Wednesday 10 September 2008

Shop restrictions may be lifted by next year

ANALYSIS: Coming soon (maybe) to a town near you... a hypermarket so big that your weekly grocery shopping doubles as exercise, writes Laura Slattery .

Restrictions on the size of retail outlets that date from the early 1980s are set to be lifted possibly as early as next year if the Government implements recommendations made by the Competition Authority.

The existing retail planning system is flawed, the authority says in a report published this morning.

It finds that the system serves the interests of existing retailers rather than encouraging new market entrants, who (the theory goes) would snatch business and power away from the big players through the most reliably consumer-friendly method around: lower prices.

The cap of 3,500 square metres on grocery stores in the greater Dublin area and 3,000 square metres on stores outside the area should be removed, the report recommends.

These restrictions limit shelf space and reduce competition between the branded groceries on the shelves - in other words, consumers are obliged to buy the only low-fat butter spread in stock where under a looser planning system they could choose from, say, six.

An effective cap of 1,000-1,500 square metres on the size of discount food stores like Aldi and Lidl should also be abolished, says the Competition Authority’s chairman Bill Prasifka.

“We think that having a separate sub cap simply is not justified and it discriminates against the discounters. It characterises the discounter as being less desirable, which we think sends out the wrong signal,” he told reporters this morning.

It is little wonder that shoppers are “voting with their feet”, he said.

“We all see the queues of people going to Northern Ireland. I’m not saying we can stop that with one change of the planning system, but...”

Retailers applying for planning permission “obviously” shouldn't have to prove that their development will “not have a material adverse impact on the vitality and viability of any existing town centre”, as they must do under the current retail planning guidelines, he added.

This guideline simply protects existing traders and is at odds with the essence of competition. It also reduces choice and value for consumers, the report finds.

Consumers’ opinions of the current rules will vary depending on whether they are sick of paying high prices to the one grocery store that operates in their town or whether they are more wary of the character of their town being destroyed by new hypermarkets.

The Competition Authority stresses that it doesn’t want to abolish the planning system. It simply wants to enable planners “to be able to do their job” more freely. When taking account of social and environmental factors in making planning decisions, planners should also consider the rights of the consumer to more competition.

It all sounds fine, as long as you trust your local planners and An Bord Pleanála.

Of course, removing the store size caps doesn’t automatically mean a 6,000 sq m grocery behemoth is going to be erected at the end of your driveway. But with IKEA landing in Ballymun next autumn and the likes of Tesco developing the non-food side of its business through more large format stores, it seems likely that the first thing shoppers will look for in the future is not a basket, but a map.

Irishtimes.com

www.buckplanning.ie

No comments: