Aldi welcomes the undertaking of the review of the retail planning guidelines and we are happy to become proactively involved at this initial stage of the review process. We do have some concerns regarding aspects of the existing retail planning guidelines, in particular the way they are interpreted differently by local authorities. These guidelines are very clear that the planning system should encourage competition and innovation but, notwithstanding this, we consider that discount retailers face more stringent limitations on size than other grocery retailers, thereby inhibiting competition.
It has been our experience that the planning system has acted as a barrier to competition in the convenience sector in the following ways. There are restrictions on the definition and size of discount food stores, restrictions on where discount food stores can locate, floor space projections and retail strategies and unnecessary delays resulting from objections and appeals.
In terms of the definition and size of discount food stores, the retail planning guidelines describe discount food stores as single level, self-service stores, normally between 1,000 sq. m and 1,500 sq. m of gross floor space. In 2001 discount food stores were a relatively new phenomenon in Ireland, but the changing nature of the discount food store should be recognised in line with the increasing popularity of this type of retailing. It should be acknowledged in the new guidelines that the average size of food stores has increased to up to 1,800 sq. m. The description set out is not intended to be prescriptive in terms of a threshold size for such developments; it is to be used by local authorities as a broad indication of the potential retail floor space to be provided by discount food stores. Notwithstanding this, a number of local authorities appear, in practice, to regard the 1,500 sq. m figure as being a binding upper limit. It should be clearly outlined in the guidelines that the revised figure of 1,800 sq. m gross should not be viewed as a cap on the size of discount food stores.
Regarding locations for discount food stores, while the retail planning guidelines acknowledge that discount food stores are acceptable in town, district and neighbourhood centres, it is considered that the range of land use zonings under which discount food stores are listed as permitted should be expanded. In a number of instances the development of discount food stores is inhibited by overly restrictive zoning matrices within development plans. In particular, it is considered that retail planning guidelines should continue to specifically recognise the role discount food stores can play in the redevelopment of previously industrial locations that have become obsolete. These locations often adjoin well established residential areas and, in many cases, have become derelict. The redevelopment of locations where discount food store use can provide a well designed neighbourhood retail facility may dramatically improve the physical appearance and environment of the immediate area. It is submitted that it should be specifically recognised in the guidelines that discount food stores can be appropriate on land zoned for industrial enterprise and residential purposes, particularly where they can serve a neighbourhood function.
On floor space projections and retail strategies, local authorities are required to produce development plans containing specific retail strategies. These retail strategies establish the optimal scale and location for retail development. However, local authorities often regard floor space projections as limits on the total amount of retail development they can permit, thereby restricting development. This issue was recognised in a recent report by the Competition Authority, which noted that, in practice, it seems local authorities and An Bord Pleanála place weight on projections of required future retail floor space contained in local authority development plans. The report goes on to acknowledge that an assessment by a local authority of the likely additional floor space required within its administrative area could be seen as determining how many entrants will be admitted to the retail trade in a particular area. The Goodbody report in 2000 highlighted this as a concern, stating that these assessments could be anti-competitive, tending to stifle innovation and contrary to the interests of consumers. It should be acknowledged in the retail planning guidelines that the floor space capacity figures set out in retail strategies should not be considered as upper limits, but merely as indicative of the scale of new floor space required to meet the needs of the existing and future population and expenditure in a particular area. These figures should be seen as minimums rather than maximums. The key criterion in the assessment of an application is the location of the new floor space. The quantum of floor space only becomes a critical consideration where new floor space is proposed outside of the defined retail core of the town.
I will now deal with third party appeals to planning applications. The uncertainty regarding planning permission can also raise the cost and delay the arrival of the new retail outlet. Given that the effect of third party appeals, especially by competitors, is primarily to delay the planning process and therefore raise the cost of entry, we would consider that the Competition Authority recommendation that further research be undertaken with a view to limiting grounds for appeals based on anti-competitive and commercial reasons should be adopted. It is submitted that the delays currently experienced in the planning system in Ireland inhibit competition in the retail sector, particularly due to the postponement of decision on appeals to An Bord Pleanála, which rarely achieves the target timeframe of 18 weeks and generally takes six to nine months to issue a decision on an appeal. In cases where An Bord Pleanála refuses planning permission for the development, the prolonged delays in making the decision further inhibit the development process and the time of delivery of new stores in Ireland.
Let me reiterate that it is considered that discount retailers face more stringent limitations on size than other grocery retailers, thereby inhibiting competition. It has been our experience that aspects of the planning system have acted as a barrier to competition in the convenience sector. It is submitted that the following amendment should be made to the retail planning guidelines in order to facilitate a more competitive retail environment: updating the description of the discount food store to reflect an average size of up to 1,800 sq. m, clarifying that the descriptive size set out in the guidelines should not be interpreted as a cap, specifically recognising the role of discount food stores to serve a neighbourhood function, acknowledging that floor space projections within retail strategies should not be interpreted as upper limits on the total amount of retail development that the planners can permit within their administrative areas, limitating grounds for vexatious third party appeals.
