Before a Hearings Commissioner appointed by the Central Otago District Council Under the Resource Management Act 1991 And In the Matter of an application under section 88 of the Act by CPD 2012 Limited for the construction and operation of a Countdown supermarket between Centennial Avenue and Ventry Street in Alexandra (RC200029) Statement of Evidence of Natalie Dianne Hampson for CPD 2012 Limited Dated: 6 November 2020 Lane Neave Level 1, 2 Memorial Street Queenstown Solicitor Acting: Joshua Leckie/Annabel Hawkins Email: [email protected]/ [email protected] Phone: 03 409 0321/03 377 6783 Page 2 of 21 Table of Contents INTRODUCTION ......................................................................................... 3 Qualifications and Experience ............................................................................ 3 Background and Involvement ............................................................................. 3 Code of Conduct ................................................................................................ 4 SCOPE OF EVIDENCE ............................................................................... 4 EXECUTIVE SUMMARY ............................................................................. 4 ASSESSMENT METHODOLOGY .............................................................. 5 CURRENT ENVIRONMENT........................................................................ 6 THE PROPOSAL ........................................................................................ 7 EFFECTS ASSESSMENT ........................................................................ 11 Direct Supermarket and Food and Grocery Store Effects (Trade Impacts) ....... 11 Flow-on Effects on Centre-wide Amenity .......................................................... 13 ECONOMIC AND OTHER BENEFITS ...................................................... 14 SUBMISSIONS AND COUNCIL REPORT ............................................... 17 CPD7471 8827445 Page 3 of 21 INTRODUCTION Qualifications and Experience 1. My full name is Natalie Dianne Hampson. I am a Director of Market Economics Limited (M.E). 2. I hold a MSc (Hons) in Geography from Auckland University. I am an associate member of the New Zealand Planning Institute and a member and Regional Committee Chair of the Resource Management Law Association. 3. I have 19 years’ economic consulting and project experience, working for commercial and public sector clients. I specialise in land use analysis, assessment of demand and markets, the form and function of urban economies and growth, policy analysis, and evaluation of economic outcomes and effects, including costs and benefits. 4. I have applied these specialties in studies throughout New Zealand, and across most sectors of the economy, notably assessments of new developments, plan and policy changes, urban and rural planning (including under National Policy Statements) and understanding specific sectors such as the retail, commercial, industrial, residential, education, recreational marine, aquaculture and major event industries. 5. I am based in Wanaka and am familiar with the Central Otago District, having undertaken a multitude of private and public sector projects over the years. Background and Involvement 6. M.E prepared the Countdown Alexandra Retail Impact Assessment, dated 28 April 2020 (Retail Impact Assessment), which was submitted as part of the Applicant’s response to the Council’s request for further information. 7. I have read the Council’s section 42A report (S42A report) issued on 22 October 2020. CPD7471 8827445 Page 4 of 21 Code of Conduct 8. While this is not an Environment Court hearing, I have read and agree to comply with the Code of Conduct for Expert Witnesses in the Environment Court Practice Note 2014. This evidence is within my area of expertise, except where I state that I am relying on material produced by another person. I have not omitted to consider material facts known to me that might alter or detract from the opinions expressed in my evidence. SCOPE OF EVIDENCE 9. My evidence will cover the following topics: (a) Assessment methodology; (b) Current environment; (c) Proposal; (d) Effects assessment; (e) Economic and other benefits; and (f) Response to submissions and the S42A report. EXECUTIVE SUMMARY 10. Based on my analysis, Alexandra is currently undersupplied with supermarket floorspace and this shortfall is increasing with household, business and tourism growth each year. I have assessed the potential economic effects of the proposed Countdown and consider that there is sufficient supermarket demand directed at Alexandra to support a second full-scale supermarket. 11. The supermarket will draw customers (sales) primarily from the Alexandra New World, which will continue to be viable despite a significant initial trade impact. No other supermarket or food and grocery store within the district will have its viability threatened by the new store and any reduction in turnover will be offset by continued market growth in the short term for most of the potentially affected businesses. Any distributional effects on other centres in the district would be less than minor. CPD7471 8827445 Page 5 of 21 12. Supermarket shopping patterns that have established in Alexandra’s commercial area (as a result of the New World operating at the end of Centennial Avenue) will not materially change with the introduction of the Countdown in the proposed location and other non-supermarket shopping and service trip making throughout the commercial area will also be unaffected. As such, the proposed Countdown is not anticipated to affect the foot traffic, vitality or vibrancy of the Business Resource Area. Any adverse economic effects on the functional and social amenity delivered by Alexandra’s commercial area would be less than minor. 13. The proposed Countdown will deliver a number of minor temporary and long-term positive economic and social effects, which in aggregate are considered significant in the context of Alexandra, enhancing social and economic wellbeing. This includes construction sector impacts, the creation of 40-60 net additional jobs, greater choice for supermarket shopping in the district, improved service levels during peak times relative to a single supermarket serving extensive catchment demand, less leakage of supermarket spending out of Alexandra and the district (through online shopping), greater opportunities for business support to local groups and clubs and improved business confidence for companies considering investing in Alexandra. ASSESSMENT METHODOLOGY 14. M.E’s assessment has focussed on the potential retail distributional effects of the proposed Countdown operation on existing centres in the Central Otago District (COD) trade catchment1 and the way in which these direct effects may affect (positively or negatively) the functional amenity, vibrancy and vitality of those centres over time. For clarity, M.E’s brief excluded assessment of a pharmacy or café as part of the application. I understand that these activities are no longer sought by the applicant. 15. This assessment was based on modelling of: (a) the current destination of supermarket and food and grocery store spending in COD (i.e. calibrated sales estimates by location); 1 See Figure 2.1 of the Retail Impact Assessment. CPD7471 8827445 Page 6 of 21 (b) estimated future spending (to 2033) by households, businesses and tourists at supermarket and food and grocery stores based on a range of future growth projection scenarios and associated assumptions; and (c) future sales by supermarket and food and grocery stores under a ‘without’ and ‘with’ Alexandra Countdown scenario. 16. This methodology provides a basis against which effects on centre-wide functional and social amenity can be evaluated, including the scale, significance and duration of such potential effects. CURRENT ENVIRONMENT 17. Arising within COD is estimated annual demand for supermarkets and food and grocery stores of $107m (2020)2. This is demand from resident households, businesses and overnight visitors staying in the district, although does not include demand by visitors passing through the district (who do not stay overnight). The significant share of this demand is captured by stores located within the district, although there is some leakage when residents and workers travel and shop outside of the district (including getting groceries delivered from stores outside the district). 18. Alexandra and Cromwell are the two main urban areas in the district. The district comprises large rural catchments which include small towns/settlements and limited shops and services. Combined, the rural catchments account for 48% of total district households (2020). Alexandra and Cromwell therefore have an important role of servicing their local urban and surrounding rural communities (i.e. are rural service towns). 19. Total estimated 2020 sales in district supermarkets and food and grocery stores is $136m (excluding dairies)3. This shows that catchment sales exceed catchment demand ($107m), with pass-through and day visitors from outside the district accounting for the net gain. 20. These estimated sales are distributed across 12 existing supermarkets and food and grocery stores included in M.E’s assessment, spread across 2 See Figure 2.3 of the Retail Impact Assessment. 3 See Figure 4.1 of the Retail Impact Assessment. While Figure 2.4 is supposed to contain the same information as Figure 4.1, this table was not