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. PAGE 2 OF 8 PRELIMINARY RETAIL IMPACT ASSESSMENT 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. PAGE 3 OF 8 PRELIMINARY RETAIL IMPACT ASSESSMENT 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