Greater Geelong Planning Scheme
Amendment C242 & Planning Permit
Application No. 1527/2010
Statement of Evidence (Economics) of
Anthony Dimasi
MacroPlan Dimasi
MELBOURNE
SYDNEY
Level 4
Level 4
356 Collins Street
39 Martin Place
Melbourne VIC 3000
Sydney NSW 2000
(03) 9600 0500
(02) 9221 5211
BRISBANE
PERTH
Level 15
Ground Floor
111 Eagle Street
12 St Georges Terrace
Brisbane QLD 4000
Perth WA 6000
(07) 3221 8166
(08) 9225 7200
Table of contents
Expert witness details ................................................................................i
Introduction ............................................................................................ iii
Key conclusions ........................................................................................ v
1
Site location, proposed development and context .................................1
2
Trade area analysis ..........................................................................7
3
The competitive context .................................................................. 17
4
Need, demand and likely impacts ..................................................... 21
4.1 Need and demand
21
4.2 Economic Impact Assessment
25
4.3 Net community benefits
28
Appendix 1 ............................................................................................ 31
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Expert witness details
Name and address of expert
Mr Tony Dimasi
Managing Director, Retail
MacroPlan Dimasi
Level 4, 356 Collins Street
Melbourne Victoria 3000
Expert’s qualifications and experience
 Bachelor of Arts (Hons.), University of Melbourne
 Master of Arts, University of Melbourne
My CV is included as Appendix 1 to this statement of evidence. I have extensive
experience in the field of retail economics and analysis gained over the past
30 years, having provided independent advice on numerous retail development
projects and proposals throughout all parts of Australia, to a broad range of
clients.
Expert’s area of expertise
 I have practised as a consulting economic and retail analyst since 1982. During
that time I have worked in all states of Australia and also in New Zealand and
Asia, and have advised on many thousands of retail developments of all types
and sizes.
 I have undertaken specific analyses of the supermarket industry, and of many
hundreds of individual existing and proposed supermarkets, throughout
Australia over the past 25 years.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
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Expert witness details
 I have appeared regularly as an independent expert in state planning courts
and tribunals across all states of Australia and in New Zealand, including:
- The Administrative Appeals Tribunal (AAT) of Australia;
- Independent Ministerial Panels and VCAT in Victoria;
- The Land and Environment Court of New South Wales;
- The Planning and Environment Court of Queensland;
- The State Administrative Tribunal in Western Australia;
- The Environment, Resources and Development Court of South Australia;
- The Liquor Licensing Court of South Australia;
- The Petroleum Products Retail Outlets Board of South Australia;
- The Resource Development Planning Commission in Tasmania; and
- The Environment Court of New Zealand.
 I have also appeared as an expert witness before various government and
ACCC inquiries into the broad retail sector and the supermarket industry in
Australia, including:
- the 1999 Joint Parliamentary Inquiry into the Australian Retail Sector (the
Baird Inquiry);
- the Inquiry into the Competitiveness of Retail Prices for Standard
Groceries
(2008)
undertaken
by
the
Australian
Consumer
and
Competition Commission (ACCC); and
- the 2004 ACT Grocery Inquiry (the Martin Inquiry).
 I have undertaken work on numerous occasions in and around Geelong over
many years, relating to both existing and proposed retail developments.
ii
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
Introduction
I have been asked by Mr John Turnbull of Lascorp to provide my independent
views as to the economic benefits, impacts and implications of the proposal to
develop a new neighbourhood centre on a site situated on the north-eastern
corner of Stoneleigh Crescent and Province Boulevard in Barrabool Hills, a
growing residential area of Geelong.
In order to provide my views, and as set out in the remainder of this report, I
have done the following:
 First, I have considered the subject site, including its local and broader regional
context.
 I have then assessed the likely trade area which a neighbourhood centre on
the site as proposed would serve.
 I have examined the relevant competitive network on which such a
neighbourhood centre might be expected to exert some impact or influence.
 Having regard to all of the above, I have then assessed the likely sales
potential for the proposed neighbourhood centre, as well as the economic
benefits and possible impacts that can be anticipated from the development of
the centre.
In preparing this statement I have inspected the subject site on a number of
occasions and have also undertaken field inspections of all relevant retail activity
centres within the western Geelong area.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
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Key conclusions
i.
Having regard to both the economic/social benefits which are expected to
result from the development, and the economic impacts, I consider that
there is no doubt that the proposed centre will result in a substantial net
community benefit.
ii.
I have reached this conclusion because there is a clearly evident need and
demand for appropriate neighbourhood level retail facilities to be provided at
Barrabool Hills, to serve the rapidly growing and under-serviced population.
iii.
I consider that there will be significant economic benefits that will flow from
the development of such a centre, whilst the trading impacts on the existing
network of activity centres throughout Geelong will be either minimal or
moderate, and will certainly not threaten the future outlook for any existing
or planned centre.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
v
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1 Site
context
1.1
location,
proposed
development
and
The attached Map 1.1 shows the site for the proposed Barrabool Hills
neighbourhood centre, as well as the surrounding local context. The site is
situated on the north-eastern corner of Stoneleigh Crescent and Province
Boulevard, within the rapidly growing suburb of Barrabool Hills, in western
Geelong.
1.2
As is shown on Map 1.1, the area surrounding the site comprises recently
developed new residential dwellings, as well as remaining vacant land on
which further residential development is proposed.
1.3
Adjoining the site to its immediate east is the Barrabool Hills Centre, a
community facility which includes the Barrabool Hills Baptist Church as well
as other community services.
1.4
The suburb of Barrabool is situated on the western edge of the Geelong
urban area, and is bounded to its west by the Geelong Ring Road.
Accessibility to the suburb has been greatly improved since the completion
of the Ring Road in recent years.
1.5
Map 1.2 shows the location of the subject site within the context of the
broader Geelong urban area. Also shown on Map 1.2 are the locations of the
various retail activity centres within the surrounding region.
1.6
The layout and broad composition of the proposed development are shown
on Figure 1.1. The centre will comprise a supermarket of 3,200 sq.m gross
leasable area (GLA) together with a further 845 sq.m of specialty shop
floorspace, making a total development of 4,045 sq.m GLA. One of the
specialty stores, of 200 sq.m, is expected to form part of the supermarket
offer, as a packaged liquor store.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
1
1. Site location, proposed development and context
Figure 1.1
4
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
1. Site location, proposed development and context
1.7
As shown on Figure 1.1, the centre will be centrally located within the
growing suburb of Barrabool Hills, at the intersection of two significant
roads. The development will provide convenient carparking, as well as a
compact neighbourhood centre, which will primarily serve the food and
grocery and weekly convenience shopping needs of residents of Barrabool
Hills.
1.8
The need for a neighbourhood centre to serve the growing Barrabool Hills
suburb has been underlined in the City of Greater Geelong Retail Strategy,
June 2006 (the Retail Strategy). The stated vision of the Strategy, set out at
page 11 of the document, is as follows:
‘Geelong’s retail activity centre network will be developed in a
way that promotes the vibrancy and sustainability of the activity
centre hierarchy; is efficient and viable for retail traders and
other
businesses;
generates
employment
and
income
opportunities; and functions in a manner which focuses on the
needs of residents and visitors to the Region.’
1.9
Also at page 11, the objectives designed to assist in achieving that vision
are set out, as follows:
 To promote economic development and job creation
 To foster small business development
 To encourage the development of interesting, viable and vibrant
retail activity centres
 To improve the range and quality of shopping and business
services provided at activity centres and at other locations
 To improve the amenity of the built environment in activity centres
 To create safe and liveable activity centres
 To encourage accessibility and sustainability as key features of
activity centre policy
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
5
1. Site location, proposed development and context
 To
introduce
activities
such
as
housing
and
mixed
use
development at appropriate locations which support the role of
activity centres
1.10 The need for a neighbourhood activity centre specifically to serve the
growing population of Barrabool Hills (identified in the Retail Strategy as
Wandana) is identified in the Retail Strategy. At page 37, under the subheading Future Directions, the Retail Strategy notes the following:
Neighbourhood shopping centres are the focus for convenience
shopping facilities which are supported by the surrounding
residential neighbourhood.
New
neighbourhood
substantial
urban
centres
growth,
are
and
required
the
where
Strategy
there
supports
is
the
investigation of such a new centre at Wandana, to relieve
capacity constraints on the Highton Centre.
1.11 As is demonstrated in the remainder of this statement, the proposed
Barrabool Hills neighbourhood centre is in accordance with all of the
recommendations and requirements set out in the Retail Strategy.
6
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
2
Trade area analysis
2.1
In order to consider the potential for the provision of a neighbourhood
centre as proposed at Barrabool Hills, I have defined the trade area,
comprising a primary sector and a secondary sector, which I consider is the
area of greatest relevance for analysis. This is both because it is the area
from which the bulk of the retail sales achieved by any new supermarket
provided at Barrabool Hills will be attracted, and it is also the area wherein
the question of trading impacts needs to be most closely considered.
2.2
It would not be the case that all of the anticipated sales of any new
neighbourhood centre at Barrabool Hills will be drawn from this main trade
area. Some business will come from outside the area, e.g. from those who
might be visiting, and some, although a relatively small amount, business
would also come from passing trade.
2.3
The two trade area sectors which I consider will make up the main trade
area to be served by the new neighbourhood centre as shown on Map 2.1,
are described as follows:
 A primary sector which is delineated in most directions by geographic
barriers – the Geelong Ring Road to the west, the Barwon River to the
north and east. To the south it is delineated primarily by roads and the
locations of other competitive facilities. This primary sector, which is by
far the most important trade area sector for the proposed new centre,
essentially comprises the Barrabool Hills suburb.
 A secondary sector, located to the south of the primary sector and
south of Barrabool Road, which comprises the suburb of Wandana. These
residents will continue to direct the majority of their business to the
nearby Highton SC, however, they would be expected to direct a modest
proportion of their food and grocery expenditure to the proposed new
centre at Barrabool Hills, which would be quickly and easily accessible for
them; would offer a significantly larger supermarket than is available at
Highton; and would offer much less congestion than they would have to
endure when shopping at Highton.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
7
2. Trade area analysis
2.4
Map 2.1 also shows the extensive amount of land which remains available
for future residential development particularly within the primary sector.
Continuing development of this land will drive strong population growth
within the primary trade area for many years to come. Table 2.1 details the
existing and projected population levels within each sector of the defined
main trade area.
Table 2.1
Barrabool Hills trade area population, 2006-2026*
Estimated population
Forecast population
Trade area
2006
2011
2013
2016
2021
2026
Primary
4,810
5,730
6,130
6,790
7,990
9,190
Secondary
1,900
1,990
2,030
2,090
2,190
2,240
Main trade area
6,710
7,720
8,160
8,880
10,180
11,430
2006-11
2011-13
2013-16
2016-21
2021-26
184
200
220
240
240
18
20
20
20
10
202
220
240
260
250
2006-11
2011-13
2013-16
2016-21
2021-26
Primary
3.6%
3.4%
3.5%
3.3%
2.8%
Secondary
0.9%
1.0%
1.0%
0.9%
0.5%
Main trade area
2.8%
2.8%
2.9%
2.8%
2.3%
Average annual growth (no.)
Trade area
Primary
Secondary
Main trade area
Average annual growth (%)
Trade area
*As at June
Source: ABS Census 2011; VIC Department of Planning and Community Development, April 2012; Forecast.id; MacroPlan Dimasi
2.5
At Census date in 2011 the population of the primary sector was 5,730, and
had increased from 4,810 at June 2006. The population of the secondary
sector was 1,990, and had increased only slightly since the previous Census,
since the Wandana area is now largely developed.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
9
2. Trade area analysis
2.6
Over the next 15 years, continuing population growth averaging in the order
of 3% – 3.5% annually is projected for the primary sector, with only minor
growth anticipated for the secondary sector. The primary sector population,
however, is forecast to increase to almost 8,000 by 2021, and to in excess
of 9,000 by 2026.
2.7
Table 2.2 and the associated Chart 2.1 detail the key parameters which
define the socio-demographic profile of the population within each of the
trade area sectors. This information highlights the following:
 The trade area population is generally younger than the average for nonmetropolitan Victoria, with this area being quite popular with established
families.
 Average income levels within this trade area are much higher than either
the non-metropolitan Victoria benchmarks or the national Australian
benchmarks. The quality of housing is generally very high, and many of
the families moving into the area are well established, rather than first
home buyers.
 The level of home ownership within the trade area is very high.
 The population is largely Australian born – 83.3%.
 The family structure shows that some 58.5% of all households are
traditional families, i.e. couples with dependent children, and this ratio is
much higher within the main trade area than either the non-metropolitan
Victoria average or the Australian national average.
10
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
2. Trade area analysis
Table 2.2
Barrabool Hills main trade area - socio-demographic profile, 2011
Primary
Secondary
Main
Non-metro Vic
Aust.
Census item
sector
sector
TA
avg.
avg.
Per capita income
$42,670
$41,897
$42,471
$28,382
$34,467
50.3%
47.6%
49.6%
$124,152
$128,442
$125,215
$68,117
$88,205
82.3%
88.6%
83.8%
2.9
3.1
2.9
2.4
2.6
Aged 0-14
20.7%
19.6%
20.4%
19.2%
19.3%
Aged 15-19
7.1%
9.8%
7.8%
6.8%
6.5%
Aged 20-29
10.7%
10.6%
10.7%
10.7%
13.8%
Aged 30-39
11.9%
9.9%
11.4%
11.3%
13.8%
Aged 40-49
16.4%
17.1%
16.6%
13.7%
14.2%
Aged 50-59
15.8%
18.2%
16.4%
14.0%
12.8%
Aged 60+
17.4%
14.8%
16.8%
24.2%
19.6%
37.4
36.8
37.2
40.1
37.9
89.9%
89.4%
89.8%
74.0%
68.7%
Renter
9.9%
10.6%
10.1%
25.2%
30.4%
Other
0.2%
0.0%
0.1%
0.8%
0.9%
Australian born
83.2%
83.4%
83.3%
89.0%
74.0%
Overseas born
Var. from Non-metro Vic benchmark
Avg. household income
Var. from Non-metro Vic benchmark
Avg. household size
Age distribution (% of population)
Average age
Housing status (% of households)
Owner/purchaser
Birthplace (% of population)
16.8%
16.6%
16.7%
11.0%
26.0%
• Asia
2.7%
1.8%
2.5%
1.8%
8.6%
• Europe
9.9%
10.3%
10.0%
7.1%
10.5%
• Other
4.2%
4.5%
4.3%
2.1%
7.0%
57.9%
60.4%
58.5%
41.9%
45.3%
8.6%
9.5%
8.8%
6.5%
7.7%
23.1%
19.9%
22.3%
25.6%
23.0%
One parent with dep't child.
4.2%
5.6%
4.6%
9.8%
9.2%
One parent w non-dep't child.
1.5%
0.8%
1.3%
3.1%
3.5%
Other family
0.2%
0.0%
0.1%
0.8%
1.1%
Lone person
4.5%
3.8%
4.4%
12.3%
10.2%
Family type (% of households)
Couple with dep't children
Couple with non-dep't child.
Couple without children
Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
11
2. Trade area analysis
Chart 2.1
Barrabool Hills main trade area - socio-demographic profile, 2011
Age distribution
30%
25%
20%
Barrabool Hills MTA
Non-metro Vic
20.4%
19.2% 19.3%
Aust. Avg.
24.2%
19.6%
16.6%
13.8%
15%
7.8%
6.8% 6.5%
10%
10.7%
10.7%
16.4%
14.2%
13.8%
11.4%11.3%
13.7%
Aged 30-39
Aged 40-49
16.8%
14.0%
12.8%
5%
0%
Aged 0-14
Aged 15-19
Aged 20-29
Aged 50-59
Aged 60+
Income levels
$140,000
$125,215
Barrabool Hills MTA
$120,000
Non-metro Vic
Aust. Avg.
$88,205
$100,000
$68,117
$80,000
$60,000
$42,471
$34,467
$28,382
$40,000
$20,000
$0
Per capita income
Avg. household income
Country of birth
100%
89.0%
83.3%
Barrabool Hills MTA
Non-metro Vic
Aust. Avg.
74.0%
80%
60%
40%
26.0%
16.7%
20%
11.0%
0%
Australian Born
Overseas Born
Family type
75%
60%
45%
Barrabool Hills MTA
58.5%
25.6%
22.3%
30%
15%
Non-metro Vic
Aust. Avg.
41.9%45.3%
8.8%
23.0%
9.8% 9.2%
4.6%
6.5% 7.7%
1.3% 3.1% 3.5%
0.8%
0.1%
1.1%
12.3% 10.2%
4.4%
0%
Couple with
Couple with nondependent children dependent children
Couple without
children
One parent with One parent with nondependent children dependent children
Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi
12
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
Other family
Lone person
2. Trade area analysis
2.8
Chart 2.2 attached shows the retail expenditure capacity per person for
main trade area residents, as compared in each case with the respective
benchmarks for non-metropolitan Victoria and Australia. The chart highlights
substantially higher than average expenditure per person for the main trade
area population, including across all food categories, as well as on
household goods, apparel and general retail goods.
2.9
Table 2.3 details the total estimated retail spending capacity of the defined
main trade area population, including projections of real growth in this
expenditure capacity to 2026.
2.10 Table 2.4 then presents the projections of retail expenditure volumes by
retail category, with the category definitions detailed below the table. Of
greatest relevance to the Barrabool Hills neighbourhood centre proposal is
the FLG category, which comprises expenditure on take-home food and
groceries as well as packaged liquor. This category will generate the
majority of the new centre’s sales, including in particular for the proposed
supermarket. As shown in the table, main trade area residents are
estimated to be spending $47.8 million on FLG as at June 2012, and this
figure is forecast to increase by 3.4% annually in real terms over the next
15 years.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
13
2. Trade area analysis
Chart 2.2
Barrabool Hills trade area - retail spending per person, 2011/12*
Total retail
$16,000
Barrabool Hills MTA
$14,000
Non-metro Vic
13,846
Aust. Avg.
11,553
11,076
$12,000
$10,000
7,248
$8,000
6,283
6,681
6,598
$6,000
4,793
4,872
$4,000
$2,000
$0
Total Food
Total Non-food
Total Retail
Food
$3,500
2,903
$3,000
Barrabool Hills MTA
2,754
Non-metro Vic
Aust. Avg.
2,631
2,324
$2,500
2,069
2,011
$2,000
1,354
$1,500
1,138
883
$1,000
665
796
685
$500
$0
Fresh Food
Other Food & Groceries
Packaged Liquor
Food Catering
Non-food
$3,000
2,854
Barrabool Hills MTA
$2,500
Non-metro Vic
Aust. Avg.
2,0842,037
$2,000
1,624
$1,500
1,142 1,154
1,018
$1,000
783
590
616
740
754
$500
319
237
312
$0
Apparel
Household Goods
Leisure
*Excluding GST
Source: MarketInfo; MacroPlan Dimasi
14
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
General Retail
Retail Services
2. Trade area analysis
Table 2.3
Barrabool Hills main trade area - retail expenditure ($M), 2012-2026*
Year ending
Primary
Secondary
Main
June
sector
sector
TA
2012
80.7
27.6
108.4
2013
84.1
28.1
112.3
2014
87.7
28.6
116.3
2015
91.4
29.1
120.5
2016
95.2
29.6
124.8
2017
99.2
30.1
129.2
2018
103.2
30.6
133.8
2019
107.3
31.1
138.4
2020
111.7
31.6
143.3
2021
116.2
32.1
148.3
2022
120.6
32.6
153.2
2023
124.9
33.0
157.9
2024
129.4
33.4
162.7
2025
134.0
33.7
167.7
2026
138.8
34.1
172.9
4.1
0.5
4.6
3.9%
1.5%
3.4%
Average annual growth ($M)
2012-2026
Average annual growth (%)
2012-2026
*Constant 2011/12 dollars & excluding GST
Source: MarketInfo; MacroPlan Dimasi
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
15
2. Trade area analysis
Table 2.4
Barrabool Hills main trade area - retail expenditure by product group ($M), 2012-2026*
Year ending
FLG
June
Food
Apparel
catering
Household
Leisure
goods
General
Retail
retail
services
2012
47.8
8.9
12.7
22.3
6.1
8.0
2.5
2013
49.6
9.2
13.1
23.1
6.3
8.3
2.6
2014
51.4
9.6
13.6
23.9
6.5
8.6
2.7
2015
53.3
10.0
14.0
24.8
6.8
8.9
2.8
2016
55.3
10.4
14.5
25.6
7.0
9.3
2.9
2017
57.2
10.8
15.0
26.5
7.2
9.6
2.9
2018
59.3
11.2
15.5
27.3
7.5
10.0
3.0
2019
61.4
11.6
16.0
28.3
7.7
10.4
3.1
2020
63.5
12.0
16.5
29.2
8.0
10.8
3.3
2021
65.8
12.5
17.1
30.2
8.2
11.2
3.4
2022
68.0
12.9
17.6
31.1
8.5
11.6
3.5
2023
70.1
13.3
18.1
32.0
8.7
12.0
3.6
2024
72.3
13.8
18.6
33.0
9.0
12.4
3.7
2025
74.5
14.3
19.2
33.9
9.3
12.8
3.8
2026
76.9
14.7
19.7
34.9
9.5
13.3
3.9
0.4
0.5
0.9
0.2
0.4
0.1
3.7%
3.2%
3.2%
3.2%
3.7%
3.2%
Average annual growth ($M)
2012-2026
2.1
Average annual growth (%)
2012-2026
3.4%
*Constant 2011/12 dollars & excluding GST
Source: MarketInfo; MacroPlan Dimasi
Retail expenditure category definitions:
 FLG: take-home food and groceries, as well as packaged liquor.
 Food catering: expenditure at cafes, take-away food outlets and restaurants.
 Apparel: clothing, footwear, fashion accessories and jewellery.
 Household goods: giftware, electrical, computers, furniture, homewares and hardware goods.
 Leisure: sporting goods, music, DVDs, computer games, books, newspapers & magazines,
stationery and photography equipment.
 General retail: pharmaceutical goods, cosmetics, toys, florists, mobile phones and pets.
 Retail services: hair & beauty, optical goods, dry cleaning, key cutting and shoe repairs.
16
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
3
The competitive context
3.1
Map 2.1 previously showed the locations of the various competitive retail
activity centres, and highlighted the lack of facilities within the Barrabool
Hills and Wandana areas, and particularly within the defined main trade
area. There is only one very small local facility within the area, and that is
situated at the eastern boundary of the trade area, on the corner of
Mt Pleasant Road and North Valley Road in Highton. It is a local facility,
which contains an estimated 750 sq.m of floorspace in seven small shops
including an IGA X-press foodstore.
3.2
Table 3.1 below summarises the various competitive facilities both within
the trade area and in the surrounding area.
Table 3.1
Barrabool Hills schedule of competing retail facilities
Retail
Centre
GLA
Dist. by road from
Major traders
(sq.m)
Barrabool Hills
(km)
Within trade area
Highton Local Centre
750
IGA X-press
2.0
Woolworths (2,300)
2.7
Beyond trade area
Highton
6,500
Belmont
31,500
• Belmont Shopping Village
13,000
• Belmont Road SC
• Remainder
Waurn Ponds SC
Geelong CBD
4.4
Kmart, Coles
1,000
FoodWorks
4.3
17,500
Coles, Aldi
4.5
20,500
Target, Woolworths, Coles
5.8
121,000
7.5
• Westfield Geelong
52,000
Myer, Target, Big W, Coles
• Market Square SC
17,000
Harris Scarfe
• Balance
52,000
Source: Property Council of Australia; MacroPlan Dimasi
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
17
3. The competitive context
3.3
The only activity centre which is of reasonable competitive relevance to the
Barrabool Hills proposal is the Highton Centre, situated on the southern side
of Barrabool Road approximately 3 km to the south-east of the subject site.
3.4
The Retail Strategy classifies the Highton Centre as a neighbourhood centre.
The composition of the centre, and the range of facilities which it offers,
help to make it a broadly based and clearly successful large neighbourhood
centre. Highton Centre is anchored by a Woolworths (Safeway) supermarket
which, however, is clearly undersized for the catchment available to it. The
store is only 2,300 sq.m in size.
3.5
The balance of the centre, which is an attractive street-based centre fronting
the tree lined Village Walk, as well as the southern side of Barrabool Road,
contains an extensive range of specialty retail stores and non-retail services.
In total there are some 45 retail and non-retail businesses provided within
the centre, in addition to the Woolworths supermarket. The main features of
the provision of facilities in the Highton Centre are the following:
- 4 real estate agencies
- Radiology,
pathology
- 2 banks
and
- 2 travel agencies
dental clinic
- A skin & body clinic
- 2 pharmacies
- Optometrist
- 4 cafes and 3 take-away foodstores
- 2 butchers
- A large greengrocer (approximately
400 sq.m)
- A bakery
- 2 hairdressers
- A handful of non-food retail
stores
3.6
Based on a detailed inspection, it is apparent that the Highton Centre is a
thriving neighbourhood centre. It is also quite evident that the centre is
under some pressure, with significant levels of congestion, and a high
degree of difficulty finding a carpark during any peak or even relatively busy
time.
18
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
3. The competitive context
3.7
Beyond Highton, all of the other facilities of neighbourhood centre level or
higher in the retail hierarchy are quite inconvenient for residents of the
defined trade area. The closest facility to the east is the Belmont Centre,
which contains a range of supermarkets but is located around 4.5 km away
from the subject site.
3.8
The closest facility to the north-east is the Safeway store at Newtown, which
is situated a similar distance away, but is quite inconvenient to access.
Residents travelling north from Barrabool Hills need to cross the Barwon
River via a single lane bridge, which often involves queuing, then travel
along Shannon Avenue to Newtown.
3.9
The review of the competitive framework, therefore, highlights the clearly
apparent need for appropriate neighbourhood level facilities to be provided
within the rapidly growing Barrabool Hills suburb.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
19
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4
Need, demand and likely impacts
4.1 Need and demand
4.1
In this section I focus on the need and demand for the proposed
neighbourhood centre, and its likely economic benefits and impacts.
Table 4.1 first sets out my demand assessment for supermarket facilities
within the defined main trade area.
Table 4.1
Barrabool Hills main trade area - Est. supermarket potential*
2014/15
2015/16
2016/17
Main trade area population (as at December)
8,511
8,755
9,001
Main trade area F&G spending, 2014/15 ($M)
45.6
47.3
49.0
70.0%
70.0%
70.0%
31.9
33.1
34.3
60.0%
60.0%
60.0%
19.2
19.9
20.6
6.0%
6.0%
6.0%
1.2
1.3
1.3
20.4
21.1
21.9
Estimated % of take home liquor sales (additional)
10.0%
10.0%
10.0%
Take home liquor sales at MTA supermarkets ($M)
2.3
2.3
2.4
22.6
23.5
24.3
6.0%
6.0%
6.0%
1.4
1.5
1.6
24.1
25.0
25.9
Estimated % of F&G spending directed to smkts
F&G spending available to smkts ($M)
Estimated % of F&G spending retained by smkts within MTA
F&G spending retained by MTA smkts ($M)
Estimated % of sales from beyond MTA
Sales from beyond main trade area ($M)
Total F&G spending available to MTA smkts ($M)
Total FLG spending available to MTA smkts ($M)
Estimated % of general merchandise sales (additional)
Total GM sales at MTA supermarkets ($M)
Total available spending to MTA smkts ($M)
*Constant 2011/12 dollars & excluding GST
Source: Lascorp; Marketinfo; MacroPlan Dimasi
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
21
4. Need, demand and likely impacts
4.2
In the above table, the key steps in estimating the shortfall of supermarket
floorspace for the defined main trade area are the following:

The volume of available food and grocery spending is estimated at
$45.6 million, in 2011/12 constant dollar terms, at 2014/15, which is
assumed to be the first full year of trading for the proposed new
supermarket.

Nationally, in the order of 75% of food and grocery spending is directed
to supermarkets. Typically, this proportion is lower in inner suburban
areas of state capital cities, but higher in outer suburban areas of state
capitals, provincial cities, and rural areas. In this instance I have
adopted a figure of 70%, which I consider is a reasonable, and most
likely conservative, estimate of the proportion of food and grocery
spending likely to be directed to supermarkets.

The main trade area as previously discussed is quite self contained
geographically, and there are relatively few convenient supermarket
options located outside the trade area for these residents – Highton is
the closest, but has a small supermarket offer and suffers from
significant congestion.

I estimate that in the order of 60% of the available supermarket food
and grocery business from the main trade area population can be
retained within the main trade area assuming the new centre is built.

Given the nature of the trade area, I expect that there would be only a
very small proportion of business drawn to the centre from beyond the
trade area – I have estimated this figure at 6%.

In addition to food and grocery sales, which will comprise the bulk of
sales for the subject supermarket, packaged liquor sales will contribute
in the order of 10% of total store sales.

A small proportion of store sales (approximately 6%) would be
generated from general merchandise items (i.e. not food and grocery or
packaged liquor) including the small household goods that are sold in
supermarkets such as crockery, cutlery, gardening items, napery, etc.
22
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
4. Need, demand and likely impacts

Adopting each of the above estimates, the total available expenditure
for the main trade area supermarket is estimated at $24.1 million at
2014/15.
4.3
As is shown in Table 4.1 above, the available spending for the main trade
area
supermarket
then
increases
in
real
terms
strongly,
to
reach
$25.9 million by Year 3, 2016/17. Including inflation, expected to average
2% annually, the nominal dollar estimates of supermarket sales potential
are $25.5 million at 2014/15, increasing to $28.6 million at 2016/17.
4.4
The above analysis shows that there is clear need and demand for the
provision of a new full-scale supermarket within the Barrabool Hills area.
4.5
Table 4.2 below shows the estimated total centre sales potential for the
subject development, factoring in the 645 sq.m of planned retail specialty
space, additional to the supermarket and adjoining packaged liquor store. I
have assumed in these estimates that the bulk of the specialty space would
be allocated to take-home food and liquor, food catering, general retail and
retail services, given the nature and location of the centre. A very small
amount of floorspace may be allocated to non-food retail uses, e.g.
household goods or perhaps even apparel, however, the proportion of space
likely to be devoted to such uses would be minor.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
23
4. Need, demand and likely impacts
Table 4.2
Barrabool Hills - Sales potential by retail category, 2014/15*
GLA
Category
Est. sales potential
(sq.m)
($'000)
($/sq.m)
Supermarket (inc liquor)
3,400
24,071
7,080
Total majors
3,400
24,071
7,080
Food & liquor
200
1,801
9,006
Food catering
170
972
5,718
0
0
0
Major tenants
Retail specialties
Apparel
Household
100
484
4,837
Leisure
0
0
0
General
100
910
9,102
75
300
4,003
645
4,467
6,926
4,045
28,538
7,055
Retail services
Total retail spec.
Total centre - retail
*Constant 2011/12 dollars & excluding GST
Source: MacroPlan Dimasi
4.6
Finally, Table 4.3 shows my assessment of likely market shares of available
retail
expenditure,
both
food
and
non-food,
which
the
proposed
neighbourhood centre would achieve from each of the defined trade area
sectors.
Table 4.3
Barrabool Hills - Estimated market shares, 2014/15*
Retail spend ($M)
Trade area
Food
Non-food
Centre sales ($M)
Total
Food Non-food Total
Non-food
Total
Primary
48.1
43.3
91.4
20.5
2.5
23.0
42.5%
5.8%
25.2%
Secondary
15.2
13.9
29.1
3.7
0.5
4.1
24.2%
3.3%
14.2%
Main TA
63.3
57.2
120.5
24.1
3.0
27.1
38.1%
5.2%
22.5%
1.3
0.2
1.4
25.4
3.1
28.5
Sales from beyond TA
Total centre sales
*Constant 2011/12 dollars & excluding GST
Source: Lascorp; Marketinfo; MacroPlan Dimasi
24
Market share
Food
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
4. Need, demand and likely impacts
4.7
I estimate that across the main trade area the proposed centre would
achieve an estimated market share of 38.1% of available food retail
expenditure and 5.2% of non-food retail expenditure, or an average of
22.5% of total retail expenditure.
4.2 Economic Impact Assessment
4.8
In the previous section of this statement I have indicated that the available
expenditure potential within the defined main trade area can easily support
the existing and proposed supermarket floorspace, as well as total retail
floorspace. In this section I consider the question of likely impacts on the
existing facilities which can be anticipated from the addition of the new
neighbourhood centre proposal.
4.9
Retail developments will usually result in some trading impacts on other
retail facilities within or beyond the main trade area. At the heart of
considerations of trading impacts is whether any other centre or centres, as
a whole, and not individual tenants or businesses, may be negatively
impacted to the extent that their viability is in question, or the population
served by such other centres could suffer some reductions in the level of
service with they enjoy i.e. a net community disbenefit.
4.10 A number of factors need to be taken into account in determining any likely
trading impacts and subsequent consequences, arising from the proposed
development, on other retail facilities both within and beyond the trade
area. The following analysis presents an indicative projection of the
anticipated impacts on other retail facilities in the trade area. Such
projections are indicative only, for the simple reason that it is very difficult
to predict with certainty the precise impact on any one retailer or any other
centre that will result from the change of retail structure serving a particular
area or region.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
25
4. Need, demand and likely impacts
4.11 Any impacted centre or retailer has a number of possible actions which it
may be able to take that may mitigate the extent of the impact or may
eliminate it all together. Expansions and improvements may be undertaken
at other centres throughout the region, and all of those factors can change
the nature of the impact of the new centre being developed.
4.12 It is much more reasonable for the purposes of impact analysis, therefore,
to consider the likely broad changes in competitive circumstances, and in
particular the changes in availability of retail spending for competitive
centres, that can reasonably be expected to result from the proposed
development. These broad changes effectively set the market conditions
within which the competitive centres will operate as a result of this
development, and reasonable conclusions can then be drawn about the
possible impacts of these changes in market conditions.
4.13 Having regard to all of the above, the trade area and competition analysis
for this development, as set out in Sections 2 and 3, highlight the following
key factors which have significant implications for the likely impacts of the
development:
 A substantial and rapidly growing trade area population, which currently
generates almost $50 million of FLG spending.
 A
minimal
provision
of
retail
facilities
generally,
and
particularly
supermarket facilities. There is no modern, full scale supermarket
currently provided within the defined main trade area.
4.14 The clear implication is that there is need and demand for a facility such as
is now proposed on the subject site at Barrabool Hills. There is ample
available retail expenditure to both support the facility and allow all existing
retail facilities within and in proximity to the trade area to continue to
operate successfully and effectively.
4.15 Table 4.4 sets out my assessment of indicative impacts on other retail
facilities within the trade area. In preparing these indicative estimates I
have conducted detailed inspections of all facilities throughout the main
trade area and also surrounding facilities in proximity to the trade area. I
26
Greater Geelong Planning Scheme Amendment C242 &
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Statement of Evidence (Economics) of Anthony Dimasi
4. Need, demand and likely impacts
point out however that no sales data are available for any of these facilities,
thus I have estimated the likely order of sales performance for each of
them, based on my investigations and utilising my experience.
Table 4.4
Barrabool Hills expansion - trading impact assessment, 2014/15 ($M)*
Est. sales
FY12
Est. sales FY15
without
with
expansion expansion
Growth FY12 - FY15
Estimated
without
with
expansion
expansion
$M
impacts
%
Shopping precinct
Highton
65.0
68.6
61.7
5.5%
-5.1%
-6.9
-10.0%
Belmont
235.0
247.9
239.2
5.5%
1.8%
-8.7
-3.5%
Waurn Ponds SC
179.0
194.5
189.6
8.6%
5.9%
-4.9
-2.5%
479.0
511.0
490.6
6.7%
2.4%
-20.4
-4.0%
Total
Other centres**
-8.1
Total
-28.5
*Constant 2011/12 dollars & excluding GST
** Includes all other centres/precincts in Geelong such as Newtown, Geelong West and the Geelong CBD
Source: Lascorp; MacroPlan Dimasi
4.16 The key findings that come out of the analysis presented in Table 4.4 are as
follows:
 The centres which are most likely to be impacted as a result of the
development of a new neighbourhood centre at Barrabool Heights are, in
my view, Highton Centre, Belmont Centre and Waurn Ponds Centre.
 Two of these are large sub-regional centres (Belmont and Waurn Ponds)
and the likely order of impact which each of them will feel is minimal.
 The Highton Centre, which is also the closest to the subject proposal, is
smaller, but is nonetheless a large, clearly successful and broadly based
neighbourhood centre. Much of its composition is non-retail in nature,
with an extensive array of services. Furthermore, the centre already
suffers from some congestion, particularly at peak periods, and the Retail
Strategy has noted the desirability of a new centre at Barrabool Hills
(Wandana) to ‘relieve capacity constraints on the Highton Centre’.
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
27
4. Need, demand and likely impacts
 In any case, given the nature and observed trading performance of the
Highton Centre, the projected level of impact will not threaten its future
performance in any way.
4.17 The
closest
supermarket/foodstore
facility
to
the
new
Woolworths
supermarket is the Safeway Highton store, and I expect that this store will
suffer the highest impact in percentage terms.
4.18 A key implication of the analysis sets out in Table 4.4 is that the new
supermarket at Barrabool Hills will retain FLG expenditure which is currently
leaving the trade area.
4.3 Net community benefits
4.19 The proposed development of a neighbourhood centre at Barrabool Hills site
will undoubtedly result in a range of economic/social benefits. The key
positive impacts are highlighted as follows:
- Greater convenience and diversity of choice for local residents.
The development of a neighbourhood centre at the subject site will
deliver to local residents a close and convenient facility to undertake
their food and grocery shopping, and access a compact range of
supporting
convenience
retailing
and
services.
The
proposed
development will significantly improve the range of retail facilities
available to local residents, and help to reduce their travel times to
access convenient food and grocery shopping.
- Addressing the under-provision of retail floorspace in the main trade
area.
The previous analysis in this report confirm the substantial underprovision of retail and specifically supermarket floorspace within the
defined trade area. The proposed development will go towards
reducing this deficit, and will help cater for current and future
residents’ retail needs.
28
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
4. Need, demand and likely impacts
- Local employment
The development will result in a substantial stimulus to local
employment,
in
terms
of
direct
employment
during
both
the
construction and operational phases, and also indirectly as the
increased expenditure catalyses job creation in related industries. This
is considered in detail in the following section.
Employment stimulus
4.20 Tables 4.5 and 4.6 detail the estimated employment creation resulting from
the proposed neighbourhood centre development at Barrabool Hills. In
estimating the additional employment outlined, I have assumed that some
of the jobs created may be transferred from other locations. Nonetheless, I
estimate that the net gain to employment from the proposed development
will be in the order of 236 jobs.
4.21 Table 4.6 then uses the estimated net level of job creation of the proposed
new centre, together with the ABS Input/Output Multiplier estimates, to
calculate the likely total economic stimulus that can be attributed to the
proposed development.
Table 4.5
Barrabool Hills - estimated future additional centre employment levels
Type of use
Estimated
employment
per '000 sq.m
Supermarket
40
3,400
136
Specialty shops
60
645
39
4,045
175
Total centre
1
Net increase2
Barrabool Hills
GLA
Employment
(sq.m)
(persons)
166
1. Excludes non-retail components
2. Net increase includes an allowance for reduced employment levels at impacted centres, estimated at 5% of the total increase
Source: Lascorp; MacroPlan Dimasi
Greater Geelong Planning Scheme Amendment C242 &
Planning Permit Application No. 1527/2010
Statement of Evidence (Economics) of Anthony Dimasi
29
4. Need, demand and likely impacts
Table 4.6
Barrabool Hills - estimated future additional centre employment levels*
Original stimulus
Direct
employment
(long-term)
Centre employment1
Direct
employment
(const'n period)
Supplier
employment
multiplier effects
166
Construction of project
($10m. est. capital costs)
43
Total
66
232
68
111
Job years2
* Employment totals include both full-time and part-time work
1. Indicates the estimated number of net additional ongoing jobs as a result of the proposed development
2. Indicates the estimated number of jobs over the life of the construction project, for the equivalent of one year
Source: Lascorp; MacroPlan Dimasi
4.22 Based on an estimated construction cost of around $10 million, I estimate
that the construction phase of the project will create some 43 direct
construction jobs, with a further 68 jobs resulting from supplier induced
multiplier effects during this phase (based on appropriate ABS Input/Output
multipliers). Upon completion, the operation of the centre will yield an
estimated 166 direct jobs, which will in turn create an estimated 66 jobs in
the broader economy, again based on appropriate ABS Input/Output
multipliers. Jobs created include both full time and part time positions.
4.23 The new neighbourhood centre will therefore result in a significant stimulus
to local employment throughout western Geelong, and the surrounding
area.
4.24 Having regard to both the economic/social benefits which are expected to
result from the development, and the economic impacts as set out
previously, I consider that there is no doubt that the proposed centre will
result in a substantial net community benefit.
30
Greater Geelong Planning Scheme Amendment C242 &
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Statement of Evidence (Economics) of Anthony Dimasi
Appendix 1
This page has been intentionally left blank.
Tony Dimasi | Managing Director
Retail
Tony studied economics, mathematics and
statistical methods at the University of
Melbourne where he graduated with a
Bachelor of Arts (Hons.) degree and a
Masters degree, completed in 1982. He
also taught economics and statistical
methods at the University for 3 years,
before commencing work in the field of
activity centre analysis, as well as related
economic research, in 1982.
Since 1982 he has undertaken, and
continues to undertake, independent
research on behalf of retailers, shopping
centre owners and managers, property
developers, government and statutory
authorities, as well as a wide range of
other clients. The research includes both
supply and demand analysis, as well as
extensive customer research, investigating
customer behaviour, motivations and
preferences with regard to shopping and
activity centre uses.
Tony has worked across all parts of
Australia and New Zealand, and has
provided advice in relation to virtually
every significant activity centre location in
both countries. The range of projects has
included CBD properties, super regional
centres; regional and sub-regional
centres, district and neighbourhood
centres, homemaker retail facilities,
freestanding stores, and all other retail
formats, as well as commercial and
industrial precincts.
 The




Environment, Resources and
Development Court of South Australia;
The Liquor Licensing Court of
South Australia;
The Petroleum Products Retail Outlets
Board of South Australia;
The Resource Development Planning
Commission in Tasmania; and
The
Environment
Court
of
New Zealand.
He has also appeared regularly as an
independent
expert
in
federal
parliamentary inquiries, including the
Joint Parliamentary Inquiry into the
Australian Retail Sector (Baird Inquiry); in
ACCC hearings, including the Inquiry into
the Competitiveness of Retail Prices for
Standard Groceries in 2008; as well as
Federal and County Court hearings.
Qualifications
 Bachelor of Arts (Hons.)
The University of
Melbourne
 Master of Arts, The
University of Melbourne
He is also a regular conference speaker
and columnist in retail industry
publications.
Tony appears regularly as an independent
expert in state planning courts and
tribunals across all states of Australia and
in New Zealand, including:
 The Administrative Appeals Tribunal




(AAT) of Australia;
Independent Ministerial Panels and
VCAT in Victoria;
The Land and Environment Court of
New South Wales;
The Planning and Environment Court of
Queensland;
The State Administrative Tribunal in
Western Australia;
NSW I VIC I QLD I WA
Level 4
356 Collins Street
Melbourne VIC 3000
P: 61 3 9600 0500
F: 61 3 9600 1477
E: tdimasi@macroplan.com.au
W: www.macroplan.com.au