EC 1005 A Local Economic Development Tourism LED

EC 1005 A Local Economic Development Tourism, LED and Retail Lecture 12 June Mc. Intosh

Reading § Mappin G. and Allmendinger P (2000) “Retail Development” in Allmendinger P, Prior A and Raemaekers J (eds) (2000) Introduction to Planning Practice, Wiley, Chichester, pp 191 -214 § Hague, Hague & Breitbach (2011) Regional and Local Economic Development, Chapter 10

Also useful § Planning policy statement 6, Planning for town centres, Office of Deputy Prime Minister, London, ODPM, 2005 § Scottish planning policy SPP 8: Town centres and retailing, Edinburgh, Scottish Executive, 2006 available from § www. scotland. gov. uk/Publications/2006/07/ 26112710/0

§ Although shopping is seldom mentioned as a main reason for travelling it has become an important tourist and leisure activity. (Turner & Reisinger, 2001). § Shopping is a common activity undertaken by people on holiday and can be a motivation for travel (Dallen, 2005).

§ “The more pleasant the urban environment is for walking and socialising combined with a sense of security, the more time is spent on shopping” (Howie, 2003, p 84).

Importance of Retailing § The British Retail Consortium looked at the economic importance of retailing in 2000 and stated that – § Retailing provided jobs for 1 in 10 of the working population § Retail sales accounted for 24% of the GDP § Retail linked to fluctuations in the economy.

Question § What is a town centre? § A town centre and LED – § A place to live; a source of employment; s symbol of a town or city; a place for tourists; a transport hub; a 24 hour city, a focus for commercial and non-commercial activities, leisure and culture. § Using Dundee as our example to what extent are these factors evident in the centre of the city?

Town/city centres § Town centres were traditionally the focus for retail activities. § Assumes the centre offers the maximum access to all. § So, a shop should be able to earn maximum profit if it is in the most accessible part of the town. § Therefore shops willing to pay a high rent.

§ § In theory a simplified picture of land use would entail – commercial use, then industrial ring followed by a residential area and then agricultural areas. In recent years throughout the UK there has been a growing trend of out of centre shopping sites plus new forms of retail and leisure developments.

§ From the 1960 s retail changes in Britain have pointed towards retail decentralisation. § These changes have been brought about by things like more affluence, increased mobility, growth of women working, increase in part-time employment, population changes and changes in social and political attitudes.

§ A more relaxed planning policy approach to retail development was taken from the 1970 s until the 1990 s. § Previously economists would have taken a neoclassical stance and argued that a shop would want to locate in a city centre due to accessibility and opportunity to profit max. This simplified approach is known as bid rent theory.

§ City centres faced competition from edge of town centres and out-of-town centres until the early 1990 s when planning policies were tightened. § Out of centre locations have competitive advantage of cost savings, rents are usually far higher in city centre locations.

§ Planning Advice Notes (PAN) 35 issued in 1989 discussed the difficulties faced by town centres who faced competition from out of town centres. § In order to respond to the challenge from out of town and edge of town centres various planning policies and practices have been attempted to alleviate the problems faced by town centres. These policies are essential in order to protect town centres from competition from edge of town and out –of-town developments. These measures include the re-use of land building for other uses such as housing being developed in the city centre.

§ Out of centre locations are usually far larger than city centre locations. § This allows the retailer to showcase more of his goods. § Easy access and car parking also give them competitive advantage. § Does this lead to a greater choice and competition?

Amongst the causes cited in the BIS published research for the changing face of the High Street were: § pressures on prices exerted by online retailers and large grocery stores; § increased costs including business rates, rents, and the introduction of the minimum wage; § the ease and cost of starting an online business compared to a business on the high street; § the digital delivery of some products (music, books etc) has removed the demand for high street music shops.

§ Do out of town shopping centres help relieve the pressure on town centres for additional retain space? § Or do they lead to the decline of the traditional town centre? § Can they live together? § Are they complementary or competing?

Example - Perth § Newest city in Scotland § A city of vitality and viability or vulnerable? § St John’s centre § St Catherine’s Retail Park

§ The ‘sequential test’ introduced in planning policy in 1996 stated that planning permission for retail and leisure premises should firstly be given to developments within the town centre. § If however a suitable site cannot be found the next location to be considered would be an edge of centre site and only if this was not possible should an out of town site be considered. § Scotland has an additional category ‘other commercial centres’ which are preferred to out of centre sites

§ Furthermore, edge of centre developments must aim to “reinforce the role of the town centre, to reduce traffic congestion and ensure ease of access to the town centre on foot” (SEDD, 1999, p 31). (Scottish Executive Development Department) § Cities must also resist promoting out of centre developments as they would detract from the vibrancy of the existing centre.

§ Out-of-town retail developments in peripheral locations often included in the beginning large foodstores such as Asda or Tesco, then DIY for example, B & Q and now retail parks with furniture, carpet, electrical, toys warehouses, shoe warehouses, pet stores, computer showrooms. Retail parks are now a common feature of any city.

Examples § An early example of a regional major out of town development is the Metro Centre at Gateshead. § In Edinburgh there is the Gyle centre near the airport, also Ocean Terminal in Leith, Edinburgh § Edinburgh is also home to outdoor Fort Kinnaird shopping centre. It is located on the outskirts of Edinburgh beside Portobello.

Vibrant City Centres § Town centre management schemes have developed a great deal since the 1980 s and are used to aid the city centre retain competitiveness. § City councils or Chambers of Commerce often fund the position of City Centre Manager. § The managers play a role in ensuring the city centre remains vibrant and proactively pursue retail inward investment.

§ There also other opportunities that city centres can take in order to improve their place competitiveness as well as town centre management. § These can include the setting up of a partnership, environmental improvements, having a development plan framework, encouraging housing, providing parking, improving pedestrian access and encouraging shop front improvements.

§ In recent years there have been commercial changes to the way shops work including allowing for Sunday opening. § The trend in people eating out more has also allowed for new services such as converting premises to pubs and clubs. This means the city is now in use 24 hour s a day.

§ However, although progress has been made, out of town developments are still very popular i. e. parking is plentiful and normally free. § City centres can still suffer from various problems such as vehicle/pedestrian conflicts. There is also a problem with decline through shops lying vacant or turning into charity shops. This can badly affect the image of a city. § There can be a big contrast between the modern city centre shopping centre and the streets outside.

What makes a retail centre successful § Certain aspects are very important, these include the location – if shoppers cannot reach the location easily it will not be a success therefore there must be a means of public transport available and parking facilities.

§ Any new retail centre should pay close attention to design, for example what type of shoppers are they trying to attract. The new Overate centre for example, is particularly attractive to shoppers as it is well laid out with no dead space, curves around the church and is one sided with an attractive glass front.

§ Amenities such as the provision toilets, seats to relax in, food courts, cash machines and safe well lit parking areas are all important. § Events can also lead to success, various events can be held throughout the year. § The mix of tenants and finally the management also play a vital role.

§ Ringer (1989) goes further and suggests there are seven secrets of success for a retail centre – § Location, design, amenities, promotional events programme and § Planning of the circulation of pedestrians within the centre – how it is laid out to maximise potential of each unit. § The tenant mix and § Management – to keep the centre clean and safe. § Ringer (1989) “Is the Shopper Really King? ” Estates Gazette 8945, pp 109 -112

Summary § Off centre retailing has had a great impact on town centres especially on town centres already facing decline. § Town centres must project a positive image otherwise investors may go elsewhere. § Question § What do you believe are the current threats to town centres?

Scottish Executive web links § http: //www. nrpf. org. uk/PDF/nrpftopic 08_se quential. pdf § http: //www. scotland. gov. uk/Publications/19 99/10/pan 59 -root/pan 59 § http: //www. scotland. gov. uk/Publications/20 07/12/24105030/0 § http: //www. bcsc. org. uk/research. asp

Further reading Collis C, Berkeley N and Fletcher D R (2000) “retail decline and Policy Responses in District Shopping centres” Town Planning review, 71(2), pp 149 -168

Revision – some of the topics we have covered § § § § § Theories of LED Porter and Clusters Tourism, cities and regions, place competitiveness Foreign Direct Investment City centres and out-of-town shopping Community economic development Partnerships Regional policy – EU Business development

Reminder - Foreign Direct Investment § FDI: acquisition, establishment or increase in production facilities by a firm in a foreign country. § Mergers & Acquisitions l Reinvestment of Profits § Features of FDI l l l Involves ownership and control long term investment package of financial, managerial, technological inputs

Incentives to Attract MNCs § Most regions ‘open their doors’ to FDI l l Assumption is that there are net benefits Incentives • • Grant per job created Land or Factory Space Training Grants for Employees Tax Holidays § Criticism - competition for mobile investors seen as wasteful

Foreign Direct Investment § Ernst and Young UK attractiveness survey Scotland § Scotland attractive to foreign firms § Scottish Government Economic Strategy § 6000 positions created in Scotland during 2011 § 50% increase on the previous year § UK’s leading location for FDI § Amazon, Samsung, Mitsubishi, Glaxo. Smith. Kline

Exam § § Answer 2 questions from a choice of five Unseen exam paper! Mock Question – Scotland has been fairly successful in attracting Foreign Direct Investment in recent years. Analyse the benefits of attracting FDI to Scotland.

§ Some things you might include in this answer therefore might be – § What is foreign direct investment § Rationale/motives - Globalisation § Why would companies such as MNCs invest in overseas locations, for example to gain entry into a new market or reduction in labour costs. § Background to FDI in Scotland

Foreign direct investment (FDI) is a key element in international economic integration. FDI creates direct, stable and long-lasting links between economies. It encourages the transfer of technology and know-how between countries, and allows the host economy to promote its products more widely in international markets. FDI is also an additional source of funding for investment and, under the right policy environment, it can be an important vehicle for development.

Revision example § What are the mechanisms for FDI – mergers, acquisitions § Include examples of FDI in Scotland such as electronics or biotechnology firms § Locational decision making/competitive advantage? § Benefits/incentives/regional policy/government initiatives to enhance competitiveness/cheap labour/availability of labour/skills/cultural linguistic and geographical locational advantage/spillovers/boosts national income/job creation/technology and knowledge transfer § Any criticism/costs/weak linkages/problems for peripheral regions § Where does the FDI come from, for example USA § Provide some statistics (sourced) for example Ernst and Young 2012 UK attractiveness survey Scotland (online) § Include some academic sources. (Books or journal articles)

Final Words § Good luck with the exam and coursework § I hope that you have enjoyed the module. § I welcome any feedback you would like to give me. § Keep in touch once you graduate and let me know how you are getting on. § Linked. In or e-mail