Retail Impact Assessment outline above the threshold

A retail impact assessment outline for a scheme above the threshold has to do two jobs in one document: pass the sequential test and answer the impact test. National policy requires an impact assessment for retail, leisure and office development outside a town centre where the proposal exceeds a locally set floorspace threshold, and where the plan sets no threshold the default is 2,500 m2 of gross floorspace. The assessment then addresses impact on investment in nearby centres and impact on town centre vitality and viability.

Both tests are sequential in practice. Fail the sequential test and the impact conclusion is irrelevant.

Policy threshold engaged and why

Open with a short section establishing which threshold applies and how the proposal engages it. State the gross floorspace proposed, the net sales area, whether the site is in, edge of, or out of centre by reference to the development plan's defined centre boundaries, and the threshold in the adopted plan or the national default.

Two definitions cause most of the arguments. Edge of centre has a specific meaning based on walking distance from the primary shopping area, and being close to a centre is not the same as being edge of centre. And floorspace thresholds are usually expressed as gross, so mezzanines, storage and back of house count even though they generate no turnover.

Say which centres are in scope. The assessment has to consider the centres whose catchment overlaps with the proposal, which normally means the nearest centre plus any larger centre within the catchment, and the plan's retail hierarchy tells you what each one is meant to be.

A Retail Impact Assessment that skips this section leaves the reader unable to test anything that follows.

Catchment definition and survey data

Define the catchment before estimating anything, and show it on a plan with zones.

The conventional approach divides the catchment into zones based on drive times and administrative or postcode geography, then establishes existing shopping patterns in each zone. Household survey data, where it exists, gives market shares by zone and by destination. Where no survey has been commissioned, the assessment relies on the authority's own retail study, published survey work from the plan evidence base, and a market share assumption derived from them.

Be explicit about the source and the age of the data. A household survey from before the plan was adopted may predate changes in the centre and in online shopping behaviour, and an assessment that relies on it without comment invites a challenge.

Population and expenditure then come from published sources. Use official population projections for the zones, expenditure per head from a published source with the base year stated, and a special forms of trading deduction for online sales with the assumption shown. Every one of those numbers should be traceable, which is the difference between an assessment a reviewer can test and one they can only accept or reject.

Turnover estimates and their basis

Turnover is the engine of the whole document, and it is estimated rather than known.

The standard method multiplies the net sales floorspace of the proposal by a sales density, expressed as turnover per square metre. Where the occupier is known, company average sales densities from published sources are used. Where it is not, a benchmark density for the format is applied. State the density, the source, the base year, and any adjustment made for the specific format, and show the arithmetic rather than presenting a single figure.

The same exercise is needed for the existing centres, because impact is measured against their turnover. That means estimating the turnover of the centre's comparison and convenience floorspace, again by floorspace and density, and it means a floorspace survey or reliance on the authority's own.

Design year matters. The assessment should test the year the development opens and a later year, commonly five years after opening, with expenditure growth and committed development included. Say which years and why.

Trade diversion and its distribution

Diversion is where judgement enters, and where an assessment is most often criticised for lacking reasoning.

Set out, zone by zone, where the proposal's turnover is drawn from: which centres, which out of centre stores, and how much from expenditure growth rather than from existing trade. Then explain the reasoning behind each proportion, using the geography, the format, the existing market shares and the comparability of the offer. A discount food store draws differently from a fashion-led scheme.

Present it as a table rather than prose, with the diversion from each centre both in money and as a percentage of that centre's turnover. That percentage is the number the officer, the objector and the inspector will all look at first.

An illustrative example. A 3,200 m2 gross food store on an edge of centre site estimates a turnover drawn 55 per cent from an existing out of centre store, 20 per cent from the two nearest town centre operators, 15 per cent from a neighbouring town and 10 per cent from expenditure growth. The diversion from the town centre operators, expressed against the centre's convenience turnover, comes out in the single figures. Whether that is acceptable depends on the centre's health, not on the percentage alone. The figures are illustrative.

Impact on centre vitality and viability

Impact is assessed against the centre's current condition, so a health check comes first. Set out vacancy rates and how they compare with earlier years, the retailer representation and any recent losses, footfall where data exists, the pattern of rents and yields if available, environmental quality, the presence of anchor stores, and any investment committed or planned.

Then address the two limbs of the national test separately. Impact on existing, committed and planned public and private investment in a centre means identifying what investment exists, whether it is committed or merely aspirational, and whether the proposal would undermine it. Impact on vitality and viability means relating the diversion figures to the centre's condition, and reaching a judgement about whether the effect is significantly adverse.

That judgement is the point of the document. An assessment that reports numbers and declines to reach a conclusion has not done the job, and an assessment that reaches a conclusion without relating it to the health check has not either. Where an economic case is also being advanced, keep it in a separate Economic Impact Assessment rather than blending job numbers into the retail impact reasoning.

Cumulative impact with committed schemes

The test is not about your scheme alone. Committed development, meaning extant permissions and resolutions to grant that are likely to be implemented, has to be included in the baseline and in the cumulative assessment.

1. List every relevant commitment with its floorspace, location, status and expected opening.
2. Take a view on which are likely to be implemented and justify any exclusion.
3. Add their turnover and diversion into the design year assessment.
4. Report the cumulative diversion from each centre alongside the solus figure.
5. Say which of the two the conclusion rests on.

Authorities challenge commitments both ways. A scheme that excludes a large permission on the basis that it will lapse should say why, with evidence such as the absence of any material start or a live application to renew.

Sequential test conclusion

The sequential test belongs in the same document and should be answered with a search rather than an assertion. Define the area of search, which is normally the catchment or the relevant centres in the plan hierarchy, then identify every site in centre and on the edge of centre that could accommodate the development, including sites in multiple ownership and sites requiring assembly.

For each site, record its area, availability, whether it is suitable for the proposed development with reasonable flexibility on format, scale, car parking and layout, and whether it is viable. Flexibility is the limb that fails most sequential tests: an applicant insisting on a single-storey 3,000 m2 box with 150 surface spaces will find nothing in a town centre, and the authority will say the requirement was drawn to exclude the alternatives.

Set out the search date, the sources used, and the reason each site was discounted, one by one. A Sequential Test for retail written as a table of sites with reasons is far more persuasive than three paragraphs of narrative. Where viability is part of the reason a site is discounted, the inputs need the same discipline as any other appraisal, along the lines of the viability appraisal inputs schedule.

One honest uncertainty. There is no national figure above which impact becomes unacceptable in policy terms, and inspectors have accepted diversion percentages in one case that were found unacceptable in another because the centre was more fragile. Present the health check properly and let the judgement follow from it.

Browse all 66 report types on PlanScope to see which documents a retail scheme is likely to need.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. For specialist technical reports, qualified professional input may be required.

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