Proposed changes to retail guidelines will cost jobs and cause more dereliction

Minister Hogan needs to reject the proposed changes to increase the size of large stores.

Research shows that 1.4 jobs are lost in town centres for every new job created in out-of-town ‘megastores’. Because of their failure to engage with local suppliers and re-circulate money back into local economies, each new out-of-town ‘megastore’ results in a net jobs loss of 270 full-time positions, according to US research (see submission for details).

We have no reason to believe the situation is any different in Ireland. Indeed, Forfas in its report to the Minister on the Retail Planning Guidelines could only make guestimates because of what it called “a lack of timely and detailed data”.

If Minister Hogan has any real interest in reviving town centres and sustaining local business it makes absolutely no sense to increase the floorspace of hypermarkets.

The reality is that mega-retailing in Dundrum has destroyed shopping in Dun Loaghaire, while edge-of-town shopping has also put Waterford and Limerick city centres in jeopardy. Minister Hogan must not let himself become the person that opens up a coffin for town and city centres. Minister Hogan does not need to be the Minister remembered for causing further dereliction in urban areas.

Minister Hogan needs to the counteract the policy of some councils to poach business out of town and cities, and not promote it.

US experience also shows that locally based shops return twice as much money to the local economy as out-of-town retailers. Fact: locally-based shops return 32 cents of every euro spent to the local economy, but large out-of-town retailers only return 16 cents of every euro in revenue back into the local economy (according to the research; see detailed paper).

Further, locally owned businesses employ more staff and pay better. Employees in ‘superstores’ earn 20% less according to research on what hyper-retailer Wal-Mart pay staff. The undermining of traditional town centres by big and out-of-town stores has to stop – not be made worse.

An Taisce advocates a two prong-strategy to stem the erosion of town centres.

A hypermarket levy: In Northern Ireland the largest 76 stores are subject to the levy. An Taisce supports the hyper-market tax being brought in Northern Ireland and calls for introduction here. It will apply to 76 big retailers in Northern Ireland, and should be applied to the 300 largest stores in the Republic.As proposed in Northern Ireland, there should be a 15 per cent surcharge on their rates bill and finance rates-relief for small business, the use of empty shops for non-commercial purposes, and public transport. Second, an out-of-town retail parking levy: An Taisce, Ireland’s National Trust, is also recommending an out-of-town retail parking tax with 20 to 25 cents would be collected for every 2 or 3 hours of parking at major retail outlets where parking is currently free. The charge is not prohibitive – and it does provide much-needed revenue for public transport alternatives so that we can wean ourselves off our over-reliance on imported oil in the medium to long term. Some revenue would need to go to back the retailer initially to pay for installing the car park charging system, but over time the money would be sent to local government to provide sustainable transport. All of our cities are struggling to secure funds for bike-sharing. Dublin has ambitious plans to deliver a 9-fold increase in its programme, but lacks the money. Cork, Limerick, Galway and Waterford are all finding it very tough to even start bike-sharing programmes. In rural areas local authorities must do far more to deliver sustainable transport. At the very least councils need to finance structures so that vetted volunteers can offer lifts to people living in isolated areas, and pave the way for county-wide services over time

Finally the Trust noted:

“We do not live only as consumers; we are part of communities too. There is a balance to be struck here, and the current guidelines strike that balance reasonably well. Rigorous competition already exists, not only on price grounds, but also on the ethical choice there is between shopping in locally-owned stores and leaving more money in the community – or, going to out-of-town mega-retailers and sending more money abroad. Weakening the current guidelines would result in mega-retailers gaining more monopoly power, a loss of community and more money leaving the country.”