Attachment 7 - Economic Need and Impact Assessment · MCU13/0251

5        CENTRES IMPACT ANALYSIS
The purpose of this section is to estimate the likely impacts of the establishment of the new
centre on the existing and approved centres network that currently services the trade area. The
principal focus of this impact analysis is the impact on centres, not individual retailers. The only
instance where the impact on a particular retailer is pertinent is when there is a clear nexus
between the ongoing viability of that individual retailer and the viability of the centre. This
particular issue arises most commonly when there is concern about the ongoing viability of an
anchor tenant without which a given centre cannot survive.

5.1      Impact Defined
Economic impact is the probable reduction in retail turnover at existing shopping centres and
retail areas resulting from the introduction of competitive development in the form of a new
centre or expansion of an existing centre. The expected turnover generated by the new centre, or
the additional turnover generated by centre extensions represents the dollar impact on an area’s
retail network in the first full trading year in which it is introduced.
That is, once the new centre or centre extensions have been trading long enough to ‘settle in’
(usually a year), subsequent improvements in that centre’s turnover performance cannot be
considered as a further impact, as it is by then an established part of the retail network. It then
becomes subject to the impacts of competitive strategies of other centres and/or the impacts of
further new competition.
Dollar impacts are usually distributed among competitive centres and retail areas taking into
account:
• The new or extended centre’s size and function;
• The location of competitive centres or retail areas of comparable size and/or function;
• Shopper access relative to competitive centres/retail areas; and
• Physical attributes of competitive centres and retail areas, such as age, design, situation (free-
  standing centre or part of a central business area), etc.
No universally accepted standards of impact exist (or are possible) as each retail market and retail
development is different. A frequently used informal benchmark is that an impact of 15% or
more of turnover should be cause for concern. The primary concern is to ensure that the
premature or inappropriate introduction of a new centre or centre extension does not jeopardise
the current or future delivery of a range of retail goods and services available in a variety of
centre types (neighbourhood/convenience, sub-regional, regional) to the community. This
concern is not about the impacts upon the profitability of affected centres and retailers, or about
affording existing centres and retailers’ protection from healthy competition or from changing
market conditions.
The 15% benchmark for impact of concern must be applied with considerable caution as each
centre and trade area is different. For example, in stagnant or declining markets such as some
inner suburban areas or in many rural communities, impacts of 15% or more upon an existing
centre or retail area would be cause for concern. There may be insufficient prospects for growth
to ameliorate these impacts within a reasonable time period. Even then, the potential loss (or
change of use) of existing retail facilities, which might consist of old or outdated floor space,




Peregian Village Market Economic Need and Impact Assessment                                     23
December 2013 13034 Report Rev 0