Retail Impact Assessment
A Retail Impact Assessment evaluates the potential effects of a proposed retail development on existing town centres and their vitality and viability. The NPPF requires an impact assessment for retail and leisure developments outside existing town centres that exceed a locally set or default threshold of 2,500 square metres. The assessment is a critical document for out-of-centre and edge-of-centre retail proposals, and a negative conclusion can be grounds for refusing planning permission regardless of other benefits the scheme might offer.
Typical Cost
£300 – £5,000+
Turnaround
1 – 6 weeks
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What is a Retail Impact Assessment?
A Retail Impact Assessment (RIA) is a technical document that analyses the likely trading effects of a proposed retail development on existing centres. It quantifies the amount of trade that will be diverted from existing shops and town centres to the proposed development and assesses whether this diversion would cause a significant adverse impact on the vitality and viability of those centres, including their planned investment. The assessment uses retail expenditure data, population projections, and market share analysis to model how consumer spending will redistribute if the development is permitted.
When is a Retail Impact Assessment required?
Under paragraph 90 of the NPPF, an impact assessment is required for retail and leisure development outside existing town centres that is not in accordance with an up-to-date plan and exceeds the locally set threshold, or 2,500 square metres where no local threshold has been set. Many local authorities have adopted lower thresholds of 200 to 500 square metres to protect smaller town centres that are more vulnerable to trade diversion. The assessment is required for all forms of retail development including food stores, retail warehouses, factory outlet centres, and leisure uses with a retail component. Applications for extensions to existing out-of-centre stores may also trigger the threshold.
What does a Retail Impact Assessment include?
A Retail Impact Assessment includes a description of the proposal and the catchment area it will serve, an audit of existing retail provision in the catchment including floorspace, trading performance, and vacancy rates, analysis of current and projected consumer expenditure using recognised data sources such as Experian or Oxford Economics, an assessment of committed and planned retail development that should be taken into account, a trade diversion analysis estimating the proportion of the proposed development's turnover that will be drawn from each existing centre, an assessment of the impact on each affected centre's vitality and viability including the effect on planned investment, consideration of the cumulative impact alongside other committed developments, and a conclusion on whether the impact would be significantly adverse.
How much does a Retail Impact Assessment cost?
A Retail Impact Assessment for a modest out-of-centre development typically costs between £5,000 and £12,000. Medium-scale assessments for significant retail proposals affecting multiple town centres usually range from £12,000 to £25,000. Large and complex assessments for major retail-led schemes involving extensive household survey data, detailed expenditure modelling, and multiple sensitivity scenarios can cost £25,000 to £50,000. The cost of proprietary expenditure data from sources such as Experian is typically included but can add several thousand pounds to the overall fee.
Who can prepare a Retail Impact Assessment?
Retail Impact Assessments should be prepared by specialist retail planning consultants with demonstrable expertise in retail economics and expenditure modelling. Practitioners are typically chartered town planners who are members of the Royal Town Planning Institute (RTPI) with a specialism in retail and town centre planning, or economists with planning expertise. The assessment requires a combination of planning policy knowledge, retail market understanding, and competence in quantitative analysis. Planning inspectors at appeal will scrutinise the qualifications and track record of the author.
How long does a Retail Impact Assessment take?
A Retail Impact Assessment typically takes 6 to 12 weeks to prepare, depending on the complexity of the catchment area and the number of centres affected. The programme should allow for expenditure data procurement, which can take 2 to 3 weeks, a health check survey of affected town centres, construction of the retail model, sensitivity testing, and report writing. Where a household telephone survey is commissioned to establish existing shopping patterns, this can add a further 4 to 6 weeks to the programme.
Frequently Asked Questions
What is the 2,500 square metre threshold?
The NPPF sets a default threshold of 2,500 square metres gross floorspace for retail and leisure proposals outside town centres, above which an impact assessment is required. Local authorities can set their own lower thresholds through their local plan based on the vulnerability of their town centres. Many smaller authorities have adopted thresholds of 200 to 500 square metres to protect local centres from the cumulative effect of incremental out-of-centre development.
What does 'significant adverse impact' mean?
The NPPF states that planning applications for retail development outside town centres should be refused where they would have a significant adverse impact on existing, committed, and planned investment in a centre, or on town centre vitality and viability. There is no fixed numerical threshold for what constitutes significant adverse impact. It is a matter of professional judgement considering the overall health of the centre, the scale of predicted trade diversion, and the centre's resilience to change.
How is trade diversion calculated?
Trade diversion is calculated by estimating the total turnover of the proposed development and then assessing what proportion of that turnover will be drawn from each existing centre based on the likely catchment area, the type of goods sold, and the relative attraction of the proposal compared to existing provision. The analysis uses a gravity model or market share approach and should be supported by expenditure data and, where possible, household survey evidence of existing shopping patterns.
What is a town centre health check?
A town centre health check is an audit of the current condition of a town centre, assessing indicators such as vacancy rates, diversity of uses, retailer representation, pedestrian flows, environmental quality, accessibility, and commercial yields. It provides the baseline against which impact is assessed. A centre that is already vulnerable with high vacancy rates and limited investment is more likely to suffer significant adverse impact than a thriving centre with strong demand for space.
Does the impact assessment apply to food stores?
Yes. Supermarkets and convenience stores proposed outside town centres are subject to the same impact assessment requirements as any other form of retail development. Food store impact assessments are among the most common, given the frequency of applications for out-of-centre supermarkets and discounters. The assessment examines trade diversion from both town centre food retailers and other food stores in the catchment area.
What is cumulative impact?
Cumulative impact considers the combined effect of the proposed development alongside other committed retail developments that are not yet trading. This is important where several out-of-centre retail proposals are in the pipeline, as the combined impact on a town centre may be significantly adverse even if the impact of each individual scheme is acceptable. The assessment should include all developments with planning permission or resolution to grant that have not yet been implemented.
Can a Retail Impact Assessment support a town centre proposal?
A Retail Impact Assessment is only required for proposals outside existing town centres. For town centre proposals, the NPPF's town centre first approach is already satisfied, and an impact assessment is not needed. However, some applicants commission retail assessments for town centre schemes to demonstrate the positive benefits, such as clawing back expenditure that is currently leaking to out-of-centre competitors.
What expenditure data sources are used?
The most commonly used expenditure data sources are Experian's Local Expenditure and Revenue data (previously MapInfo/Pitney Bowes), and Oxford Economics forecasts. These provide per capita spending estimates broken down by goods category and small area geography. The data is combined with population projections from the Office for National Statistics to estimate total available expenditure within the catchment area and to project growth over the planning period.
How does online shopping affect retail impact assessments?
Online retailing, known as Special Forms of Trading (SFT), must be accounted for in the expenditure analysis. The assessment should deduct an appropriate proportion of expenditure to account for online sales, and this proportion should reflect the latest trends and projections. The growth of online shopping has reduced the amount of expenditure available to support physical shops, making town centres more vulnerable to the impact of out-of-centre development.
What happens if the assessment shows significant adverse impact?
If the Retail Impact Assessment concludes that the proposed development would have a significant adverse impact on a town centre, the NPPF directs that the application should be refused. There is no balancing exercise against other benefits in this context. The applicant would need to either demonstrate that the impact is not significant through revised modelling, reduce the scale of the proposal to acceptable levels, or identify an alternative site that is closer to an existing centre.