Review of the Retail Planning Guidelines (2000) in so far
as they relate to the floorspace cap on Retail
Warehouses
Briefing Paper
August 2003
Purpose of this Paper
The Minister for the Environment, Heritage and Local Government has
announced his intention to initiate a review of the Retail Planning Guidelines
(2000) in so far as they relate to the floorspace cap on retail warehouses. The
Retail Planning Guidelines were published in December 2000 and came into
effect from 1 January 2001.
The purpose of the Retail Planning Guidelines is to assist local authorities in
addressing retail development in the context of their development plans and in
assessing applications for planning permission, to guide retailers and developers
in formulating retail development proposals, and to ensure that sustainability in
terms of land use, including access by public transport where feasible, guides the
identification of the preferred location for retail development.
In relation to capping of the permitted size of certain retail developments, the
Guidelines prescribe a maximum area of 3,000 square metres net retail
floorspace for foodstore development, except in the Greater Dublin Area, where
the cap is 3,500 square metres. It is not proposed to review these floorspace
caps at this time.
Cap on retail warehouses
The Guidelines also prescribe a maximum area of 6,000 square metres gross
retail floorspace for large-scale single retail warehouse development. The
Minister proposes to review this floorspace cap, taking account of the need to
ensure effective competition in this sector of retailing and to ongoing
developments in retail formats.
This paper is intended to assist those persons and organisations who may wish
to make submissions in relation to the review, by suggesting some of the issues
which may need to be examined as part of the review.
Original Objectives of Retail Planning Guidelines
The Retail Planning Guidelines have a number of fundamental objectives:

To ensure that in future all development plans incorporate clear policies and
proposals for retail development;

To facilitate a competitive and healthy environment for the retail industry of
the future;

To promote forms of development which are easily accessible – particularly
by public transport – located in such a manner as to encourage multi-purpose
shopping, business and leisure trips;

To support the continuing role of town and district centres – particularly with a
view to reinforcing the public and private investment in urban renewal which
has already been made;

To discourage large retail centres located adjacent or close to existing, new
or planned national roads and motorways due to concerns regarding the
inefficient use of costly major road infrastructure. Such infrastructure is
primarily provided to serve long distance strategic transport requirements and
should not act as a corridor for development which encourages short, car
based trips and congestion.
Need for review of the Retail Planning Guidelines
At the time the Guidelines were issued, it was indicated that they would be
reviewed within 3 to 4 years in the light of experience with their operation. The
Department of the Environment and Local Government has been overseeing the
implementation of the Guidelines since their introduction. As part of this ongoing
process the Department wishes to examine how the guidelines are operating in
relation to the retail warehousing sector of the market, and in this context to
ascertain the views of interested persons and organisations. At this stage, the
Department considers that the issues central to the examination of how the
guidelines are operating in relation to this sector are likely to include:
(1)
The basis on which the Guidelines in so far as they relate to the retail
warehousing sector is being reflected in retail planning strategies and
local development plans;
(2)
The potential impact of the National Spatial Strategy and the need to
ensure that cities and towns have the range of retail facilities that
supports their attractiveness and competitiveness for investment and
population growth;
(3)
The impact of the implementation and interpretation of the floorspace
cap on retail warehouses in the Retail Planning Guidelines on
competition in the retail sector;
(4)
The implications in land use planning terms if the floorspace cap on
retail warehouses were to be amended.
The recent partnership programme “Sustaining Progress” contains a commitment
to work to exert a downward pressure on inflation and to tackle the elements
which make up domestically generated inflation.
The Department’s review of the retail planning guidelines will examine whether
and the extent to which the cap on retail warehouses contained in the guidelines
has had any role in Ireland’s price competitiveness or whether there are more
embedded and structural issues involved.
Taking account of the objectives of the Retail Planning Guidelines and the key
issues that are central to the review of the Guidelines now proposed, questions
that might arise include:

Is there a need for a review of the manner in which the guidelines apply to
retailing formats involving the distribution and sale of bulky goods?

Is the cap on retail warehouses in the Retail Planning Guidelines inhibiting
effective competition in relation to any particular retail sectors?

Is the cap on retail warehouses in the Retail Planning Guidelines having a
negative impact on consumer price inflation?

Is the cap on retail warehouses hampering innovation in the retail sector
in Ireland?

Is the cap on retail warehouses contributing positively to the minimisation
of traffic congestion and the efficient use of transport infrastructure?
Would any change to the cap have a negative impact in this regard?

Could any change to the cap on retail warehouses support the objectives
of the National Spatial Strategy? For example, is it possible that permitting
larger retail warehouse-type formats in or adjacent to the designated
Gateway and Hub urban centres could effectively support balanced
regional development by facilitating the growth of such centres and the
consequent building up of “critical mass”?
Invitation of Submissions
Interested organisations and individuals are invited to make submissions to the
Department of the Environment and Local Government. This will ensure that the
Department has access to the widest possible range of views from interested
individuals and organisations, in the review of the cap on retail warehouses
contained in the Retail Planning Guidelines.
Submissions should be addressed directly to:
Spatial Policy Section
Department of the Environment, Heritage and Local Government
Custom House
Dublin 1
Tel: + 353 1 888 2715 or +353 1 888 2721
Email: david_ryan@environ.ie
Fax: + 353 1 888 2716
Submissions should be submitted to the Department by close of business on
Friday 3rd October 2003.
Background - National planning policy on retail development
Local Government (Planning and Development) General Policy Directive
(Shopping) 1998.
The Local Government (Planning and Development) General Policy Directive
(Shopping) 1998 introduced a floorspace cap on supermarkets. The background
to the introduction of the 1998 Directive was that international experience
showed that large out of town “superstores” or “hypermarkets” were causing
major problems in terms of damaging existing town centres commercially and
damaging the economic infrastructure of smaller towns within a 50 km radius of
such stores. Ireland had not experienced such problems because the general
level of economic activity at the time would not have supported such large-scale
retail stores. However, by 1998, it was becoming evident that this situation was
changing, with plans emerging for a number of hyperstores in the Greater Dublin
Area and in the Cork area.
In this regard, at the time of the making of the 1998 Directive, the Minister
announced the commissioning of a study to examine the relevant issues in an
Irish context with a view to preparing comprehensive planning guidelines on retail
development.
The study and the draft Retail Planning Guidelines prepared by the consultants
Roger Tym & Partners generally confirmed the appropriateness of the Minister’s
decision to set the cap on supermarket floorspace at 3,000 square metres net.
However, in the case of Dublin, the consultants were of the view that the cap was
too restrictive and they recommended that the cap be increased to 3,500 square
metres in the Greater Dublin Area.
At the time of the publication of the draft Guidelines for public consultation in April
1999, the Minister announced that a further study on the economic impact of the
implementation of the draft Guidelines would be commissioned. This further
study by Goodbody Economic Consultants showed that economies of scale in
the food retail sector are exhausted when a store reaches a size of 2,000 square
metres. In other words, the implementation of the cap would not directly impact
on retailing costs.
Current Status of Retail Planning Guidelines
The Retail Planning Guidelines were published in December 2000 and came into
effect from 1 January 2001. The Guidelines are Ministerial Guidelines under
section 28 of the Planning and Development Act 2000. This means that planning
authorities and An Bord Pleanála must have regard to the provisions of the
Guidelines when exercising their planning functions.
The Guidelines contain a cap of 3,000 square metres on net retail floorspace in
foodstores, except in the Greater Dublin Area, where the cap is 3,500 square
metres – having regard to the greater size and density of population in the
Greater Dublin Area. The planning rationale for a restrictive approach to large
foodstores was justified having regard to the important anchor function of
foodstores in preserving the viability and vitality of town centres. In addition, the
advice from economic consultants was that economies of scale in this sector
were exhausted at a store size of 2,000 square metres and that these caps
would therefore not have pronounced anti-competitive effects.
Cap on retail warehouses
The Guidelines also contain a cap of 6,000 square metres gross retail floorspace
on large-scale single retail warehouses, plus a range of other floorspace caps.
This cap was introduced on the basis that large scale retail warehouse
development formats could have an unacceptable local monopoly effect on
smaller shops in town centres and also because such developments attract large
volumes of car borne customers and require a high quality road network with
spare capacity, which was not considered to be available in the Irish context.
The Goodbody Economic Consultants Report “The Impact of the Draft Retail
Planning Guidelines on the Retail Sector”, published at the same time as the
Retail Planning Guidelines were issued, indicated that “Retail warehouses in
excess of 6,000 square metres are unlikely to be acceptable due to their
excessive catchment areas and effect on the surrounding road network and other
outlets of that type within a large area.” The Report also suggested that even if
economies of scale exist in relation to retail warehouse stores, that there was no
evidence that such economies of scale persist up to the level of the cap, i.e.
6,000 square metres. Accordingly, the Report concluded that “the cap is not seen
as giving rise to increased costs and consumer prices.” The Goodbody Report
stated that the cap could be viewed as being somewhat restrictive of consumer
choice, but not unduly so. The Report also expressed concern that, if retail
warehouse stores of up to 14,000 square metres were to be developed, they
could exercise considerable local monopoly power.
References:
Local Government (Planning and Development) General Policy Directive
(Shopping), 1998 (S.I. No. 193 of 1998)
Local Government (Planning and Development) (No. 2) Regulations, 1998 (S.I.
No. 194 of 1998)
“Retail Planning Guidelines – Report submitted to the Minister for the
Environment and Local Government”, Roger Tym & Partners, Planning and
Development Consultants, in association with Jonathan Blackwell & Associates
(April 1999)
“Retail Planning Guidelines – Public Consultation Draft” (April 1999)
“The Impact of the Draft Retail Planning Guidelines on the Retail Sector – Report
submitted to the Tánaiste and Minister for Enterprise, Trade & Employment and
to the Minister for the Environment and Local Government”, Goodbody Economic
Consultants in association with Brian Meehan & Associates, Planning Consultant
and Patrick Lyons, Competition & Management Consultant (November 2000)
“Retail Planning – Guidelines for Planning Authorities” (December 2000)
Local Government (Planning and Development) General Policy Directive
(Shopping), 1998 (Revocation Order), 2001 (S.I. No. 1 of 2001)