Appendix 11a

PROPOSED DESIGNER OUTLET CENTRE, BASINGSTOKE LEISURE PARK: PRELIMINARY RETAIL IMPACT ASSESSMENT (PRIA)

SUMMARY FINDINGS PREPARED FOR BASINGSTOKE AND DEANE BOROUGH COUNCIL MARCH 2016

CONTENTS

1. EXECUTIVE SUMMARY ...... Error! Bookmark not defined.

2. THE DESIGNER OUTLET CENTRE MARKET AND TRADING CHARACTERISTICS ...... 2

3. IMPACT ASSESSMENT - BASELINE AND FORECAST ASSUMPTIONS...... 3

4. INDICATIVE IMPACT ASSESSMENT FINDINGS...... 5

APPENDIX 1 – CATCHMENT PLAN

1. INTRODUCTION

1.1 This report provides a summary of the key findings of the Preliminary Retail Impact Assessment (PRIA) prepared by Carter Jonas on behalf of Basingstoke and Deane Borough Council (‘the Council’).

1.2 The PRIA provided initial advice to the Council on the potential retail (economic) impact of the emerging proposal for a ‘Designer Outlet Centre’ (DOC) at Basingstoke Leisure Park (BLP) on Basingstoke Town Centre and other main centres in the Basingstoke and Deane Borough area (the ‘Borough’).

1.3 The PRIA considered a range of factors including retail trends, focusing on the DOC market, the operational requirements and catchment profile of DOCs, the likely turnover of a new DOC at BLP, and potential impact in terms of trade diversion and loss of linked trips from Basingstoke Town Centre and other main centres in the Borough. 2. THE DESIGNER OUTLET CENTRE MARKET AND TRADING CHARACTERISTICS

2.1 ‘Designer Outlet Centres’ generally refer to a managed, purpose-built shopping centre development where a range of retail brands operator stores offering merchandise at discounts to regular retail prices, on average by between 30% and 60%. The goods sold normally comprise previous season’s stock, seconds, run-ons and samples.

2.2 The retail offer of Outlet Centres tends to attract high volumes of tourists, visitors and shoppers from over a wide area, resulting in significant spin-off benefits to the local economy. There are currently estimated to be some 43 major Outlet Centres operating in the UK, with a total gross lettable area of over 620,000 sqm (c. 6.7 million square feet). It is estimated that the UK outlets alone attract over 77 million visits per annum, and generated a total turnover of £1.9billion in 2013 (excluding VAT).

2.3 Cheshire Oaks is the largest outlet centre in the UK with a total gross floorspace of 31,122 sqm gross. The best performing centre is Bicester Village, which ccording to research* it is achieving an average sales density some three times greater than the second best performing centre (Gunwharf Quays).

2.4 While the UK DOC market is underdeveloped compared to other European countries, the sector is growing with a number of new schemes recently developed or in the pipeline. At the same time, operators of a number of the leading Outlet Centres are continuing to invest by improving their retail offer, the quality of their shopping environments and carrying out extensions. For example McArthur Glen is currently extending the Great Western Outlet Centre at Swindon and submitted an application in 2015 to extend Ashford Designer Outlet Village; and Value Retail has also recently received planning permission to extend Bicester Village.

* FSP ‘Commercial & Retail Impact Assessment’ (January 2015), submitted in support of Mill Green Designer Outlet Village application in Cannock.

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2.5 Research shows that Designer Outlet Centres generally draw shoppers and expenditure from a wide catchment area, and the higher order centres are particularly attractive to tourists and day-trippers. Evidence indicates that most DOCs draw on a 60 minute off-peak drive time catchment.

2.6 In terms of other trading characteristics research and survey evidence shows that, depending on the scale and quality of their retail ‘branded’ offer, DOCs can attract:

 more infrequent trips per annum than ‘traditional’ shopping centres;

 a hgher proportion of ABC1 shoppers than ‘traditional’ shopping centres;

 shoppers and visitors who are ‘new’ to the area and would not otherwise visit; and

 a high proportion of tourists, holidamakers and day-trippers;

2.7 It should be noted that the extent of the shopping catchment and customer profile for a DOCs can vary depending on the scale, quality and type of DOC, and the location and proximity of competing schemes.

3. IMPACT ASSESSMENT - BASELINE AND FORECAST ASSUMPTIONS

3.1 The preliminary impact assessment was informed by CJ’s in-house retail capacity model, known as CREATe. The model utilises the most up to date information on population and expenditure and provides a preliminary assessment of the likely monetary trade diversion and percentage impact of the proposed DOC floorspace on Basingstoke Town Centre and other relevant shopping locations.

3.2 The PRIA provides a detailed overview of baseline assumptions and forecasts that underpin the impact assessment, including the following key factors:

Study/ Catchment Area - The assessment applies the study area identified for household telephone survey, which informed the Basingstoke Retail Capacity Refresh 2015. The study area comprises a primary and secondary catchment, which when combined broadly correlates to a drive time of 35 minutes, as shown in Appendix 1. However, taking account of DOC characteristics, it is assumed that the catchment area for a new DOC at BLP would extend beyond the study area. Therefore, we have assumed that a DOC at BLP could reasonably draw up to half of its turnover from beyond the primary and secondary catchment areas.

Available Expenditure - Forecast available expenditure for the study area is based on population projections and forecast expenditure capita to 2020 and 2025. Population projections for the study area are obtained from Experian, which are based on the ONS’s 2012-based Sub National Population Projections (SNPP). Expenditure per capita is also obtained from Experian† and is adjusted to take account of Special Forms of Trading (SFT); including online and catalogue sales, etc., and forecasted to 2020 and 2025 using Experian’s annual growth rates (also adjusted to take account of SFT).

† Retail Planner Briefing Note 12.1 (October 2014), Experian Business Strategies. Please note that a more up to date Retail Planner Briefing Note is now available.

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Shopping Patterns –non-food expenditure market shares for all centres in the catchment area are derived from the 2012 household survey results. This provides the framework for assessing the base year and predicted turnovers of all existing centres, and the forecast impact of new retail commitments and proposals. A review of market shares show that stores in Basingstoke Town Centre and out of centre locations in the Borough attract the greatest proportion of comparison goods expenditure; particularly in the PCA. Within the SCA, expenditure to competing centres to Basingstoke such as Newbury, Winchester and Southampton is relatively high. This reflects the proximity of these centres to zones within the SCA, which offer competing or stronger comparison shopping offer to Basingstoke.

Forecast Turnover - The expenditure allocated to the main centres and shopping locations has been projected forward to 2020 and 2025 based on a ‘constant market share’ approach. This is a standard and accepted approach for (retail planning) impact assessments.

Revised Market Shares - To ensure a more robust assessment of impact we have adjusted the market shares identified from the 2012 household survey to take account of new comparison goods turnover associated with new store openings in Basingstoke, including: B&M Store at Worting Road; Dunelm at Reading Road; and John Lewis at Home at Basing View. Please note that for the purpose of this PRIA we have treated the John Lewis at Home store as being part of the town centre, rather than edge of centre.

Retail Capacity – the Retail Capacity Refresh 2015 (RCR 2015) was prepared by CJ in August 2015. The findings show that after taking account of new store openings and planned floorspace there is no short term capacity in the Borough to accommodate new comparison goods floorspace. However, by 2022 capacity emerges for almost 6,000 sqm net of new comparison goods floorspace, and more than trebles by 2027 to 18,179 sqm net. By 2029 and 2031, there is a considerable quantum of residual expenditure to support new comparison goods floorspace. Some of this forecast capacity could support a new DOC for the area. It should be noted that forecast capacity will be higher if a lower sales density (e.g. comparable to a DOC) is applied.

Trading Characteristics of the Proposed DOC - the trading profile of the proposed DOC is based on published research and retail assessments used to inform catchment and trading characteristics for other similar designer outlets schemes across the UK. The assessment assumes an average sales density achieved for recently approved DOC schemes (e.g. Mill Green, Cannock; Ashford Designer Outlet extension, Kent; Scotch Corner DOC, North Yorkshire, etc.). It is also assumed that the proposed scheme will include some provision for food and beverage (F&B) outlets and is expected to target restaurant brands typically found at DOCs in the UK.

Trade Draw – Taking account of the trading characteristics of other DOCs in the UK it is assumed that the proposed DOC could draw some 50% of its total turnover from outside the defined catchment. This takes account of research that shows that typically 50% of visitors to Designer Outlets travel more than 30 minutes.

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Market Demand – We understand that industry representatives and DOC operators have identified the M3 corridor as suitable location for a new DOC. Basingstoke represents the most suitable location within the M3 corridor due its distance from other DOCs, access from the M3 and public transport connections. It also provides the potential to encourage linked shopping trips between Basingstoke Town Centre and the DOC, which may not be achieved if the DOC was located elsewhere in the M3 corridor.

3.3 The baseline and forecast assumptions summarised above serve to underpin the indicative retail impact assessment for a new DOC at BLP.

4. INDICATIVE IMPACT ASSESSMENT FINDINGS

4.1 In assessing the impacts of the scheme on centres and shopping destinations located both within and outside the primary and secondary catchments we have applied the ‘like-for-like’ principle, as set out in the NPPF (paragraph 016). In other words that retail schemes are most likely to draw trade from similar, comparable destinations.

4.2 Trade diversion and impact has been considered separately for the PCA and SCA. In summary the impact findings show that:

. Impact of the proposed DOC is largely absorbed by the significant increase in comparison goods expenditure between 2015 and 2025.

. Within the PCA, we have assumed that a higher proportion (40%) of trade diversion from Basingstoke Town Centre due to its proximity to the application site. Trade diversion is also assumed from larger competing centres outside of the defined catchment area (Reading, Newbury, and Winchester, etc) which have a strong comparison goods offer. In addition, trade draw is identified from ‘other centres’ outside of the catchment area, which could be include competing designer outlet centres, such as Gunwharf Quays and Bicester Village.

. Within the SCA, we have assumed a greater level (80%) of trade diversion from competing centres outside of the Borough; in particular Newbury, Reading, Winchester, Southampton and ‘other centres’. This takes account of the proximity of these centres to the SCA, which attract a higher market share compared to the PCA. It is also assumed that trade diversion from ‘other centres’ could account for expenditure leaked to other designer outlet centres.

. A notable impact on comparison goods turnover from stores in Basingstoke Town Centre;

. Marginal impacts on the main out of centre retail warehouse and shopping parks identified, including new store openings (e.g. Dunelm Mills and B&M Stores) - the Council will be aware that any impact on these schemes is not a policy concern; and

. The potential for the proposed designer outlet to ‘claw back’ and divert expenditure that is currently flowing to competing centres outside of Basingstoke and Deane Borough Council, as well as other Designer Outlets in the UK, principally Bicester Village.

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4.3 In accordance with the requirements of the NPPF it is necessary for the local planning authority to consider the impacts that new retail proposals will have on the vitality and viability of centres within the defined catchment area, and also on any existing, planned or committed investment (NPPF, para 26). The following provides a summary of the findings:

Impact on Basingstoke Town Centre – The town centre appears to be in reasonable health based on low shop vacancies and new investment in the area. In particular, the opening of John Lewis and Waitrose at Basing View is expected to strengthen the town centre’s profile, increase footfall, and stimulate further investment. While impact associated with the proposed DOC appears to be acceptable in percentage terms there is still concern as to the potential loss of shoppers from the town centre to the proposed DOC. Therefore, we recommend that any application coming forward demonstrates measures to encourage linked trips between the application site and the town centre, to help mitigate the forecast level of trade diversion identified. Consideration should also be given to the potential impact on commercial leisure provision in the town centre, should the proposed DOC target F&B operators that are trading in the town. While food and beverage offer at DOC’s are not in themselves the primary reason for visiting a centre they help to encourage dwell time and increase the attractiveness of the centre as a whole. The Council may wish to consider conditions to exclude existing town centre restaurant brands from the DOC’s tenant mix. This could ensure that the town centre maintains a good presence of key restaurant brands.

Impact on other centres in the Borough - We do not consider that the DOC will have a significant adverse impact on smaller centres in the Borough including larger district centres such as Brighton Hill. This is on the basis that smaller centres offer a very limited range of comparison retail provision with little (if any) clothing and footwear offer. Expenditure from these local catchments will already be drawn to key shopping destinations including, Basingstoke Town Centre and major centres outside of the Borough. Furthermore, footfall in district and local centres is primarily supported by convenience offer, particularly centres that accommodate a foodstore. Taking account of the above factors it is unlikely that a DOC would compete with Borough’s network of smaller centres, in turn reducing any potential impact associated with comparison goods trade diversion.

Impact on existing, committed and planned investment - As far as we are aware, the recent development and opening of a John Lewis at Home and Waitrose store at Basing View is the only major planned investment scheme identified for the town centre. The scheme will serve as an extension to Basingstoke Town Centre and is expected to stimulate footfall and investment. Therefore, it is unlikely that the proposed DOC would impact on the deliverability or viability of the Basing View scheme.

4.4 It should be noted that this Summary Report and the PRIA (‘Preliminary Retail Impact Assessment’) it refers to does not replace the need for the applicant to carry out a detailed and robust impact assessment in support of any future planning application for a DOC as part of the mix of uses proposed for BLP.

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APPENDIX 1

Catchment Plans:

Figure 1: Catchment Area

Figure 2: Drive-time overlay

PRELIMINARY IMPACT ASSESSMENT