Retail sequential test or retail impact assessment
Both tests apply to out of centre retail and both can refuse a scheme. Here is what each asks, what evidence it needs and where they diverge.
The retail sequential test vs impact assessment question confuses people because both sit in the same policy chapter and both apply to out of centre retail. They ask entirely different questions. The sequential test asks where the development should go. The impact assessment asks what it would do to existing centres if it goes where you propose. Passing one tells you nothing about the other, and a scheme can fail on either.
For a developer promoting an out of centre retail or leisure scheme, that means budgeting for two pieces of work with different methods, different consultants in some cases, and different failure modes.
Two tests, two questions
The sequential test flows from the town centre first principle. Main town centre uses should be located in town centres, then in edge of centre locations, and only then out of centre, with preference given to accessible sites well connected to the centre.
The impact test applies to retail, leisure and office development outside town centres that is not in accordance with an up to date development plan, above a floorspace threshold. It asks about effects on existing, committed and planned investment in nearby centres, and about effects on town centre vitality and viability.
The consequence of failure differs too. Framework policy indicates that an application failing the sequential test or likely to have a significant adverse impact should be refused. That makes both of them gateway tests rather than factors in a balance.
The sequential approach and site availability
The test requires a search for sequentially preferable sites, applied with flexibility on format and scale. Flexibility is the word that does the work and the word most often ignored.
An applicant promoting a 4,000 m² store cannot simply say that no 4,000 m² site exists in the centre. The question is whether the development could be accommodated in a different format, on a smaller footprint, over two floors, or across a disaggregated arrangement where that is reasonable. What counts as reasonable flexibility is contested and is decided case by case.
A defensible search sets out:
- The area of search and the reason for it, usually related to the catchment the scheme is intended to serve.
- The date of the search and the sources used, including the authority's own land availability evidence.
- Site size and format parameters, with the flexibility applied stated explicitly.
- Every site considered, with availability, suitability and viability addressed for each.
- The reason each sequentially preferable site was discounted.
Availability, suitability and viability are three separate tests and each has to be answered. A site that is available and suitable but demonstrably not viable can be discounted, but the viability argument needs evidence rather than assertion.
A standalone Sequential Test (Retail) is the usual vehicle where the work is substantial, and the conclusion should be written so the officer can adopt it.
Defining edge of centre and out of centre
The definitions matter because they decide which sites you must consider.
For retail purposes, an edge of centre location is one that is well connected to and up to 300 metres from the primary shopping area. For other main town centre uses, the measurement runs from the town centre boundary rather than the primary shopping area. Out of centre is anything beyond that which is not within the centre.
Two practical points follow. Walk the route, because a site 250 metres away across a dual carriageway with no crossing is not well connected in any sense that matters. And check the adopted policies map for the defined primary shopping area, because the boundary on the map is what counts, not a general impression of where the shops are.
The floorspace threshold, national and local
The national default threshold for the impact test is 2,500 m² of gross floorspace, applying where the local plan has not set its own.
Many authorities have set lower thresholds, sometimes considerably lower, reflecting the size of their centres. A threshold of a few hundred square metres is not unusual in an area of small market towns, and it catches schemes that would be well below the national figure. Check the adopted plan before assuming the default applies.
Where a scheme sits below the threshold, the impact test is not required. The sequential test still is, because it has no floorspace threshold.
| Feature | Sequential test | Impact assessment |
|---|---|---|
| Question asked | Could it go somewhere more central | What would it do to nearby centres |
| Floorspace threshold | None | 2,500 m² nationally, or a lower local figure |
| Applies to schemes in an up to date plan allocation | Generally no | Generally no |
| Core evidence | Site search with availability, suitability, viability | Catchment analysis, turnover, trade diversion, centre health |
| Consequence of failure | Refusal indicated by policy | Refusal indicated where the harm to centres is serious |
Impact on investment and on vitality
The impact test has two limbs and they are commonly run together when they should be answered separately.
The first is impact on existing, committed and planned public and private investment in a centre or centres in the catchment. That means identifying actual schemes, including permissions granted and allocations being brought forward, and assessing whether the proposal would undermine them. It requires enquiries of the authority rather than desk assumptions.
The second is impact on town centre vitality and viability, including local consumer choice and trade in the centre and the wider retail catchment. The assessment period runs up to five years from the time the application is made, extended for major schemes to be delivered over a longer period.
The qualifier matters. Some trade diversion is inevitable and is not a reason for refusal. What policy resists is diversion at a level and in a pattern that damages a centre's function.
Evidence and catchment analysis
The evidence base for the impact test is a different discipline from a site search.
It normally includes a defined catchment, a household survey or an equivalent basis for existing shopping patterns, a turnover estimate for the proposal derived from company average sales densities where available, a trade draw analysis apportioning that turnover to the centres it would come from, and a health check of each affected centre covering vacancy, diversity of uses, pedestrian flows and investment.
Health check data is often available in the authority's own retail study, which is the best starting point because it is evidence the authority has already accepted. Where the study is dated, expect to update it, and expect an objector to attack whichever position suits them.
An Economic Impact Assessment can sit alongside this to set out employment and investment benefits, though it does not answer the impact test itself. A Retail Impact Assessment is the document that does.
Why passing one does not satisfy the other
A scheme can clear the sequential test because no sequentially preferable site is available, suitable and viable, and still fail the impact test because the trade it draws would damage a fragile centre nearby.
The reverse happens too. A scheme can show a modest impact, comfortably below the level at which policy treats impact as harmful, and still be refused because a suitable edge of centre site was available and the applicant would not flex the format to use it.
Run both from the start. The most expensive mistake on these schemes is commissioning the impact work first, because it is the more interesting analysis, and discovering a sequentially preferable site halfway through.
One honest observation. The flexibility expected in the sequential search is the single most argued point in retail planning, and there is no settled answer. Where the outcome turns on it, get the position tested at pre-application and in writing before the evidence base is built.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it, and verify the current Framework edition, the national threshold and any local threshold at the time of writing.
If you are scoping the evidence base for an out of centre scheme, browse the report types and start a draft. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
Does the retail sequential test have a floorspace threshold?
No. The sequential test applies to main town centre uses proposed outside a centre regardless of size, whereas the impact test only applies above a floorspace threshold. That is why a small out of centre retail scheme can need a sequential assessment while needing no impact work at all.
What is the national impact test threshold?
2,500 square metres of gross floorspace, which applies where the local plan has not set its own figure. Many authorities set considerably lower local thresholds reflecting the scale of their centres, so check the adopted plan before assuming the national default applies to your scheme.
What counts as edge of centre?
For retail purposes, a location well connected to and up to 300 metres from the primary shopping area. For other main town centre uses the measurement runs from the town centre boundary. Well connected is a real test, so walk the route: a site across a dual carriageway with no crossing will not qualify.
How much flexibility must an applicant show in the sequential search?
Enough to test whether the development could be accommodated in a different format, at a smaller scale, over more than one floor or in a disaggregated form where reasonable. What is reasonable is decided case by case and is the most argued point in retail planning, so establish the position at pre-application in writing.
When is retail impact serious enough to justify refusal?
Some trade diversion from a new scheme is inevitable and is not a reason for refusal on its own. Policy resists diversion at a level and pattern that would damage a centre's function, measured across the assessment period of up to five years, or longer for major schemes delivered over an extended programme.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.