Thursday 23 November 2017

Town centres under threat as plans for hypermarkets leaked in Budget report

Jerome Reilly

Jerome Reilly

Giant, out-of-town hypermarkets could be on the way, according to the leaked Irish Budget document revealed in the German parliament.

The lifting of the cap on the size of retail grocery stores to allow for construction of hypermarkets is hidden in the small print of the Budget strategy embarrassingly leaked from the Bundestag.

"In line with the time-bound action plan submitted in September 2011, authorities will publish a public consultation draft of updated retail planning guidelines which include, inter alia, the agreed changes to the retail size caps in Ireland. Building on representations received by end-2011, authorities will issue finalised retail planning guidelines which include changes to the retail size caps," the document stated.

Independent grocers and town centre traders are vehemently opposed to hypermarkets which have killed off many town centres in the UK. France also tightened up laws to make it more difficult to build hypermarkets and restricted the amount of economic leverage that hypermarket chains can impose upon their suppliers

Edel Clancy, director of communications at Musgrave Group said: "The current retail planning guidelines have promoted a retail environment which has increased competition and created jobs, with the number of grocery retail outlets almost doubling to over 3,000 stores since 2006. This increased level of competition has been achieved without the need to develop large out-of-town superstores which would further threaten already struggling town centres.

"It is important that the sequential test is retained and that the vibrancy of town centres across Ireland are protected to ensure that the Ghost Town phenomenon, which has emerged in the UK in recent years, is not replicated in Ireland," she said.

Stores selling food even if they sell other products as well, including clothes, cannot be greater than 3,500 square metres in the Dublin area and 3,000 square metres in the rest of the country.

But it now appears this cap on size will be lifted and that may attract companies like Walmart and Costco to Ireland who expressed an interest in the Irish market in the past but abandoned plans because of the cap on size.

Independent TD Catherine Murphy said the effect of such a proposal would be to empty village and town centres of current retailers with the promise of driving prices down.

"While job announcements would inevitably follow, these jobs would merely displace those already employed in the retail sector. Any benefits to the economy will also be lost through the repatriation of profits to the home country of the multinational. The route to market for existing and new Irish products may become more difficult further damaging the economy," Ms Murphy said.

And the Sunday Independent has learned that the Government's commitment to tackle upward-only rents has run into trouble.

The Government planned radical new laws that would mean small businesses would be able to get their rent slashed if they can prove that they won't be able to survive the recession without a cut.

The Landlord and Tenant (Business Leases Rent Review) Bill will apply to tenants who are paying rents higher than the current market rate.

Under the new laws a new 'market rate' rent will apply for five years from the start of the rent cut.

If there is a further deterioration in the economy and the market continues to fall, the tenant will be able to ask for a review to determine the new market rate once during the five-year period.

However, the Sunday Independent has learned that queries relating to the constitutionality of the proposed bill have been raised by the Government's own law officers.

It may mean that parts of the Bill currently being finalised may have to be adjusted and its publication delayed.

Sunday Independent

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