MCU14/0106 Appendix J - Retail Needs Assessment

    As a consequence of the current underprovision of supermarkets, and the additional demand
     resulting from tourists, it should be expected that supermarkets in the Noosa trade area are likely to
     be achieving very strong trading levels. In turn there would be expected to be strong retailer demand
     for the proposed supermarket space within the proposed development.

    The current supply of retail floorspace serving trade area residents, relative to the number of
     residents in the main trade area, results in approximately 1.17 sq.m of retail floorspace per capita.
     Given that the average provision throughout Australia is around 2.2 sq.m per capita this suggests that
     around 50% of resident’s spending is either dormant (i.e. latent demand), or directed outside the main
     trade area to places such as Maroochydore and Brisbane. This is referred to as ‘escape spending’ or
     ‘leakage’. Alternatively, centres in the trade area could be achieving above average trading levels.

    This broadly based analysis results in two important conclusions of relevance to this assessment:

        Firstly, there is undoubtedly potential to retain a proportion of escape spending by providing a
         better range of facilities and services locally. This ‘source of sales’ would result in diversion of
         retail trade from external centres and would have no impact on local centres at all.

        Secondly, to the extent that local retailers are achieving reasonably strong trading levels, any
         impacts resulting from the subject development proposal would be off a reasonably high base
         and therefore less likely to result in closures than may otherwise be the case. In other words,
         local centres are likely to be reasonably resilient.

    Growth in the retail market is forecast at $271 million between 2014 and 2021, excluding inflation.
     This has the following implications:

        Between 26,600 sq.m and 39,400 sq.m of additional retail floorspace would be warranted by
         2021 based on market growth alone, not including the additional floorspace required to resolve
         current deficiencies.

        Under current circumstances around $100 million of this growth would be spent outside the trade
         area (i.e. 37%), representing an increase in escape spending. There is clearly potential to
         clawback some of this leakage with further retail development in Noosa.

        There is currently a large gap in the market, and this will increase over the forecast period. Once
         again it is readily apparent that the subject development proposal at Noosa Civic will go some
         way towards satisfying this need.

The proposed expansion of Noosa Civic is expected to add a further 21,980 sq.m of retail floorspace to
the trade area. Based on the assessment above, in 2021 the proposed expansion of Noosa Civic will only
account for around 18% of the deficiency in retail floorspace within the trade area.


IMPACT ANALYSIS
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 is 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.

It is important to note, therefore, that an economic impact assessment for planning purposes does not
examine impacts on individual business but rather focuses on ‘centres’ and other areas where a group of
retail establishments exist. In this case we examine a number of designated ‘centres’ as well as entire
postcode areas, some of which include retail facilities within Industrial areas.

A total of 22 key centres have been analysed to determine the extent of impact on these locations
resulting from the proposed development.




iv   EXECUTIVE SUMMARY
                                                                                                                          URBIS
                                                                   NOOSA CIVIC - RETAIL NEEDS ASSESSMENT DEC 2014 MASTER - FINAL