INTRODUCTION
STEP 2: ANALySIS OF CONSUMER DEMAND i) Population estimates/distribution
Population and expenditure estimates need to be derived for each sub-area within
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the area covered by the assessment in order to establish the existing consumer demand at the base year, and will enable projections to be made for each sub-area to the forecast year or design year as appropriate.
Population estimates are available from sources such as census data and electoral
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registers. Forecasts by postcode and expenditure estimates per head for any given area are conventionally derived from specialist data providers. It may also be relevant to consider whether national expenditure growth forecasts need to be reviewed to reflect regional variations. This could be part of the regional assessment to underpin the RSS.
In the case of local area or site specific assessments, it may be relevant to factor in
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local population changes – for example major planned new housing developments, new settlements etc. This may have a key bearing on local needs and the case for new district/local centres. However, in such cases it will be important to avoid ‘double counting’ and to understand the timing of new development and implications for phasing etc.
ii) Local expenditure estimates
It is important that the expenditure per head estimates for the population in the
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assessment area are adjusted to the correct price base. It is recommended that a constant price base be adopted to ensure that all monetary figures are given in real values and discounted for the effects of price inflation.
It is important to build a clear picture of current expenditure patterns within the
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assessment area, and between the individual sub-areas which have been identified. This will allow decision-makers to create a more accurate picture of shopping patterns of different types of goods which need to be planned for. It will also help identify any significant ‘leakage’ or outflow of expenditure to competing
destinations and provide a means of identifying relative deficiencies and opportunities for new development and, where appropriate, ‘clawing back’ expenditure (see below).
The pattern of expenditure is likely to vary considerably between different parts of
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the area, particularly in the case of regional assessments. In such cases, it may be appropriate to produce individual per head expenditure estimates for the different sub-areas. These will need to be informed by the application of per head
expenditure growth rates which should draw on national long-term trends, but may also have regard to expectations about future regional economic performance and to recent evidence of retail growth. It is however recommended that these growth rates should generally adopt a conservative level of growth in order to reflect the inherent uncertainty in economic forecasts, and the cyclical nature of the retail sector.
In all cases caution should be exercised to ensure that growth assumptions are
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realistic and do not over or under estimate the level of anticipated growth. Where capacity assessments are highly dependent on expenditure growth, it may be appropriate to test the consequences if forecast growth fails to materialise. These considerations apply equally to regional, local and site-specific assessments. Equally, population growth estimates need to take into account anticipated growth arising from local and regional housing and employment strategies, and consider the implications if planned growth fails to materialise.
Total available retail expenditure can be obtained from estimates for different
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categories and classes of retail goods.
At regional and sub-regional level, assessments can be reasonably broad brush
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and confine themselves to assessing the need for comparison goods as a single category, although more detailed assessments may assist in identifying the relationship between higher level centres and major out-of-centre development. Convenience expenditure assessments at regional level are unlikely to be necessary given the local nature of convenience shopping.
At the local level, assessments should assess the need for retail development,
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including forecast expenditure for specific classes of goods to be sold within the broad categories of comparison and convenience goods1.
Site-specific assessments relate directly to the classes of goods to be sold. Where
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such assessments confine themselves to broad categories of goods this may be insufficient to demonstrate that need exists to justify a proposal.
In all cases, consideration may need to be given to spending on special forms of
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trading. This is expenditure that does not take place in shops, such as internet shopping, mail order, through vending machines and market/roadside stalls. Specialist data providers will be able to provide a percentage figure for these, but judgements will be needed concerning future trends.
Expenditure should be calculated for the assessment area and the constituent sub-
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areas for both the base and forecast years. This enables the amount of ‘growth’ in available expenditure to be identified. Within the assessment area the generated expenditure is calculated by multiplying the resident population by the estimate of average spend per head. It is recommended that this calculation is undertaken for each sub-area.
iii) Inflow/outflow of expenditure
However widely a study area or a specific proposals catchment area are drawn, it
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will always be necessary to understand the complex pattern of inflows and outflows of spending. No retail catchment is entirely self contained. Outflows, or leakage, can be identified by consumer surveys in the area.
Inflows of retail expenditure from people living outside the assessment area are
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likely to be particularly significant if the assessment area contains higher level centres and/or is a popular tourist destination. The main types of in-flow are:
Long distance shopping trips: the amount of spending from this source can be
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determined from household surveys carried out in adjoining areas or should be estimated by reference to the best available sources.
Workers: a large daily working population will generate retail expenditure. For
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major employment areas the spending produced by workers who live outside the survey area should be estimated and included.
Tourists: visitors from the UK and overseas may, for certain locations, be an
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important generator of retail expenditure. Using survey data, where available, the spending from this source should also be estimated and included.
The existing level of such ‘inflow’ can be estimated based on ‘in centre’ surveys.
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Estimates should be made of the extent to which the scale of inflow retail expenditure is likely to change through to the forecast year(s) and in real terms.