MCU14/0106 Appendix J - Retail Needs Assessment

8           Assessment of Economic Impacts
This section explores the likely economic impacts resulting from the proposed expansion to Noosa Civic.


8.1         DESCRIPTION OF ECONOMIC IMPACTS
For the purposes of this report the ‘economic impact’ on specific centres is defined to mean the probable
reduction in retail turnover at various activity centres resulting from the introduction of new competition in
the form of a new or expanded shopping centre. The reduction in turnover usually relates to a one off
reduction in turnover volume as a consequence of the subject development proposal.

In our view it is appropriate to express the impact on particular activity centres as a percentage of the
centre’s potential turnover in the first full year of trade of the proposed development, as well as comparing
impacts with the estimated current trading situation at each centre.

The latter measure is important because it shows the change in the centre’s current turnover compared to
forecast turnover, recognising that growth in the market, from population growth and/or real spending
growth, can offset in whole or part the effects of new competition. Readers should note that this analysis
does not include the effects of inflation.

Therefore the relevant measures are considered to be as follows:

    Turnover impact – This represents the reduction in turnover as a result of new competition,
     compared with the turnover which would otherwise have been achieved by a particular centre in the
     opening year of the proposal. This is a one-off point in time impact.

    Turnover change – This represents the anticipated overall increase or decrease in turnover for a
     centre in the forecast year (i.e. 2018) as compared with the current situation (i.e. 2014). This
     measure reflects the potential negative impact of new competitive developments, counteracted to
     varying degrees by the positive effects of underlying growth in turnover which would otherwise be
     achieved by the centre in question. That is, this measure allows for the positive effect of market
     growth.

These measures of impact and change are adopted in this report and the relevant calculations are found
in the remainder of this section.


8.2         COMPETITIVE IMPACTS – OVERVIEW
Prior to discussing our assessment of the impacts of the proposed expansion on other centres, this
sub-section provides a discussion of the nature of impacts and the response of retailers in a normal
competitive environment.

In order to present a detailed assessment of the likely trading impact of the retail component of the
proposed development, it is useful in the first instance to clarify the objectives of the analysis, and also to
understand what is or is not possible from an analysis of this type.

It is not possible in any impact assessment to estimate precisely what will be the trading impacts on any
specific individual retailers. The impact on any one individual retailer, or any group of retailers in a given
location, will depend on many factors, including current performance levels, the degree of dependence of
one store on another and the competitive response of traders and centre owners/managers in the area.

It is our view, therefore, that an impact assessment can reasonably be expected to provide an indication
of the trading environment and average trading conditions which retailers are likely to operate within, and
the implications for likely turnover declines or turnover gains, on average, for the retailers involved.




URBIS
NOOSA CIVIC - RETAIL NEEDS ASSESSMENT DEC 2014 MASTER - FINAL                     ASSESSMENT OF ECONOMIC IMPACTS   109