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Figure 3: Typical Sales Densities of UK-Based Retailers
Source: Retail Rankings 2005 Note: Figures include UK Government's VAT at 17.5%
3.07 On this basis, the amount of available expenditure on the island could support 8,747sq.m.net of floorspace devoted to the sale of furniture and floor coverings (£18.85m ÷ £2,155/sq.m.). Based on surveys, WYGP's estimate of floorspace dedicated to the sale of furniture and floor coverings on the island is 5,760sq.m. Therefore, there is sufficient expenditure to support an additional 2,987sq.m.net floorspace.
3.08 It is important to bear in mind that underlying growth in household expenditure will result in this quantitative need increasing year on year if no additional floorspace is created. There is no accurate information on household expenditure growth on the Isle of Man, but the equivalent growth rate in the UK is around 3.5% per annum in respect of comparison goods spending.
3.09 The implications of this surplus expenditure are that existing stores on the Isle of Man will 'overtrade' and/or goods will be purchased from locations off the island, either by residents visiting stores in the UK or via catalogue / mail order / internet. In this context, it is important to consider the disbenefits associated with goods being purchased in UK stores or by mail order.
3.10 Firstly, the 'leakage' of expenditure to destinations outside the Isle of Man is harmful to the local economy; the application proposals will help to retain expenditure and create local employment. Secondly, customers purchasing goods on the internet or by mail order are unable to clearly view the goods they purchase and are deprived of the level of in-store service and advice which face-to-face contact in a large retail showroom affords.
3.11 Having regard to the above, there is a quantitative need for additional floorspace dedicated to the sale of furniture and floor coverings. Importantly, there is a sufficient expenditure capacity to support the proposed 1,724sq.m.net floorspace which would absorb just 58% of the current capacity.
| Allied Carpets | £1,341 per sq.m. |
| Carpetright | £1,454 per sq.m. |
| Homestyle | £2,074 per sq.m. |
| Harveys | £1,454 per sq.m. |
| DFS Furniture | £6,109 per sq.m. |
| Courts | £2,479 per sq.m. |
| Magnet | £1,404 per sq.m. |
| Dreams | £1,632 per sq.m. |
| ScS Upholstery | £1,530 per sq.m. |
| Furnitureland | £2,074 per sq.m. |
| Average | £2,155 per sq.m. |
3.12 Section 2 of this statement has assessed shopping provision on the island and, in particular, assessed stores selling furniture and floor coverings. Existing furniture and flooring stores on the island mostly operate in cramped conditions and consequently have limited ranges. Outside town centres, outlets selling furniture and carpets are larger and are capable of storing more stock. However, these units are predominantly used for storage and manufacture with limited floorspace dedicated to the customer showroom/sales area. Most existing stores on the island do not have sufficient adjacent car parking.
3.13 There is a need to improve the range and choice of stores selling carpets and floor coverings. Large-scale retail warehouses are required to bring about qualitative improvements to the benefit of the island's residents. According to retail industry analysts Mintel, "the media has raised interest in home fashions in recent years, making consumers more design literate and boosting sales. Retailers can thus drive sales by emphasising fashion and style content," (Retail Rankings 2005).
3.14 The proposed development will enable retailers to keep up with customer demands and retail trends by providing two units with spacious, flexible, showroom-style floorspace enabling extensive in-store displays thus modernising the retail offer on the island. Resisting such development would stifle innovation within the retail sector on the Isle of Man. Customers of the proposed development will also benefit from sufficient levels of adjacent car parking, currently lacking at most of the existing stores selling furniture and carpets on the island.
3.15 It is relevant to take into account the known requirements of the retail sector. The applicants are experienced developers and, although no operators are formally associated with the proposals at present, they are aware of strong interest from UK-based multiple retailers for new retail provision of the type proposed. If retailer demand remains unmet, investment in retail facilities on the island will be prevented and residents will be deprived of an increased range and choice of furniture and floor coverings sold from modern premises.
3.16 There is a clear need for additional floorspace dedicated to the sale of furniture and carpets, evident through the following:
4.01 In accordance with Development Plan policy, it is appropriate to assess whether the items proposed to be sold could not reasonably be sold from a town centre location because of their size and nature. The Strategic Plan at paragraph 9.2.6 indicates that applications for retail-related uses have, in the past, generally been approved where (a) the items being retailed cannot generally be sold from a high street or town centre location, and (b) developments which comprise retail use which are inextricably linked to the primary use of the building for uses such as manufacturing.
4.02 There are two reasons why the proposed development and the type of goods to be sold cannot reasonably be accommodated in a town centre location.
4.03 The goods proposed to be sold from the two proposed units are furniture and floor coverings. As previously mentioned, the proposed development will be operated by retailers requiring a large showroom area in order to display the full range of goods in an attractive and innovative manner. In the case of furniture displays, domestic spaces such as bedrooms or living rooms will be recreated in-store to display the many different furniture ranges on offer. For example, a design-themed bedroom may include a bed, bedside tables, wardrobes, chest of drawers, dressing table etc. A living room may comprise a sofa, armchair, coffee table, cabinets, shelving units etc. This form of modern showroom retailing has extensive space requirements.
4.04 In terms of floor coverings, modern retailers require sufficient floorspace to display carpets, laminate and real wood flooring, rugs, mats, carpet tiles, floor tiles, and vinyl flooring. A large unit is required for these ranges to be displayed attractively.
4.05 On the basis of our surveys, there are no suitably large units or sites available in town centres to meet the above requirements.
4.06 Furniture and floor coverings are bulky goods. Whilst some customers making purchases may arrange for their goods to be delivered, many will expect to take purchases home in their vehicles. Therefore, in practical terms, sufficient and adjacent car parking is required. It is not reasonable to expect customers to buy products from a shop in, for instance, Strand Street in Douglas then
carry the bulky goods to one of the multi-storey car parks to transport the goods home.
4.07 On the basis of WYGP surveys, units or sites capable of accommodating the required sales area and the necessary adjacent car parking do not exist within the island's town centres.
4.08 In the context of the identified need for large-scale furniture and floor covering units on the island, there are no available units or sites in a town centre location which are suitable to accommodate the proposal and the type of goods to be sold. The requirements for large showroom areas and adjacent car parking mean that a town centre location would not be appropriate.
| Gross sales area of proposed development: | 2,299sq.m. |
| Net sales area of proposed development (assuming sales area will be 75% of gross floorspace): | 1,724sq.m. |
| Benchmark sales density: | £2,155/sq.m. |
| Estimated turnover of proposed development: | £3.71m |
| Available furniture and floor covering expenditure: | £18.85m |
| Residual available to existing stores on island: | £15.14m |
| Residual sales density of existing stores (comprising 5,760sq.m.): | £2,628/sq.m. |
| Difference between residual and benchmark sales density: | + 22% |
5.01 This section of the statement considers the potential trading effects of the proposed development on the island's town centres, and in particular Douglas town centre.
5.02 Firstly, as noted in Section 2 of this statement, stores selling furniture and floor coverings account for a very small proportion of town centre units. In Douglas town centre, the nearest centre to the application site, there are just 3 units selling furniture or floor coverings representing just 1% of the total number of units in the centre and just 0.3% of the floorspace. In this context, the effects of the proposed development on town centres are going to be virtually imperceptible.
5.03 Secondly, the trade draw to the proposal will be dispersed across the island, and trade will be diverted from existing stores selling similar types of goods. Therefore, the trading effects of the proposal will not be concentrated on one location. In this context, it is relevant to refer back to the calculations in Section 3 of this statement. If it is assumed that the £18.85m of available expenditure on the island is spent in existing stores, their average sales density will be £3,272/sq.m. (£18.85m ÷ 5,760sq.m), some 52% above the benchmark sales density of £2,155/sq.m.. If the turnover of the proposed development were to be drawn in its entirety from existing stores on the island, they would still trade above benchmark levels, as shown in Figure 4 below:
Figure 4: Trading Effects (assuming 100% trade draw from existing furniture and floor covering stores)
5.04 Even if the total turnover of the proposed development was diverted from Douglas town centre, this would represent just 3.9% of the estimated comparison goods turnover of the town centre, as shown in Figure 5 below.
Figure 5: Trading Effects (assuming 100% trade draw from Douglas town centre)
Notes: Floorspace figures from Experian Goad Estimated sales density is based on WYGP experience of UK town centres
5.05 Given that the town centre enjoys healthy levels of vitality and viability (as described in Section 2, an impact of 3.9% on the comparison goods sector of Douglas town centre is unlikely to materially affect its continued strength as a shopping destination. Retail impacts of greater than 3.9% have been accepted by Planning Inspectors in the UK, particularly when the relevant town centre is performing relatively strongly. It should also be noted that the above assessment of impact does not take into account the convenience goods sector of the town centre economy which includes, inter alia, the turnover of the Safeway and Tesco stores. The turnover of these two stores is estimated in Figure 6 below:
Figure 6: Turnover of Supermarkets in Douglas Town Centre {{table:280185}} Notes: Sales density from Retail Rankings, 2005
5.06 If the turnover of these two supermarkets was added to the total turnover of Douglas town centre (giving a figure of £133.58m), the impact of the proposed development on the town centre will be just 2.8%.
5.07 Additionally, the impact of the proposed development on the town centre will not diminish its attraction to potential investors. In this context, it is relevant to note that the Focus database of retail requirements indicates that the following operators have requirements for Douglas:
5.08 This indicates relatively strong demand for floorspace in Douglas town centre from UK-based retailers and operators who currently have no presence in the town. The requirements highlighted
| Store | Sales area | Sales density | Turnover |
| Tesco | 2,500sq.m.net | £11,129/sq.m. | £27.82m |
| Safeway | 1,750sq.m.net | £6,760/sq.m. | £11.83m |
| Total | £39.65m |
are from operators in various sectors and for a variety of unit sizes. It is also important to note that the Focus database provides only an indication of the overall demand for floorspace. There is likely to be additional demand from other retailers and operators who do register their interests with Focus, particularly independent retailers.
5.09
In summary, the proposed development will not materially affect the vitality and viability of Douglas town centre. The trade draw to the proposed units will be dispersed across existing carpet and furniture stores on the island which will dilute the trading effects. Even if the total turnover of the proposed development was derived entirely from stores in Douglas town centre, this would represent just 3.9% of the existing comparison goods turnover of the centre, and just 2.8% if the turnover of the two main supermarkets is added. This level of impact will not materially affect a centre which is assessed to be performing strongly in terms of its vitality and viability.
6.01 The submitted application seeks planning permission for the sub-division of the existing Unit 1 into two units for the sale of furniture and floor coverings. The two units will share 88 car parking spaces including disabled spaces. It is anticipated that the retail units will be occupied by operators requiring large, flexible, showroom-style sales area.
6.02 Douglas is the principal shopping destination on the Isle of Man and has a vital and viable town centre. Other town centres on the island cater predominantly for local needs.
6.03 In terms of outlets selling furniture and floor coverings, existing town centre stores mostly operate in cramped conditions and consequently have limited ranges. Outside town centres, outlets are larger and are capable of storing more stock. However, these units are predominantly used for storage and manufacture with limited floorspace dedicated to the customer showroom/sales area. Sufficient levels of dedicated, adjacent parking are lacking in respect of most furniture and carpet stores on the island.
6.04 There is a strong need for the proposed development having regard to quantitative and qualitative factors, and retailer demand. The key benefits of the development can be summarised as follows:
6.05 In the context of the identified need for large-scale furniture and floor covering units on the island, there are no available units or sites in a town centre location which are suitable to accommodate the proposal and the type of goods to be sold. The requirements for large showroom areas and adjacent car parking areas mean that a town centre location would not be appropriate.
6.06 The proposed development will not materially affect the vitality and viability of Douglas town centre. The trade draw to the proposed units is likely to be dispersed. However, considering a worst-case scenario where the total turnover of the proposed development is derived entirely from stores in Douglas town centre, this would represent just 3.9% of the existing comparison goods turnover of the centre, and just 2.8% if the turnover of the two main supermarkets in the town centre is taken into account. This level of impact will not materially affect a centre which is assessed to be performing strongly in terms of its vitality and viability.
6.07 In light of the above, it is concluded that the proposed development is acceptable having regard to the retail policies contained in the Development Plan.
A018638rpt/KH/kh July 2005
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