Why do modern London housing developments always come with supermarkets?

Oh, good. Image: Rachel Holdsworth.

Douglas Adams once theorised that the end of civilisation would be brought about by the Shoe Event Horizon: the point at which every shop was a shoe shop, and it wasn’t possible to buy anything else. Were he alive today, it’s possible he’d modify his theory and use mini supermarkets instead.

There’s a noticeable pattern in which new housing developments – not necessarily very tall or large ones – fill high street retail units with chain stores. Sometimes these are coffee shops; but often they are supermarkets. The pattern is familiar in many areas, but let’s take a detailed look at one: the London borough of Lewisham.

To start: a smallish development next to Hither Green station. The Biscuit Works site is a former factory/warehouse, converted to mews houses and flats with two retail units facing onto the street.

Vinit Patel, whose family owned two businesses on the same street and moved their pharmacy into one of the new spaces, says the original intention was to divide up the larger unit to be more suitable for local small businesses. Several residents expressed interest – but Patel says they met with little response.

In April 2014, developer MacDonald Egan sold the retail space to London & Central Securities. In May 2014, that company applied to the council to change planning permission from A3 (cafe/restaurant) to A1 (retail), saying the units had been “unsuccessfully marketed since April 2013”. Suspicion grew among local business owners that the intention was to lease the space to a supermarket chain – a suspicion borne out by a recent planning permission documents submitted by Sainsbury’s. Both developers have been approached for comment but have not responded.

Another supermarket. Image: Rachel Holdsworth.

Residents and local business owners aren’t happy. Over the last decade there’s been a concerted effort to transform what was a fairly scruffy area into a thriving shopping zone with the community at its heart. The street is now stacked with chichi independent shops, reflecting the area’s growing gentrification. Locals worry about the impact a new supermarket will have on those people who took a chance starting their own businesses, in terms of where people shop and when its lorries make deliveries. (The council recently rejected a request by Sainsbury’s to extend delivery hours.)

One big supermarket, argues Patel, will have a “disproportionate impact on the area” that three smaller units wouldn’t have.

Of course, the Sainsbury’s will get used. It’s in a high foot traffic area, and even with a rather good Nisa opposite and five other chain supermarkets in less than a 15 minute walk, Sainsbury’s is onto a winner. Is everybody else, though?

The Biscuit Works story isn’t an isolated story, but one that’s illustrative of a wider phenomenon.

In Lewisham Gateway, a cluster of residential towers rising around the station, a Sainsbury’s Local and an Asda have just opened opposite each other in the ground floor of two new developments. They’re about 50 metres away from an existing Tesco Express, and less than 10 minute walks from big Tesco and Sainsbury’s stores. (Asda was so keen to open this store that, even though the council designated the space non-retail, the supermarket chain appealed to the planning inspector.)

There’s also a redevelopment happening at the Leegate Centre, where an existing – fairly down-at-heel – shopping centre is being transformed into 230 homes focused around a large Asda store. This is odd, given it’s directly opposite a large Sainsbury’s. Councillor Simon Hooks explains the developer, St Modwen, insisted it needs an anchor store to make the site viable; some sections of the community have expressed concerns about which community stores will survive.

The two-mile stretch of road between Catford and Lewisham is topped and tailed by large Tesco stores. In between, until recently, two Express stores beneath low-rise housing. But one of those Tescos recently closed, with the retailer confirming it was for lack of custom, showing the limits of such a blanket strategy.


Attack of the clones

It doesn’t have to be this way. Lewisham Council’s pioneering modular development for social housing also has a high street frontage. The council deliberately filled the space with local, independent businesses, including a cafe and a co-working space. Anna Burton of social enterprise Meanwhile Space, which operates three of the units, says: “Lewisham is a borough with one of the highest levels of businesses starting up. At the initial stages we had over 120 applicants wanting space in the building.”

Galliard is also doing something different in Deptford. Its luxury Distillery Tower skyscraper has given over commercial space to local arts festival Deptford X. Festival director Patrick Henry says Galliard has given them studio space, rent three, for three years. “They’re also making a contribution to our running costs, so they’ve made a serious investment in us as a long-established local cultural organisation and charity.” (The remaining units in the tower are currently unoccupied.)

Craig Fisher, managing director of agents CF Commercial, says that “historically, commercial landlords would have picked mainstream brands on account of their rock solid covenants and low risk profiles. But increasingly many are realising the long-term value add a smaller or independent operator can bring, by driving footfall and helping create a real distinct 'sense of place'”. So why are so many mini supermarkets appearing on our high streets?

Primarily, supermarkets are keen to take advantage of the glut of new space. While it may look like the so-called “Starbucks strategy”, where chain coffee shops would blanket an area in order to drive competitors out, Tesco says these units “tend to provide the scale our customers want. They also retain an active frontage onto the high street, helping to support retail in local communities.”

Similarly, Sainsbury’s maintains that “due to London’s dense residential population, these small stores can trade well alongside each other and other traders and businesses, by drawing trade from different areas. Experience has shown us that Sainsbury’s smaller shops bring benefits to other businesses such as increased footfall, investment and linked shopping trips.”

Another supermarket. Image: Rachel Holdsworth.

Developers are unwittingly helping supermarkets with their growth plans. Councillor Damien Egan, who has cabinet responsibility for housing in Lewisham, says that developers often don’t want to fit out the units themselves.

He cites the decade-plus old Meridian South development, where several food businesses were keen to move in – but the upfront costs of installing fixtures and ventilation were too much. The only commercial outlets in the development now are a gym and… a Tesco Express.

For the last year, Lewisham Council has been telling developers to fit out their commercial units. It’s a strategy that still needs assessment to see if it’s working, but Egan says it’s crucial for the area to get a commercial balance. “Local businesses need to compete on a level playing field,” he says. “Diversity of retail makes an area a destination.”

This is a bigger issue than homogenisation of our high streets, though that is also a major problem (one I’ve banged on about before). Lewisham has more small businesses than any other area of London, yet between 2002 and 2012 the borough lost 16 per cent of its commercial space.

For SMEs to thrive they need office, pop-up and small retail space. Developers have a responsibility to ensure their commercial units serve the diversity of the communities they’re building for.

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Two east London boroughs are planning to tax nightlife to fund the clean up. Will it work?

A Shoreditch rave, 2013. Image: Getty.

No-one likes cleaning up after a party, but someone’s got to do it. On a city-wide scale, that job falls to the local authority. But that still leaves the question: who pays?

In east London, the number of bars and clubs has increased dramatically in recent years. The thriving club scene has come with benefits – but also a price tag for the morning clean-up and cost of policing. The boroughs of Hackney and Tower Hamlets are now looking to nightlife venues to cover these costs.

Back in 2012, councils were given powers to introduce ‘late night levies’: essentially a tax on all the licensed venues that open between midnight and 6am. The amount venues are expected to pay is based on the premises’ rateable value. Seventy per cent of any money raised goes to the police and the council keeps the rest.

Few councils took up the offer. Four years after the legislation was introduced, only eight local authorities had introduced a levy, including Southampton, Nottingham, and Cheltenham. Three of the levies were in the capital, including Camden and Islington. The most lucrative was in the City of London, where £420,000 was raised in the 2015-16 financial year.

Even in places where levies have been introduced, they haven’t always had the desired effect. Nottingham adopted a late night levy in November 2014. Last year, it emerged that the tax had raised £150,000 less than expected in its first year. Only a few months before, Cheltenham scrapped its levy after it similarly failed to meet expectations.


Last year, the House of Lords committee published its review of the 2003 Licensing Act. The committee found that “hardly any respondents believed that late night levies were currently working as they should be” – and councils reported that the obligation to pass revenues from the levy to the police had made the tax unappealing. Concluding its findings on the late night levy, the committee said: “We believe on balance that it has failed to achieve its objectives, and should be abolished.”

As might be expected of a nightlife tax, late night levies are also vociferously opposed by the hospitality industry. Commenting on the proposed levy in Tower Hamlets, Brigid Simmonds, chief executive at the British Beer and Pub Association, said: “A levy would represent a damaging new tax – it is the wrong approach. The focus should be on partnership working, with the police and local business, to address any issues in the night time economy.”

Nevertheless, boroughs in east London are pressing ahead with their plans. Tower Hamlets was recently forced to restart a consultation on its late night levy after a first attempt was the subject of a successful legal challenge by the Association of Licensed Multiple Retailers (ALMR). Kate Nicholls, chief executive at the ALMR, said:

“We will continue to oppose these measures wherever they are considered in any part of the UK and will urge local authorities’ to work with businesses, not against them, to find solutions to any issues they may have.”

Meanwhile, Hackney council intends to introduce a levy after a consultation which revealed 52 per cents of respondents were in favour of the plans. Announcing the consultation in February, licensing chair Emma Plouviez said:

“With ever-shrinking budgets, we need to find a way to ensure the our nightlife can continue to operate safely, so we’re considering looking to these businesses for a contribution towards making sure their customers can enjoy a safe night out and their neighbours and surrounding community doesn’t suffer.”

With budgets stretched, it’s inevitable that councils will seek to take advantage of any source of income they can. Nevertheless, earlier examples of the late night levy suggest this nightlife tax is unlikely to prove as lucrative as is hoped. Even if it does, should we expect nightlife venues to plug the gap left by public sector cuts?