The Scottish Government

ITEM

SOURCES

COMMENT

Spatial study area/ catchment area

Can be defined by postcode, isochrones or other relevant boundary (possibly the local planning authority area or local plan area if appropriate isochrones can be manually calculated) but more often they are computer generated from data agencies*.

Catchment areas should really be an output of a retail study, not a starting input. If retail studies commence with a catchment area, it tends to pre-judge the inputs and calibrations in the study. It is preferable for the starting point to be a general study area, from which the details of catchment can be appraised.

Population

Data agencies can digitally map the study area by post code or sub post code and produce census population counts: they can also forecast possible future change. Local planning authorities also have this level of data, and might have a closer analysis of likely population growth, based on more detailed local housing projections.

Modern population sources are also very informative on socio demographic characteristics in the area, using census information and also other added information which is compiled and inputted by the data agencies.

Data will depend upon Base / Test years (see below) and there might be potential divergence of opinion on population growth assumptions.

Improvement in GIS sources could assist the geo-demographic plotting of population data.

Base / Test years

The analyst should select and agree with other parties the Base year for population levels (and also expenditure/ floorspace/ turnover - see below).

Base should be the current year or most recent year for which sound data is available. The test year should reasonably reflect timescale for planning process, construction and a period for trading patterns to settle.

Expenditure

Data agencies can provide expenditure per head estimates for given areas (same approach as population above). Expenditure categories are an important element - normally convenience (food) and comparison (non food) goods. Deductions can be made for special forms of trading such as internet and mail order, which do not utilise retail floorspace.

Different source and projection methods from different agencies. Data Consultancy (URPI) commonly used in the past and other agencies now providing the same kind of data from similar sources. Categories frequently being split to show different spending comparison spending patterns on higher order (fashion etc) and lower order (bulky etc ) goods.

Expenditure Growth

The expenditure per head average for base year needs to be projected to test year, using rates of growth (or decline) based upon national factors. Growth in comparison is higher than convenience.

This element can attract a wide range of different assumptions about annual growth rates for convenience and comparison goods expenditure.

Floorspace

Essential to have best possible data for the gross and net trading floorspace areas for the proposed retail element and the existing retail floorspace in the study area - including committed space.

Floorspace is one of the most fundamental inputs, as spatial, locational and physical implications of retailing all impinge on land use planning decisions. But there is still sparse information on existing levels of space in centres.

Turnover

Based upon estimates of expenditure flow to a store/centre, or the estimate of density of turnover per sq metre of space, the existing and proposed turnover levels are vital to the estimate of economic impacts of new retail space.

Another element is whether to build in an allowance for existing retail floorspace to increase its turnover density over time. This might be seen as interfering with market forces.

Another key area for different interpretations of retail performance, depending on which technique is used for estimates. Also, turnover is an element where retail businesses are sensitive to publication of commercially confidential information. Data Agency sources on national average turnover densities are improving.

Commitments

Noted above - the need to build in likely floorspace changes due to consents already granted.

Subject to different interpretations, as some consents are openly defined and it is unsure what retail format they will take; and some "commitments" can be long term extant consents with no tangible market interest in trading.

BASIC STEPS

COMMENTS

1. Study Area Details:
As noted above, the overall study area will be defined by agreement between the parties. It can be based upon drive time isochrones, local planning authority areas or other geographic areas defined by postcodes. It is then important to assemble population and expenditure information according to the defined study area and to analyse the overall levels of convenience and/or comparison expenditure for the overall study area. The expenditure levels can then be expressed in the fixed pricing year (to remove the effect of inflation) and can be calculated for the base year and the test year (see comments on expenditure growth).

Starting with a general study area allows the assessment to relate to an overall sphere of retail activity. This can assist Local Authority planning areas, but the main purpose is to focus in on patterns within that study area which can start to indicate an actual catchment for different retail facilities.

2. Calibrations on the Study Area to Assess 'Catchment Areas'
Not all retail assessments will undertake this step, but it is advisable to draw upon some reliable source information to assess levels of expenditure flow from different parts of the study area to different centres/ retail destinations which effect the study area (the centres may be within or outwith the study area).

This can be done by way of trade draw assessments which look at the proportions of trade to different centres from different subsections of the study area. This can also be linked to a market share analysis for any particular centre (looking at the areas where different proportions of its turnover are drawn from). There is more guidance on trade draw and market share in the 1991 Drivers Jonas report.

In recent retail studies there has been an increased usage of household shopper surveys (often by telephone sample) in order to gain a clearer understanding of the dynamics of the study area and a clearer picture of the actual catchment area for different retail centres. From survey data, it is possible to approximate the level of allegiance from different pockets of the study area to different retail destinations. This can build up an estimate of overall turnover per centre; derived from expenditure resident within the study area.

This kind of analysis has traditionally been carried out by tabulations of trade draw across the study area. More sophisticated versions of this can relate to the surveyed trading patterns and spreadsheets are commonly used to produce a form of gravity model. However, it is important in the presentation of this material (particularly in planning application/ appeal cases) to present summary data in a clear format such that the overall modelled expenditure levels are summarised in an understandable manor.

3. Model A Scenario of Expenditure/ Turnover Linked to the above steps on calibrating the study area to reflect more realistic catchment areas, the important output is a picture for the base year, in terms of the amount of resident spend in the different sub zones of the study area flowing to the different centres and therefore a picture of the overall turnover of the centres and retail destinations which relate to the study area. This may involve some further assumptions about further turnover from outwith the study area (perhaps tourist spend as well) in order to give an overall estimate of turnover.

Once the base year turnover levels are set out, the expenditure growth levels identified in Step 1 can be applied, in order to apply growth to the turnover levels in the study area and to present a reasonable estimation of the levels of expenditure and retail turnovers in the test year.

This is an important step, which should show surplus levels of fresh expenditure flowing to each centre in the future test year. From this, one can make assumptions about what share of that turnover should be allowed to flow to existing floor space, permitted floor space and what residual amount could be serviced by new levels of retail floor space. This analysis can depend upon assumptions of turnover growth allocation to existing space, changes in special forms of trading such as catalogue and e-retail (internet) and other factors. One of the key inputs at this stage will be assumptions about turnover density per sq. m. on existing and proposed floor space.

Another variation at this stage is to look at forecast changes by different categories of expenditure. For example, some assessments have split non food goods between higher order fashion expenditure and bulky goods utility expenditure. This can give a different picture for town centre retail space and space which is more appropriately located in out of centre retail warehouse formats.

4. General Capacity Assessment
For local planning authorities involved in general capacity assessments and for those promoting retail studies based upon general capacity, this stage can present an overall picture of the base year and the test year and the different levels of expenditure available over the period of intervening time. The levels of growth which prevail over the period of time can either be loaded upon the existing retail outlets, or presented as a possible scenario for further retail floor space growth. In this exercise, different assumptions can be employed about different centres which have relative importance in the planning hierarchy.

Some capacity assessments find that falling population and relatively static expenditure growth (particularly in convenience goods) suggest there is little scope for further floor space on the basis of expenditure growth alone. However, other qualitative factors may be brought into the analysis at this stage.

See notes above, related to the modelled scenario of expenditure/ turnover.

From other points of feedback in this study, it appears that this stage of any capacity assessment requires a careful look at the hierarchy and status of different 'centres' within the study/ catchment area. This would depend upon policy judgements and qualitative aspects relating to existing established city/ town centres and emerging new centres which are well located in terms of accessibility, infrastructure and mixed services.

5. Remodel Test Year to Show the Effects of Proposed New Retail
Whether this step involves a LPA modelling different scenarios for growth in floor space/ turnover in different centres, or a consultant promoting a proposed retail scheme, the modelled expenditure, floors pace and turnover levels can be reassessed, using the base line data from the survey modelled catchment areas and also employing the judgement of the analyst, to build in new levels of floor space in different locations, with estimates of the ways in which this new floor space will gather its turnover from different sources:

• By absorbing the levels of expenditure growth observed within the catchment area
• By diverting expenditure from existing retail outlets from within the catchment area
• Possibly by changing the dynamics of the catchment area to such an extent, that the new retail attraction will increase the sphere of influence and extend the study area to bring in more expenditure from further afield.

The result of this modelled future scenario will be an estimate of the proposed turnover of the new shopping facility, set against the existing turnover levels of existing facilities. In the retail assessment presentation, this is often detailed as a table of retail impact levels on existing facilities.

At this stage, it is important to demonstrate which categories of goods and expenditure the impacts apply to. For example, a new superstore based mainly on convenience goods trading will only have an impact on convenience goods trading in the town centre. Often, this may be a numeric expression of impact on the town centre turnover. However, it is actually an impact level on the convenience goods element of the town centre turnover which may be a small fraction of the overall centre turnover, because of the predominance of comparison goods.

In other cases, it might be apparent that the new out-of-centre floor space is primarily fashion comparison goods and this might be targeted at the main stay of the town centres retail trading, if it is established as a higher order fashion retailing centre.

Complications can arise where the new floor space is not yet closely defined in terms of convenience or types of comparison goods trading. In cases where out of centre retail warehouses are proposed, this often raises questions of whether the developer is prepared to take conditional restrictions on floor space, specifying bulky goods. In some cases retail warehouses have been free of such conditions and have been built with unrestricted (High Street goods) formats.

6. Interpreting the Actual Impacts of the Estimated Adjusted Turnover Levels
There has been much discussion about the meaning of 'impact'. In this case, the study team believes that a final scenario of adjusted turnover levels should be subject to a separate assessment of the meaning of these adjustments and whether this actually creates a tangible impact in physical or economic terms which is of importance to a land use planning decision. This will necessitate a close look at the centres which sustain an impact and whether these are important centres. It will also involve a detailed look at the vitality and viability of the relevant centres and whether they can sustain a level of impact, without upsetting retail planning interests of acknowledged importance. Also, it should look at the form of the new proposed retail element and whether this, in itself introduces retail planning advantages to the local hierarchy which have to be weighed in balance to the overall impacts elsewhere.

As well as the points of clarity noted above under Stage 5, once the final impact has been clearly defined and isolated, it is important to look at the meaning, in land use and economic planning terms. This stage will depend upon the relative strength of the centre. It will also be important at this stage to be clear whether the proposed new retail is in contention with the established hierarchy of important centres which are worthy of protection under established planning policies. This is addressed elsewhere in this study.

Another key point is whether the retail impact has been assessed for floor space proposed for a site which is in-centre or edge-of-centre. In these cases, it may not be necessary to take the 'impact' assessment any further, if the locational context suggests that the impact is an 'internal impact' within an established or extended centre.

7. Other Useful Gauges
In parallel with all the steps above, there are other inputs to the methodology which can be useful gauges, to assess the reality of the local situation being modelled by a way of expenditure levels, surveyed shopping habits and flows of turnover to different locations. Some of these include the following:

• Assumptions on turnover density per sq. m.
• Assumptions on the allowance of existing floor space to gain an increase in turnover density per annum
• Over/ under trading - a view from the above points, on whether existing facilities are perhaps trading above a reasonable average and can therefore sustain higher levels of impact, without detriment to the retail facility or to the shopping public.
• A comprehensive vitality/ viability 'health check' on the Town Centre.

This is the important final stage of any retail impact assessment. In particular, the final bullet point draws attention to the final vitality/ viability 'health check'. Some planning authorities have carried out these studies. However, this is often at a late stage, once a proposal is perceived to threaten a town centre. It would be more helpful to see these health checks being carried out on a regular rolling programme of updates. This could include key indicators including market activity, rental levels, yields, pedestrian flows, changes in retail faciers, and ideally some form of feedback from traders/ town centre managers reports on key performance indicators such as relative turnover levels on a time series basis (see improved inputs heading below)