Retail Impact Assessment: the impact test sections

A Retail Impact Assessment answers two questions and only two. Will the proposal harm existing, committed and planned investment in a centre within the catchment, and will it harm the vitality and viability of a town centre to a degree that policy treats as unacceptable. Everything else in the report, the catchment zones, the turnover estimates, the diversion table, exists to answer those. National policy sets the trigger at a locally adopted floorspace threshold, or 2,500 m² gross where the local plan has not set one.

The two limbs of the impact test

The first limb looks at investment. If a centre has a committed food store, a consented mixed use scheme or an allocated site with a development partner in place, the assessment must consider whether the proposal would undermine it. That means finding out what is actually committed, which usually involves reading the council's own committee reports and the register of recent permissions rather than relying on a market report.

The second limb looks at the health of the centre itself, expressed through trade. It asks whether the diversion of turnover away from the centre would be large enough to count as adverse, judged against the centre's current condition.

National policy directs refusal where the assessment shows a likely significantly adverse impact, which is a higher bar than showing some impact. Every reasonably sized store draws some trade from somewhere. The report has to engage with degree.

Note that the impact test is separate from the sequential test, which asks whether a suitable sequentially preferable site exists. The two are often bound in one document and are frequently confused, and the retail sequential test has its own method and its own case law.

Setting the study area and catchment zones

The study area should follow how people actually shop, not the administrative boundary. Practitioners normally divide the catchment into zones based on drive times, postcode sectors or the geography used in an existing household survey commissioned for the council's retail study.

Using the council's own retail and town centre study is the single most useful decision an applicant can make. It fixes the zones, the population projections and often the market shares, which removes an entire category of argument. Where the study is more than a few years old, update the population and expenditure figures and say how.

The report should state, for each zone, the population, the expenditure per head for the relevant goods category, the projection year and the source. Convenience and comparison goods are assessed separately because they behave differently, and mixing them produces a meaningless total.

Turnover, trade draw and the diversion table

Turnover for the proposed store is normally estimated from net sales floorspace multiplied by a sales density for the operator or for the format, adjusted for the year of assessment. Where the operator is unknown, use a format average and say so.

The diversion table is the heart of the report. It allocates the proposed turnover across the existing stores and centres it will draw from, zone by zone, with a stated rationale for each allocation.

Officers and their retail advisers test the diversion assumptions first, because that is where the answer is decided. Spreading diversion evenly across a wide area to keep every individual impact figure low is a familiar tactic and a familiar reason for a report to be rejected.

Illustrative example: a proposed food store is estimated to trade at a given turnover in the design year. The assessment allocates 45 per cent of that turnover as diverted from two stores in the nearest town centre, 30 per cent from an out of centre store on the ring road, and the remainder from smaller centres and from expenditure growth. Expressed against the convenience turnover of the town centre, the diversion produces a single percentage figure that the conclusion then tests against the local threshold. The figures are illustrative and would need local survey evidence.

Cumulative impact with committed schemes

A proposal is not assessed in isolation. Where other unimplemented permissions exist in the catchment, the assessment should model the cumulative position, because the combination can cross a threshold that neither scheme crosses alone.

Finding the commitments takes work. Search the planning register for retail and mixed use permissions granted in the last few years across every authority in the catchment, not just the host authority, and check whether they remain extant. Cross-boundary commitments are the ones most often missed, and they are the ones neighbouring councils raise in consultation.

Health of the centre indicators

The impact percentage means little without a picture of the centre's condition. A centre with strong occupancy, rising rents and an active market can absorb a level of diversion that would damage a fragile one.

Standard indicators include the vacancy rate compared with earlier years, the mix and diversity of uses, the presence of national and independent retailers, footfall where counts exist, rental levels, the amount of retail floorspace in the centre, and environmental quality including accessibility and the physical state of the fabric.

Gather them from the council's own monitoring where it exists, and from a dated street survey where it does not. Photograph the frontages and record the date. An officer can accept a survey they can check. They cannot accept an assertion that a centre is trading healthily.

Writing the conclusion against the local threshold

The conclusion must do three things: state the impact figures, state the condition of each affected centre, and reach a reasoned judgement on whether the impact crosses the policy threshold for an adverse effect.

Avoid the two common endings. One is a bare arithmetic conclusion that a percentage is below some conventional level, as though a national threshold existed. It does not. The other is a qualitative paragraph that never engages with the numbers at all.

Where the local plan sets its own threshold or its own impact test wording, quote it and answer it directly. Where the plan is silent, the national default of 2,500 m² gross applies to the requirement for an assessment, and the judgement on significance remains a matter for the decision maker.

The narrative then feeds the wider case. A Retail Impact Assessment sits alongside the transport evidence, and the trip generation assumptions in both should match, in the same way that the mode share assumptions in our note on Travel Plan targets and how to evidence them have to match the transport modelling.

PlanScope drafts the report structure around your scheme details and flags where survey and expenditure data is still needed, and the full list of report types shows what else a retail scheme usually triggers. For specialist technical reports, qualified professional input may be required.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it.

PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.