Mr G Lyon
Planning Department
North Norfolk District Council
Council Offices
Holt Road
Cromer
Norfolk
NR27 9EN
By email and post
20 June 2012
geoff.lyon@north-norfolk.gov.uk
Dear Mr Lyon
FORMER FOCUS UNIT, CROMER ROAD, NORTH WALSHAM (LPA REF:
PF/12/0310)
We write to object to the above application on behalf of Sainsbury’s
Supermarkets Limited. Sainsbury’s currently operate a store in North Walsham,
with excellent linkages to the town centre, and have been meeting the grocery
needs of local residents for more than a decade. Sainsbury’s recently invested
in their store, undertaking some refurbishment in November 2010 to ensure that
the store continues to provide an attractive and efficient shopping environment
in line with Company standards.
Indigo have reviewed the above application material, and in particular, the retail
impact assessment prepared by Firstplan submitted in support of the
application. It is our view that there are inconsistencies and inaccuracies in the
retail impact assessment that undermine its reliability. This letter outlines our
key concerns.
Study Area
It is explained at paragraph 5.4 of the Firstplan Retail Report that the Study
Area is based on a 20 minute drive time isochrone from the Waitrose site. It is
further explained that the boundaries of the Study Area have been amended
from the 20 minute drive time to match to the closest postcode sectors, which
are the basis of the household survey underpinning the impact assessment.
While we also do not disagree with the use of postcode sectors to define the
study area or its constituent zones, comparing the Study Area boundaries with
a 20 minute drive time from the Waitrose site shows that the necessary
adjustment was not a minor one. As it is not provided by Firstplan in their Retail
Report, we have prepared an overlay map which is attached as Plan 1. Plan 1
shows that the Study Area boundaries extend well beyond the 20 minute drive
time and in fact, in some places, extend beyond a 30 minute drive time.
Firstplan have created a significantly wider Study Area using postcode
boundaries than drive times. It is our view that the Study Area more closely
correlates with a 25 – 30 minute drive time.
The 20 minute drive time description is misleading and this is significant in the
context of the inflow assumptions. This is explained below.
Inflow
At Table 5, Appendix 10 of their Retail Report, Firstplan has made allowance for
an inflow of £29.8m (£124.5m – £94.7m) when estimating benchmark turnovers
from the Study Area.
Firstplan has made allowance for a further inflow of ‘10% of additional visitor
spending, the justification for which is that the area is ‘a popular tourist
destination’ (paragraph 7.33). At Table 6, Appendix 10 this translates into an
estimated visitor expenditure of £14.4m. It is not clear how this has been
calculated and there is no evidence put forward to justify this level of tourist
expenditure inflow.
Therefore, when estimating capacity for new floorspace (at Table 6), Firstplan
make allowance for an inflow of £44.2m (£29.8m +£14.4m) without providing
any evidence to quantify the amount of inflow expenditure that stores and
centres in the Study Area benefit from. PPS4 Practice Guidance recommends
the use of ‘in-centre’ surveys to establish levels of inflow (paragraph B.28).
Firstplan have not undertaken an in-centre survey nor provide any other
evidence to justify the level of inflow estimated.
We accept that there is likely to be some inflow to the Study Area. However, we
do not expect it will be anywhere near the quantum suggested by Firstplan
which translates into around 30% of total available expenditure. Given that the
Study Area represents around a 25 – 30 minute drive time, and having regard
to the Competition Commission’s findings that foodstores typically draw 85% of
their turnover from a 15 minute drive time, we would expect up to a maximum of
10% inflow to be more realistic. In other words, we would expect up to £14m of
inflow expenditure to be reasonable. Firstplan expect around three times this
level of inflow.
In terms of the proposed Waitrose store, Firstplan expect that the new store will
draw £2.9m from outside of the Study Area; this represents 15% of its turnover.
We do not accept that it is realistic to assume that the modest Waitrose store
proposed, regardless of the fact Waitrose are unrepresented in the Study Area,
will draw this proportion of its turnover from beyond 25 – 30 minutes. While we
acknowledge the loyalty of Waitrose shoppers, this is in an area where it is
suggested by Firstplan themselves that the socio-economic profile does not
match that which Waitrose would typically target and we do not agree that the
proposed store could achieve such levels of attraction. In our view, it is more
likely that a Waitrose store of the size proposed would draw up to a maximum
of 5% of its turnover from beyond the Study Area defined.
On the issue of trade retention, it is further noted that Firstplan have calculated
an existing market share of 79.3% (which, in turn, indicates that just over 20%
of the total available convenience expenditure is being spent outside of the
Study Area). This is not correct as Firstplan include internet spending as part of
Page 2 of 5
spending outside of the Study Area. This is not accurate and when adjusted to
include internet spending reveals trade retention of some 85% within the Study
Area (Table 7, Appendix 10 of the Firstplan Retail Report).
When the market share and inflow figures are adjusted, the capacity
assessment shows that, at best, there is ‘headroom’ capacity of only £1.3m for
new convenience floorspace within the Study Area at 2013. This figure is the
best case as it includes the maximum inflow that we expect. We have adjusted
Firstplan’s Table 6 to demonstrate.
2013
Total available expenditure in catchment area
Current market share of residents (%) (including internet)
£144.3m
85%
Residents available expenditure (excluding internet)
£114.5m
Inflow including tourist expenditure (at 10%)
£14.4m
Total potential expenditure
£128.9m
Benchmark turnover of existing stores in catchment
£124.5m
Turnover of committed Tesco store, Sheringham
£1.2m
Turnover of committed Lidl store, Cromer
£1.9m
Expenditure headroom – constant market share
£1.3m
These figures indicate that there is very limited quantitative need for new
convenience floorspace in the short term. Indeed, it is our view that the turnover
figures for the commitments have been underestimated and that it is more likely
that there will be a shortfall in capacity at 2013. It is not clear how Firstplan
have come to the turnover figures for the Tesco store in Sheringham and Lidl
store in Cromer but it is likely that they are too low.
Clawback
In addition to the £2.9m of inflow, at Table 8, Firstplan assume that the
proposed Waitrose store will divert (or claw back) £3.7m or some 25% of its
turnover from stores outside of the Study Area.
Table 7 shows that the household survey results indicate that only around 15%
of the total available convenience expenditure within the Study Area is being
spent at stores outside it (see above). There is no justification provided as to
why the proposed Waitrose store would achieve, proportionally, such a high
level of clawback. It is our view that this estimate is over-stated and it is more
likely that the Waitrose store would divert around 5% of its turnover from
outside the Study Area.
Choice and Competition
There is no evidence of a lack of choice and competition in the Study Area.
Page 3 of 5
Indeed, Appendix 5 of Firstplan’s Retail Report identifies the location of the
existing convenience provision within the Study Area. This plan confirms that
residents of the Study Area already have considerable choice when it comes to
meeting their convenience goods needs, with seven convenience retailers
having a presence (in some cases, multiple stores) in towns across the Study
Area. This includes three of the ‘big four’ retailers: Sainsbury’s; Tesco; and
Morrisons (only Asda is missing), as well as smaller operators Co-op, Budgens
and Roys, and one discounter, Lidl. Therefore, although Waitrose is not
currently represented, Study Area residents do not currently lack choice when it
comes to grocery needs.
Therefore, in addition to no quantitative need, there is no evidence of a
qualitative need for new convenience floorspace.
Impact
In total, Firstplan expect the Waitrose store to draw close to 40% of its turnover
from outside the Study Area. As explained above, given that the Study Area
extends beyond a 30 minute drive time in places, we do not agree that this is
reasonable. As a consequence, however, it is our view that the likely impact of
the Waitrose store on Sainsbury’s and other town centre stores in North
Walsham has been underestimated. This could have serious implications for
the health of North Walsham town centre which, as Firstplan themselves have
identified, has experienced recent decline. Firstplan should be requested to
provide a more realistic estimation of trade diversion from existing stores.
Sequential Test
It is our view that Firstplan have not undertaken a genuine or thorough
consideration of sequentially preferable sites given that Waitrose will not
commit the investment to construct a purpose built store. Waitrose’s decision
not to invest the required level of money to construct a new store is not a valid
reason to dismiss alternative sequential sites.
Our comments on the sequential site analysis are provided in Table 1 attached.
Overall, the assessment is insufficient to conclusively demonstrate that the
sequential test has been satisfied.
Summary and Conclusions
In summary, the retail impact assessment submitted is not transparent. It is not
a robust or reliable basis on which to assess the impact of the proposed
Waitrose store.
In particular, there is no evidence provided in support of the significant inflow
allowance (£44.2m) and while there may be some inflow, it is more likely that
this would be up to a maximum of £14m. There is also no justification in support
of the clawback expectations.
As such, it is our view that Firstplan have considerably overstated both the
Page 4 of 5
inflow and likely clawback that will be achieved by the store and as a
consequence, the impact on the stores within the Study Area, particularly in
North Walsham, is likely to be considerably greater than that identified by
Firstplan.
The proposed Waitrose store offers little genuine benefit to the residents of the
Study Area who already have considerable choice in the range and offer of
convenience goods (and retailers providing those goods). As noted above,
Waitrose themselves confirm that the Study Area residents are not of a socioeconomic profile Waitrose would typically target. It is clear that Waitrose are not
prepared to commit the required level of investment to develop a purpose-built
store in North Walsham and are simply seeking a low cost option in order to
improve their market share in Norfolk.
In conclusion, the Council cannot confidently assess the proposal in the context
of NPPF policy requirements on the basis of the Firstplan Retail Report as
submitted. PPS4 Practice Guidance requires the preparation of ‘clearly justified,
transparently presented and robustly evidenced’ assessments. This cannot be
said of the Firstplan Retail Report. At the very least, Firstplan should be asked
to provide further workings, particularly in relation to the calculation of actual
turnovers, as based on our analysis of the household survey results, we are not
confident that the calculations are accurate. Further, they should be asked to
provide evidence in support of these assumptions, both, in terms of the inflow to
stores in the Study Area, and the ‘additional visitor expenditure’ in the context of
how this translates into expenditure in foodstores.
We trust that this letter will be taken into consideration in the determination of
the application. Should you require any further information, please do not
hesitate to contact Peter Dowling or me.
Yours sincerely
Sean McGrath
Page 5 of 5
SHERINGHAM
CROMER
A148
HOLT
!
(
NORTH WALSHAM
A149
A140
A47
A1042
A47
A1242
NORWICH
A47
A146
WYMONDHAM
A140
A143
Project
Title
Client
North Walsham
Drive Time Plan
Sainsbury’s Supermarkets Ltd
KEY
Applicant Study Area
1Boundary
LPA
North Norfolk DC
Date:
20.06.12
Project No: 05060002
Drawing No: 05060002/1
Drawn by: PSD
Scale
NTS
N
20 Minute Drive Time
25 Minute Drive Time
30 Minute Drive Time
Indigo Planning Limited
Swan Court
Worple Road
London
SW19 4JS
T 020 8605 9400
F 020 8605 9401
info@indigoplanning.com
Table 1: Sequential Site Assessment
Vicarage Street Car
Park
Former JL Foods
Site
Availability
Suitability
Viability
North Norfolk District
Council has indicated that
this site can be made
available for redevelopment.
There should be no doubt
that the site is available.
That the site is allocated for
mixed use development is
insufficient basis to dismiss the
site as suitable for the
proposed convenience
floorspace. The site is located
in the town centre and in
accordance with the
Government’s long standing
and over-riding ‘town centre
first’ policy objective, new retail
floorspace is most appropriately
located in the town centre.
The requirement for minimal
site works in unlikely to
render a scheme unviable.
This justification clearly
demonstrates Waitrose’s
resistance to genuinely
investing in North Walsham.
It is noted that this site is
allocated for residential-led
development. That the
development would not meet
the Council’s policy objective is
insufficient to dismiss this site
on suitability grounds, as the
same could apply to the
application site which also
forms part of a wider
employment site. This site is
considerably closer to the town
centre than the application site.
It is our view that, with
appropriate measures to
ensure the site was well linked
with the town centre, this site
could be preferable to the
application site.
No justification or reasoning
is provided in respect of the
viability of the site.
North Norfolk District
Council has indicated that
this site is available for
development.
Comment
The site could be potentially
available for a foodstore.
Insufficient evidence has
been provided to dismiss the
site on the basis of suitability
and viability.
The site is located in the town
centre where retail
development is preferred.
The site could be potentially
available for a foodstore.
The site could be suitable for
the proposed development.
St Nicholas
Precinct
No evidence has been
provided that the applicant
has sought to establish the
availability of the retail units.
It is accepted that this site is
likely to be too small to
accommodate the proposed
floorspace. However, without
evidence of a need for the
proposed floorspace, this site
could be suitable to
accommodate small scale
convenience floorspace where
a need was identified. The site
is in the town centre and retail
development is preferred.
Waitrose’ reluctance to
invest the necessary funds
is not sufficient justification
to dismiss the site on
viability grounds. No
evidence has been provided
to demonstrate the site is
not viable.
The availability of the existing
units is unclear as not
investigations have been
undertaken.
The site could potentially be
suitable for a foodstore.
The site could be viable for
retail development, and no
investigations have been
undertaken by the applicant to
demonstrate that it is not.