Irish Hardware & Building Materials Association

Elmville, Upper Kilmacud Road,  Dundrum, Dublin14.

Tel – 01 2980969    Fax – 01 2986103   Email – info@ihbma.ie    www.ihbma.ie

  

SUBMISSION 

 

IN  RELATION  TO

 

THE  DRAFT 

 

RETAIL  PLANNING 

 

GUIDELINES  2011 

 

 

 

INTRODUCTION 

 

The Irish Hardware and Building Materials Association (IHBMA) is the national representative body for Hardware, DIY, Homewares, Home Décor outlets, Builders’ merchants, Electrical stores and Garden and Agricultural suppliers, at retail, wholesale and manufacturing level.   The IHBMA currently represents over 600 members who, together, employ 24,000 people in 800 retail outlets throughout the country.  The IHBMA is a truly representative body, monitoring the interests of independent retailers with single outlets as well as larger national retailers with outlets nationwide. 

The IHBMA represents members’ interests at all levels to Government, semi-state and regulatory bodies and is also a reliable source of industry information for government, consumers, media and other interested parties.  The Association is a nominating body for elections to Seanad Éireann and is affiliated to the International Federation of Hardware & Housewares Associations (IHA). It is also a member of the European Association of National Builders Merchants Associations (Ufemat). 

The Irish Hardware & Building Materials Association would like to commend the work that has been done by Phil Hogan TD, Minister for the Environment, Community & Local Government and his officials at the Department of the Environment, Community & Local Government, and would support the Minister’s assertions that a strong retail sector is a key element of the vitality and competitiveness of cities, towns and villages throughout the country.

 The IHBMA agree that the planning process should provide a clear framework for the continued development of the retail sector, providing certainty for retailers and communities in the relevant Government policy framework thus ensuring the vitality and appropriate places for retailing activity, ensuring competitiveness locally, regionally and nationally.  

However, there is a continuing need to guard against the proliferation of retailing in locations where there is poor demand and not well supported by existing transport links.  This proliferation has the ability to have an adverse impact on the vitality of nearby cities and town centres. 

The IHBMA is also delighted to see the general presumption against large retail centres located adjacent or close to existing new or planned national roads/motorways.

 

 

REVISED  RETAIL  FLOOR  SPACE  CAPS  AND  THEIR  IMPLEMENTATION -

 

The retail formats with which our members will have the greatest concern areRetailParksand Retail Warehouses.  It is obvious that the number of retail parks have grown exponentially over the past ten years reaching a saturation point in most areas.  The IHBMA would argue that the size of units in retail park developments in the range 8,000 to 15,000 sq.m. gross floor area would have material adverse impact on the more important town centres in the retail hierarchy.  A detrimental impact on cities/town centres has already occurred, indicated by high vacancy rates in urban centres, also on the periphery in the retail parks themselves. 

There has also been confusion regarding the types of product and definition of goods permitted to be sold in these parks and it is opportune that their impact is reassessed, given that the definition of goods permitted has been blurred.  It is necessary therefore to counteract this by specifying exactly, and ring fencing the type of goods sold in these retail parks, which would be limited to definable bulky household goods or goods generally sold in bulk which are not portable by customers travelling by public transport.  Planning authorities should carry out very rigorous assessments as part of any retail strategy and development plan as to the impact they will have locally, regionally and nationally. 

We are very supportive of the guidelines assessment that for the future the cap on large scale single warehouse units in excess of 6,000 sq. m gross floor area (including any ancillary garden centres) will remain, due to their potential effect on the surrounding road network and their potential for creating local monopolies which would inhibit competition within local catchment areas.   We see this as being critical to maintaining market place diversity. 

We are particularly supportive of the guidelines where they say that exceptional provision for certain types of large scale retail warehouse needs to be provided.  The scale of these outlets require a national population catchment and that from a planning perspective any proposal for an individual retail warehouse with a floor space in excess of 6,000 sq.m gross, would need to demonstrate that the proposed development will fulfil all of the stated criteria contained within the exceptional provisions.

 

 

REQUIREMENT  FOR  JOINT  OR  MULTI  AUTHORITY  RETAIL  STRATEGIES  AND  THE  METHODOLOGIES  FOR  THEIR  DELIVERY  - 

The IHBMA are very supportive of joint or multi authority retail strategies required by these guidelines, in that they will identify the level and spatial distribution of future retail floor space requirements for the national spatial strategy gateways and their catchments.  The reality is that the nature of the retail sector inIrelandis such, that regardless of whether retailing is for convenience or comparison goods, the catchment for such activity transcends local authority boundaries, and in some cases the boundary withNorthern Ireland. 

So it is the contention of the IHBMA, and contained within the draft guidelines, that development plans and local area plans, need to be informed by assessment of the retail activity and demand needs which transcend such boundaries.

 

 PROPOSED  METHODOLOGY  FOR  ESTIMATING  RETAIL  FLOORING  SPACE  REQUIREMENTS  -

 

IHBMA are in agreement that the assessment of retail floor space requirement should take account of both emerging trends in the retail market and scientific estimates of future demand, based on projected changes in the local population and consumer spending.   

The IHBMA argue that it is necessary to achieve greater certainty that the development plan provides a broad indication of the scale of development envisaged at various locations within the area of the planning authority, as well as the precise boundaries of the core retail area of the relevant city and town centres. 

We are also in agreement that planning authorities, especially in areas within a well developed hierarchy of retail centres, should assess objectively the relevant strengths of the main cities/towns in the area, by carrying out a vitality and viability health check assessment of the performance of their retail areas. 

The outcome of these checks will inform planning authorities as to the steps necessary in relation to encouraging redevelopment, or the emergence of new development options in the city and town centres in line with the sequential approach.

Local authorities, when preparing policies and objectives relating to the location and scale of future developments, should disregard the potential benefits of commercial rates, which may accrue as a consequence of planned retail development.  The effect on local authority finance resources of retail development is not a material land use planning consideration. 

 

THE  VARIOUS  REVISED  DEFINITIONS  AND  GUIDANCE  ON  MORE  SPECIFIC  ASPECTS  OF  RETAILING  CONTAINED  WITHIN  THE  DRAFT  GUIDELINES  FOR  PLANNING  AUTHORITIES  - 

The IHBMA see as critical the strict implementation of exceptional provisions for certain types of large scale retail warehouses.  Given that consumer demand is currently at an all time low, and that there is, in Ireland, already many innovative types of retail units and warehouses, it is difficult to see any arguments for units to be built above the 6,000 sq.m. gross threshold.  

Given that all major cities have an over supply of retail space, particularly in the hardware, DIY, building materials sector, allowing additional units to be built, or an increase in the existing size of units, would have a major affect on the surrounding road network, and have a major impact creating local monopolies, which would inhibit competition. 

Even in the five NSS gateway cities ofDublin,Cork,Waterford, Limerick/Shannon andGalway, only so much retail space can be supported in each category.  If overdevelopment is allowed, you end up with vacant units and shopping centres that then negatively impact on everything around them. 

The international retail industry have called large scale retail warehouse units “Category Killers”, that being a superstore that carries a large selection of one category of goods, such as toys or consumer electrics, because of their ability to wipe out small competitors and dominate an entire category. 

In our sector internationally, companies such as Home Depot, Lowe’s, B & Q, are widely considered to be category killers.  In both theUSand theUK, these stores have reached saturation point and are now cannibalising themselves to survive

 SUMMATION  -

 

The Retail Planning Guidelines have been good forIreland.  When applied correctly, they stop the development of large out of town superstores.  They have allowed for vibrant city and town centres, and the self sufficiency of local villages.  They encourage efficient, equitable and sustainable retail development that is strategic and plan-lead. 

The Retail Planning Guidelines do not hinder competition, in fact they encourage it with a diversity of shops and formats and ensuring that most people have access to local shops.  They have been vital for the independent retail trade and local family owned shops. 

Given the current economic climate and the outlook for the foreseeable future, the IHBMA propose that all figures used to estimate future retail needs must be based on evidence based factual information.  Everyone in the retail sector knows thatIrelandhas reached over capacity and it is now in need of robust methods to ensure that this situation is not exasperated.  All traders should be on a level playing field, and expect the Government, by means of legislation, to provide for a strong and diverse retail sector, with competitiveness and the vitality of cities, towns and villages being championed and maintained. 

Whether change may happen in the future, should be depended upon a demonstration of clear evidence of a need and identification of strategic requirements.  Planning should be based on retail catchment areas that straddle administrative boundaries, and there should be the use of clear concise definitions and methodologies, as outlined in the draft guidelines.   The general presumption against large retail centres located adjacent or close to existing new or planned national roads/motorways is vital.   In all instances due regard has to be given to their potential effect on the existing retail hierarchy and their potential for creating local monopolies which would inhibit competition within local catchment area. 

It has long been the argument in other jurisdictions that large format retailers are progress, and that independent businesses are necessary casualties on the road to economic advancement and prosperity.   However, it is the IHBMA’s contention that any perceived gains are illusionary.  These large format retailers impose a variety of hidden costs on society and contribute far less to economic wellbeing than they take away.

 In the vast majority of cases in other jurisdictions, these stores are built, not to satisfy increased consumer demand, but because the retail chain sees a predatory opportunity to displace sales and other businesses.  As local businesses contract and close, communities loose as many or more retail jobs as they gain from a new superstore.  

As is indicated in the Forfas review on the economic impact of the retail cap (April 2011), a number of top ten global retailers operate formats, which significantly exceed the Irish retail floor space cap.  However, many of these retailers also operate other formats that could operate within the current regulations.  There is evidence also that many retailers are flexible and willing to adjust formats to meet the local market needs.  The international trends in formats suggests retailers are moving towards smaller units in new developments in response to consumer preferences – while retaining existing large stores. 

These big box retailers merely displace local jobs and local business and money that once circulated locally generating economic activity and jobs, ceases to do so.  Although large format retailers present themselves as consumer advocates, their true loyalty is undoubtedly to their shareholders.  Meeting consumer needs is incidental to their main enterprise of hitting growth and profit targets.

 A major consequence of this drive as well as its detrimental effect to existing retailers is the effect on suppliers and manufacturers who have had to sharply curtail investment in product research and development and employee numbers, based on the power of large format retailers.  Most big superstores have their primary procurement offices in theFar East, where they contract directly with low wage factories to produce a growing share of the goods they stock.  As a result, they do not support local indigenous suppliers.  These large multiple retailers also require more rebates, more time to pay, added surcharges and monetary demands for their bottom line.

 The fact that big box multi retailers are bigger and, it is thought, must offer lower prices, is not the case.  They rely on sophisticated pricing strategies to foster the perception among consumers that the prices overall are lower than they actually are.  The only way to ensure competition and protect consumer welfare over the long term is to maintain a market with numerous competitors.

 JIM  COPELAND

CHIEF  EXECUTIVE 

Irish Hardware & Building Materials Association

Elmville

UpperKilmacud Road

Dundrum

Dublin14

Tel – 01 2980969

Email – j.copeland@ihbma.ie