How supermarkets have circumvented planning controls

Contents

1. Curbing the growth of out-of-town supermarkets
2. The supermarkets' responses
3. The UK government and planning legislation
4. New planning policy continues to support edge-of-town sites
5. Planning gain – Legitimate bribery!
6. Bulldozing protest
7. Understanding the new English local planning system

Curbing the growth of out-of-town supermarkets

The damage created by the growth of out-of-town retailing to town centres, the local economy and the countryside was recognised by the Conservative Government in 1993 when it introduced Planning Policy Guidance Note 13 on Transport (PPG13) which required the consideration of locally accessible shops in planning decisions.1 At the same time, Planning Policy Guidance Note 6 on Town Centres and Retail Development (PPG6) was revised to protect town centres against out-of-town developments in 1993 and then again in 1996. Local authorities were advised to use a 'sequential approach', and to only grant planning permission for out-of-town sites where there were no viable alternatives firstly in the town and secondly on the edge-of-town.2

Whilst this revised planning guidance did not prevent all new store development, there has been a sharp decline in new planning approvals for out-of-town superstores,3 with most retail development forced to move to brownfield sites in town centres or to edge-of-town centre sites. But there are still planning applications on out-of-town sites outstanding and the big supermarkets have substantial reserves of land in anticipation of development opportunities should the government weaken its opposition to out-of-town development. 4

The supermarkets' responses

With planning controls putting a stop to further out-of-town sprawl, the supermarkets moved back into market towns and the local high streets of large conurbations. Tesco says that stores in market towns now form the core of its business,5 and both Tesco and Sainsburys have shifted their expansion programmes to focus on smaller format inner city stores such as Tesco ‘Metro’ and Sainsbury’s ‘Central’ and petrol forecourt shops (Tesco Express/Esso, Sainsburys Local/Shell). Sainsburys Local and Tesco Express/Extra are also beginning to replace neighbourhood convenience stores. Tesco currently has 6-7% of this convenience store market, but analysts expect that to increase sharply over the next couple of years.

Asda still favours big out-of-town sheds because it is here that the supermarkets really make their money. Out-of-town superstores allow them to focus on large non-food goods, economies of scale and acres of free car parking space, which give them an enormous advantage over city centre stores. Asda has been especially keen since it found a planning loophole that has allowed it to double the size of its existing stores by building a mezzanine level within the store, significantly increasing sales space, without planning permission. Asda had planned to build a total of 40 mezzanine floors in its existing stores, but this loophole is soon set to close, with new legislation requiring supermarkets to obtain planning permission for increases in retail floorspace of 200m2 or over. Asda is still planning to build new out-of-town Asda/Wal-Mart supercentres of around 90,000 ft.

The UK government and planning legislation

The big supermarket chains clearly have the ear of Government who show no sign of breaking the power of the supermarkets. This is partly to do with the supermarket culture within New Labour: Lord Sainsbury, government minister and major New Labour financier, is thought to have successfully lobbied the government to soften its line on supermarket development. Furthermore, as former Blair advisers such as Lucy Neville-Rolfe, Philip Gould and David North pass seamlessly between the Cabinet Office and Tesco it is fairly likely that the supermarkets are heavily influencing government policy in many areas, not least the relaxation of planning controls.6

It is also to do with direct lobbying. In July 2005, Asda representatives visited the Deputy Prime Minister's office, No 10 and the Treasury to urge the government to change the test used by competition authorities so that it can open up new space to compete directly with Tesco. Asda is pushing for the 'adequate provision' test to be replaced to 'adequate competition' to overturn the 'first mover advantage' which has effectively meant that only one superstore is permitted in an area and no more.7

It is also important to understand that at heart, New Labour embraces neo-liberalism, an ideology that see planning legislation as anti-competitive, in that it stops companies from doing what they want to do and adds costs. This is the reason why new planning policy is a slimmed down and faster procedure.

There are also good macro economic reasons for the government not to break the power of the supermarkets – the competition between Tesco and Asda keep prices and hence inflation down. This may be good for economic stability but at what cost!

New planning policy continues to support edge-of-town sites

“I know that the big retailers can put pressure on local stores, and we have to be aware of this, but which is worse: the major retailers leaving the towns completely or having the big retailers trading downtown, bringing in more money and more people into the town centre as a whole.”

John Prescott, Deputy Prime Minister8

Perhaps as a result of supermarket lobbying power, the government continues to 'fail' to acknowledge that large stores can be equally damaging to the vibrancy and diversity of a retail centre, whether they are out-of-town or on the edge-of-town centres.9

New national Planning Policy Statement 6 (PPS6), which replaces PPG6, continues to actively support edge-of-centre large scale development, specifically requiring local authorities to identify sites for the provision of large format stores on the edge-of-town centres, on the basis that larger stores 'may deliver benefits for consumers'.10 As town centre development sites of a suitable size for large format stores become fewer and fewer, then proposals for edge-of-centre development become increasingly likely. PPS6 also permits development on out-of-town sites where no other suitable sites are available. A national policy supporting such large scale developments will make it that much harder for local authorities to resist proposals for these stores, despite community concerns about their likely impact. PPS6 also calls for the 'managed decline' of retail areas that can't be sustained. Farmers' markets and other alternatives get one small paragraph.

Putting pressure on local councils

“These guys are professionals and are in for the long haul. They have plenty of experience from around the country in winning planning permission – from PR campaigns in the local press to planning experts and expensive lawyers. What can we, a bunch of amateurs, do to stop them?”

Charles C, a local anti-supermarket campaigner in Shaftesbury, Dorset

Supermarkets plan their 'campaigns' well in advance - purchasing sites in prime locations, approaching council officials and doing deals, and running well-orchestrated media campaigns in the local press. Only once the site is secured and agreements have been made with planning officials (often involving the purchase of council land),will planning be sought.11

The big supermarkets also have the resources to play a very long game to get what they want. Tesco fought for 8 years, against a determined local campaign, in order to win approval for its development in Sheringham, North Norfolk.

On paper, there are grounds for local authorities to refuse permission for a new supermarket, but they may be reluctant to do so if they think the supermarket will appeal, after all the resources at the disposal of the big supermarkets are many times greater than those of the local council.

Traders in Sheringham feel let down by the local council because although the proposed development was originally refused planning permission by an area planning committee, it was subsequently approved by the full committee, after Tesco threatened to go to appeal and claim costs from the council if the application was refused. But as John Sweeney, leader of North Norfolk District Council puts it,

"They are too big and powerful for us. If we try and deny them, they will appeal, and we cannot afford to fight a planning appeal and lose. If they got costs it could bankrupt us."12

In Stockport, Manchester, a Tesco has already been built that is nearly 2,000m2 bigger than originally planned. Tesco has applied to the council for retrospective planning permission for the extra floorspace which it insists is only for storage. But 217 local traders have signed a petition urging the council to serve an enforcement notice on Tesco, meaning the store will go back to its original size. Steve Parfett of Parfett's Cash and Carry, who says the extra space is the equivalent of 19 independent shops insists,

"What Tesco has done is outrageous. No one else would get away with it. If I had done something like this, the council would be down on me like a tonne of bricks. Its one rule for us and another for Tesco who rely on their fire power, nuisance value and the fact that the council would be wary to issue an enforcement order in case Tesco appealed and the Council lost and costs were awarded against them."

References
1. Department of the Environment, Transport and the Regions ‘The impact of large food stores on market towns and district centres’ 1998 www.planning.detr.gov.uk/foodstores/index.htm: House of Commons Environment, Transport and Regional Affairs Committee ‘Second report: Environmental impact of supermarket competition’ 2000 www.publications.parliament.uk/pa/cml199900/cmselect/cmenvtra/
120/12002.htm
2. DTLR, ‘Planning Policy Guidance Note 6: Town centres and retail development’ www.planning.dtlr.gov.uk/ppg/ppg6/index.htm
3. Sustain ‘Battle in Store? A discussion of the social impacts of the major supermarkets’ 2000
4. Colin Breed 'Checking out the Supermarkets II: Competition in Retailing March 2003
5. Tesco website 'Tesco and Market Towns' www.tesco.com/everylittlehelps/downloads/TescoCR_MarketTowns.pdf, viewed 3/3/05
6. For more details on Tesco's influence on government see Corporate Watch 'Tesco: A Corporate Profile' 2004 www.corporatewatch.org.uk/profiles/tesco/tesco3.htm, viewed 28/3/05
7. Sarah Ryle 'Asda demands planning freedom to tackle Tesco' 17/7/07 The Observer
8. Peter Hetherington “Spread of out-of-town superstores halted, says Prescott” 14/7/05 The Guardian
9. Department of the Environment, Transport and the Regions ‘The impact of large food stores on market towns and district centres’ 1998 www.planning.detr.gov.uk/foodstores/index.htm; Friends of the Earth 'Why the new PPS6 could damage town centres' November 2004
10. 'Why PPS6 will damage town centres?' Friends of the Earth Briefing www.foe.co.uk/resource/briefings/pps6_damage_town_centres.pdf, viewed 27/3/05
11. ODPM Planning Policy Statement 6 , section 2.6 www.odpm.gov.uk/stellent/groups/odpm_planning/documents/page/odpm_plan_036805.pdf, viewed 27/3/05
12. Paul Brown 'Store Wars in the Shires' 17 March 2005 The Guardian http://society.guardian.co.uk/societyguardian/story/0,,1170415,00.html, viewed 28/3/05
13. Paul Brown 'Secret deals with tesco cast shadow over town' 22 January 2004 The Guardian www.guardian.co.uk/uk_news/story/0,,1128386,00.html, viewed 28/3/05
14. Nils Pratley and Julia Finch 'Shop Tactics ' 6 January 2005 The Guardian www.guardian.co.uk/g2/story/0,,1384171,00.html, viewed 28/3/05
15. Lewis Smith 'Railway tunnel collapse will cost Tesco millions' 2/7/05
16. Ibid