Green light for retailer to expand

By NEIL RIDDELL

TESCO’S plans for a significant extension to their South Road store in Lerwick will go ahead after sail­ing through a half-hour hearing at the council’s planning board this week, prompting howls of protest from Shetland’s other retailing organisations.

None of the seven members of the planning board present at Wed­nes­day morning’s meeting in the Town Hall objected to the exten­sion, which will increase the shop’s retail space by over 70 per cent, after being told they had to discount the fact that the supermarket giant was the applicant and treat it as if it was any other shop applying to expand.

The decision – in line with the recommendations of the SIC’s plan­ning department – came after the board had been addressed by three of the six parties which had objected to the application, all of whom said the extension could have a poten­tially devastating impact on other retailers in the isles. Rival super­market the Co-op was among the objectors.

Its approval means Tesco will now add 870m² of sales space to the existing store, while a further 330m² of storage and staff space will be added at the back of the shop and an estimated 39 full and part-time posts are expected to be created as a result. Work on the extension is expected to commence at some stage next year.

Following the meeting, Lerwick Town Centre Association chairman Laurence Smith said he was furious that, after hearing from Tesco and the objectors at some length, plan­ning board members had spent just a few minutes discussing whether to approve the application.

“I’m very disappointed with the outcome of the hearing and we think councillors have bypassed the cen­tral issue,” he said, pointing to three paragraphs in the SIC’s 2000 struc­ture plan which commits it, among other things, to pursuing policies designed to ensure the “viability and vitality of Lerwick town centre”.

But the planning board’s unanim­ous view was that there were no legi­timate planning grounds on which to rule out the extension. Vice-chairman Gary Robinson said that after the debacle over a change of use application for the old Judane factory to be converted into retail premises, the board’s hands were largely tied.

“It leaves us very little oppor­tunity to do anything planning-wise to actually prevent people from opening up retail outlets anywhere other than the town centre,” he told The Shetland Times.

“Most of the objections centred around competition and the ethics of Tesco, neither of which were valid when it comes to considering a plan­ning application. We’re not anti local retailers by any means, but we are limited in the extent to which we can protect them from big business, whether it be Tesco or the internet.”

Mr Robinson continued: “I don’t think it’s something we’ve ever shied away from, we’ve had these arguments in the past and I’m sure we’ll have them again. I fully appre­ciate that retailers wish there was something we could do, but at the end of the day legally I’m not convinced that we could. I think it is probably the right decision, I think battle will commence between the Co-op and Tesco, there will be some impact on other retailers, but I’m not sure that [it] will be just that significant.”

But Mr Smith said the proposal would undermine locally-owned businesses, holding the potential for the displacement of more than £8 million-worth of trade and the pos­sible loss of up to 276 jobs, according to an independent retail impact study conducted by AB Associates.

He singled out 11 “very impor­tant” town centre businesses listed by Tesco in their report to the plan­ners, namely James Smith butchers, Malcolmson’s bakery, J&M Fraser’s fish shop, the Wine Shop, Cope Pet Supplies, Shetland Fudge Company, Shetland Soap Company, Conochies, D&G Leslie and the Boots and A L Laing chemists.

Referring to a recent study on the impact of developments in Alloa, Dumfries and Dingwall, Mr Smith pointed to conclusions suggesting that if the effects were mirrored here, some of those businesses faced a possible loss of between 21 and 75 per cent of trade, as opposed to the 5.2 per cent estimated by Tesco, which could mean some of the shops struggling to stay in business.

Mr Smith said rejection of the application was essential to “ensure the vitality” of the town centre, an aim which the council has committed itself to in its own structure plan. “The area has been subjected to tre­mendous pressures,” he said. “Such a proposed development may be a step too far. The area remains fragile, particularly in the current economic climate. We cannot allow these businesses to be undermined.”

With reference to commercial development, the SIC plan Mr Smith referred to states that policies should seek to ensure: “a) convenient access to shops is available to every inhab­itant of Shetland including those without access to a car; b) the viability and vitality of Lerwick town centre is protected and enhan­ced; c) developments that are con­sidered to have an adverse impact on the viability of rural shops and post offices will be resisted”.

Mr Smith argued that Tesco’s planned extension contravened all three of those points, thus giving the board legitimate cause to turn their application down. Following the meeting, Mr Robinson said he felt the wording of the plan was mis­leading: “I do have some concerns about the implications of what’s said – it basically implies that the plan­ning authority has within its control to do something about what is a com­petition issue, between out of centre stores and town centre stores.”

Director of George Robertson Ltd Andrew Simpson, who fears Tesco will seek to branch into the type of white goods and electrical appliances sold in his firm’s Hillhead shop, told the meeting that the super­market – which controls over 30 per cent of the UK grocery market and announced profits of £2.8 billion this year – had the largest buying power in the country which enabled them to substantially undercut other retailers.

He feared it would have a “mas­sive detrimental effect” on local shops and called for more oppor­tunities to be given to local people who want to set up their own busi­ness, pointing out that because money spent in Shetland-owned stores is recycled within the community, it strengthens the local economy.

His call was echoed by Sheila Tulloch from the Eid Community Co-op, speaking on behalf of Shet­land Retailers’ Association, which has been a vociferous critic of Tesco since it announced that it was taking over Somerfield’s store in the isles back in March. Ms Tulloch said the Tesco extension could be “the final nail in the coffin for some of our members”.

She said that because Shetland is an island community, there are no more customers to fight for so any additional trade for the supermarket could only be to the detriment of existing retailers in the isles, adding that the association would be satis­fied if the status quo was maintained and the supermarket was allowed to expand only staff and storage areas. “Do Tesco realise what a fragile economy they are part of, and do they care?” she asked, before telling board members: “We hope you’ll do the right thing for Shetland.”

But Tesco store manager Paul Clelland staunchly defended his com­pany’s proposal, saying the principal motivations behind the application included increasing stor­age space and improving working conditions for his staff and custo­mers. The extension, he said, would increase the number of employees from 131 to around 170 full and part-time staff. Mr Clelland said the retailer’s presence in the isles brought in some £2 million in wages to the community, along with in­direct benefits to the small number of local suppliers stocked by Tesco.

Also speaking on behalf of the supermarket, Scott Mackay said the 868m² increase in the sales area was “relatively modest in scale” and claimed the retail impact assessment conducted by Tesco this summer was “sufficiently robust” to demon­strate that it “will not have a negative impact on town centre and rural shops”.

Mr Mackay pointed out that rival supermarket the Co-op had been granted an extension of their own to increase their sales space by around 400m² back in 2006 and had not had to carry out such an assessment before it was approved. He said the increased area would only include convenience goods, not additional non-food products, reminding board members that the fact that a company of Tesco’s size and nature was the applicant was not a planning matter which they were being asked to consider.

Lerwick South councillor Cecil Smith successfully moved that the extension be granted. He said: “We have to bear in mind as a planning board [that] we can only consider what’s in front of us.

Speaking afterwards, Mr Clelland said he was delighted and, having relayed the news to his staff, they were “over the moon”. “They’ve been working in very difficult condi­tions since day one, and especially in the past few weeks as the Christ­mas rush has picked up,” he said.

Although claiming he understood the concerns of other retailers, Mr Clelland said he did not feel the extension would have nearly as great an impact as some feared, adding that if people were able to buy cheap groceries it should mean thed have more disposable income to spend in other non-food stores.

Retailers including George Rob­ert­son’s have been fearful since Tesco’s arrival that they may seek to branch out into selling larger appli­an­ces like washing machines, along with ranges of clothes. At present there is a restriction on the amount of store space Tesco can devote to non-food items, a stipulation which does not apply to the Co-op’s Holms­garth Road store, though that is a site with markedly less scope for expansion.

Though it is widely believed to be planning on branching out into other areas at some point in the future, Mr Clelland would say only that Tesco has “no immediate plans” to ask plan­ners for permission to sell fuel, clothes, large electrical goods or an increased range of entertain­ment products like CDs and DVDs.

Speaking more generally about the future for retailers who are strug­gling to cope both with the impact of an economic downturn and being squeezed not only by supermarkets but by people choosing to shop on the internet, Mr Robinson said local shops had to move with the times. He said: “If anybody was to go into the Post Office sorting office in Shet­land this week, they would be quite amazed at the number of Amazon parcels and so on.”

Some retailers are already seeking to branch out and attract business for their products outwith Shetland through the internet, including The Camera Centre – which for several years has offered some very compe­titive prices – and Harry’s Depart­ment Store. Mr Robinson feels this is something more shop owners will have to consider if they want to adapt to the pressures of the modern world.

“One thing that certainly came through when we had the population study done was lack of retail choice was being used as a reason for leav­ing Shetland and for not returning – I’m not saying this is going to improve the choice [but] there are things for retailers to go away and think about.”

He added: “There are some very good retailers in Shetland [but] I think there is a change happening in retail that’s being forced by the internet – I don’t think we can deny it, retailing cannot carry on [as it was before] – if folk can’t get what they want here in terms of value or service, they have recourse to the internet.”