American cities).
The Death of the Fringe Suburb, by Christopher B. Leinberger in the New York Times, 25th Novbember 2011
Keep it Local Eugene, a forum for discussing the benefits of local businesses and thr impact of chain and big box stores.
Birth, Death and Shopping a�� the rise and fall of the shopping mall, in the Economist Christmas Special Edition, 2007.A� A favourite of mine, this article suggests that in the capital of consumerism a��America a�� the shopping mall is dead and walkable, open and sustainable a�?smart growtha�? town centres are the way to go.
Do we need any more proof?
David O’Connor is a practitioner in Transport and Urban Design and is current Chairperson of the Spatial Planning Graduate Network. firstname.lastname@example.org