The Milton Keynes Partnership
Milton Keynes Retail Needs Assessment 2006
November 2006

CB Richard Ellis

Kingsley House

Wimpole Street

London W1G 0RE

Tel: 020 7182 2000

Fax: 020 7182 2001

e-mail:

PLANNING/207466/VW/ajl/Milton Keynes Retail Capacity Study Main report.doc

Contents
ContentsPage Number
1.Introduction
2.Retail Capacity Forecasting
3.The National Context: Assessing Retail Capacity and Need
4.The REASN Model Forecasts
5.Conclusions
6.The Vitality and Viability of Central Milton Keynes
Appendices
Appendix 1 – Milton Keynes Explanatory Note on the REASN Model
Appendix 2 – Results of Household Interview Survey
Appendix 3 – Milton Keynes Area Catchment Plan
Appendix 4 – Retail Capacity Modelling
appendix 5 – Results: On-Street Shoppers’ Survey
appendix 6 – Goad Centre Report – Milton Keynes
appendix 7 – Retailers’ Requirements for Central Milton Keynes
appendix 8 – Survey of the Environment – Central Milton Keynes

Milton Keynes Retail Study 20061

Executive Summary

CB Richard Ellis was instructed by English Partnerships in 2005 to prepare a Retail Capacity Study for Milton Keynes. The main aims of the study are: Firstly, to consider the effect of future capacity growth in expenditure arising from the anticipated revised dates for phasing of thecentre:mk and the additional capacity which this may release and; secondly, to assess the potential capacity growth of Milton Keynes in order to provide a robust assessment for any new schemes.

We have assessed the quantitative expenditure capacity available to support further floorspace in Milton Keynes. In doing so, this study reviews the current retail attractions and performance of Central Milton Keynes together with other retail destinations in Milton Keynes, including food stores, retail warehouses and other retail floorspace within the Milton Keynes District.

A new and detailed household interview survey has been undertaken of catchment area resident’s shopping habits; a random sample of 1,500 households was interviewed by telephone. The household interview survey shows Milton Keynes has increased its trade draw from the catchment area for both convenience and comparison goods since the last survey, undertaken in 2002.

RPG9, Draft RSS 9, the Milton Keynes South Midlands Strategy and the Milton Keynes Local Plan recognise the significance of Central Milton Keynes as an important Regional Shopping Centre. Significant new retail development may be required to support the new housing and employment opportunities anticipated in the centre and its catchment area over the forecasting period and, in planning policy terms, Central Milton Keynes is the preferred centre for accommodating this new retail development.

This study expects there will be significant increases in population and per capita expenditure in the catchment area. Indeed, we expect total catchment expenditure on convenience goods to increase by £409M and total catchment area expenditure on comparison goods to increase by £4,107M over the forecasting period 2005-2016. Much of the growth in expenditure on convenience goods is accounted for by the significant growth in catchment area population. However, the significant growth in the catchment area’s expenditure on comparison goods is due to expected growth in population as well as the significant projected growth in spending on comparison goods.

Our retail capacity forecasting therefore found that there will be sufficient capacity for additional convenience comparison goods floorspace in Central Milton Keynes. All capacity figures in this Study are reported against the baseline position of no change to forecast market shares over the forecasting period, unless stated.

Our forecasts for convenience goods floorspace show there is theoretical capacity for up to about 17,200sq m net additional convenience goods floorspace in Central Milton Keynes by 2006. Following the expected opening of a new Sainsbury store at C4.1 by 2007 and a Waitrose food store opening in thecentre:MK by 2011, there would be theoretical capacity for up to 11,300sq m net by 2011 rising to about 12,200 sq m net by 2016, if forecast trends occur. The corresponding theoretical maximum capacity forecasts for the other destinations are about 5,400 sq m net by 2006, rising to 9,000 sq m net by 2011, and further to about 9,300 sq m net by 2016, if forecast trends occur. Overall, we consider that sufficient capacity will arise over the period to 2016 to support the equivalent of at least a further two new food stores in the town centre, in addition to the permitted Sainsbury’s and Waitrose food stores. This could be provided for by a combination of discount supermarkets and/or new smaller convenience stores to support the proposed residential development proposed in Central Milton Keynes.

The forecasts for other destinations identify capacity for the equivalent of at least one new food store outside Central Milton Keynes. The forecast capacity for destinations outside central Milton Keynes locations could be met through extensions to existing superstores or through additional food stores at existing district centres. Clearly, the latter ‘positive planning’ for centres could further enhance the vitality and viability of centres identified by the Council for regeneration such as Wolverton and Bletchley.

For comparison goods shopping, we forecast (under Scenario 1) that there is limited capacity for new retail development (other than that already committed) in Central Milton Keynes if there is no increase in Central Milton Keynes’ market share. However, Milton Keynes is a regional centre. It is at the centre of the Milton Keynes and South Midlands sub-region and significant development is planned for the town including new retail development, offices, leisure uses, much of which will be accommodated in Central Milton Keynes. In light of these new attractions we expect Central Milton Keynes’ market share across the catchment area to grow significantly. Therefore, under scenario 2, we assume a significant increase in Milton Keynes’ market share.

As a result of the forecast increase in expenditure, we expect there to be capacity for up to 5,400 sq m net of new retail floorspace by 2006, rising to 8,000 sq m net by 2011 and rising further thereafter to 48,400 sq m net by 2016. This would be sufficient to support a major extension of the Central Milton Keynes shopping area after the implementation of the planning permissions already granted in the centre.

For other destinations in Milton Keynes, we have forecast that, under Scenario 1, the existing over supply of comparison goods floorspace will not result in new capacity until after 2006, particularly if all existing planning permissions for further retail floorspace are implemented over the forecasting period. However, as population and expenditure in the catchment area increase we expect capacity for new floorspace elsewhere in Milton Keynes will arise, up to 11,275 sq m net by 2011, rising to 28,621 sq m net, if forecasts trends occur.

In considering the capacity forecasts, PPS6 promotes the allocation of retail resources according to the scale and function of a centre in order to ensure an appropriate scale of development matched to the role of the centre within the wider retail hierarchy. As a Regional Centre, any significant scale of provision identified should be directed to Central Milton Keynes in the first instance.

PPS6 also advises that where a retail assessment identifies capacity, it should be considered whether this could also be used to strengthen or regenerate existing centres, and to address deficiencies in the existing network of centres. Therefore, the role of other centres in Milton Keynes, such as Bletchley and Wolverton should also be considered when allocating sites to meet the retail need identified ahead of other development sites.

Central Milton Keynes contains over 353 retail and service units. The centre has an above national average representation of comparison goods units and a below average number of convenience and service goods units. The centre has a low number of vacant units.

Central Milton Keynes is accessible by a choice of means of transport including road, railway and bus. Car parking provision in the centre is particularly good and popular with shoppers. The state of the town centre environment is generally good.

Central Milton Keynes functions well as a shopping destination for comparison goods and has a wide catchment area. Retailer demand for the centre is good and combined with other indicators this is a sign of growth and expansion. The new development planned for the town centre will expand the range of shops available and further improve the existing range of services in the centre.

Milton Keynes Retail Study 20051

  1. Introduction

1.1CB Richard Ellis was instructed by English Partnerships in 2005 to prepare a Retail Capacity Study for Milton Keynes.

1.2The main aims of the study are:

  • Firstly, to consider the effect of future capacity growth in expenditure arising from the anticipated revised dates for phasing of thecentre:mk and the additional capacity which this may release and;
  • Secondly, to assess the potential capacity growth of Milton Keynes in order to provide a robust assessment for any new schemes.
  • Thirdly, to assess the potential capacity growth of Milton Keynes on the basis that the significant new retail development planned for Central Milton Keynes will significantly increase the draw of that centre as a retail destination.

1.3In doing so, we have undertaken an assessment of expenditure capacity or quantitative need, the findings of which are set out in this report. In addition, we have also reviewed the health of Central Milton Keynes in accordance with the key indices set out in PPS6 to provide a review of “vitality and viability”.

1.4Our terms of reference are summarised as follows:

  • To undertake a new household interview and shopper survey to determine shopping patterns in Milton Keynes and its catchment area, to provide a robust basis for the quantitative retail capacity modelling;
  • To take account of expected population and expenditure growth in Milton Keynes and its wider catchment areas;
  • To prepare up to date retail capacity forecasts for Central Milton Keynes and other retail destinations in Milton Keynes, based on the commissioned surveys and forecasted growth, distinguishing between the capacity for additional convenience and comparison goods retail floorspace;
  • The capacity for each in Central Milton Keynes and in other retail destinations in Milton Keynes;
  • To review the “vitality” and “viability” of Central Milton Keynes against PPS6 indicators; and
  • To prepare a report on our findings and conclusions.

1.5The report is set out under the following sections:

  • Section 2 sets out the technical basis of our retail capacity forecasts, and describes the principal data inputs into and the structure of, our REASN Forecasting Model.
  • Section 3 summarises the relevant local, regional and national retail planning policies.
  • Section 4, considers the retail capacity forecasts for Milton Keynes.
  • Section 5 summarises our principal conclusions in relation to the capacity for new retail development in Milton Keynes.
  • Section 6 of this report contains a health check of Central Milton Keynes drawing on the indicators set out in Section 4 of PPS6. This includes a detailed qualitative review of Central Milton Keynes’ retail offer.
  • Appendices include a map of the Milton Keynes study area, Milton Keynes Retail catchment area, the results of the questionnaire surveys and the detailed REASN Model Forecasts.

  1. Retail Capacity Forecasting

Basis of the Retail Capacity Forecast

2.1Section 4 reviews the current retail attractions and performance of Central Milton Keynes together with other retail destinations in Milton Keynes, including food stores, retail warehouses and other retail floorspace in Milton Keynes’ town centres. We have also assessed the quantitative expenditure capacity available to support further floorspace in these locations.

2.2This study therefore includes the preparation of up to date forecasts of the additional capacity for retail floorspace, which will be supportable by increases in the population and expenditure of catchment area residents and visitors. This section sets out the technical basis of our retail capacity forecasts, and describes the principal data inputs into and the structure of, our REASN Forecasting Model.

The CB Richard Ellis REASN Model

2.3There are a number of alternative approaches to forecasting the level of additional shop floorspace supportable in any location, and the retail impact of proposed retail development. Some rely on the use of driving time isochrones in defined catchment areas, whilst others employ gravity models to forecast retail attraction of centres; or assessment of overall market share of available expenditure.

2.4All require an assessment of existing facilities in the area, and the level of expenditure available. Using this data, most then apply judgements to identify the existing trading pattern and the consequences (both positive and negative) of additional retail development.

2.5The effectiveness of the various forecasting methods available varies considerably according to the approach and assumptions used. Conventional gravity models are based on the attractiveness of different centres, and therefore the extent and potential of their trade draw, purely on size and accessibility. In reality, other factors, including the type and quality of retailers, level of parking provision, and the retail environment, can be equally important determinants of the trading pattern.

2.6Forecasting methods on driving time isochrones to determine catchment areas also rely on assumptions and judgement rather than measures of the actual pattern of shopping visits from residential areas to shopping centres, food stores and retail warehouses. Similarly, global market share based methods include a degree of interpretation because they rely on estimates derived from one location being applied to another with different catchment area characteristics and because the result depends substantially on assumptions about the extent of the catchment area in each location.

2.7In response to these CB Richard Ellis has developed its Retail Expenditure, Allocation and Shop Floorspace Need (REASN) forecasting Model. The main difference between our approach and conventional gravity models is that the REASN Model employs the results of a household interview survey to identify the actual shopping patterns in the area and the extent of the existing catchment area.

2.8By this means, it is possible to model realistically existing flows of available expenditure to established town centres, food stores and retail warehouses; as the basis for predicting the existing and future capacity for further retail development.

2.9A methodology and explanation of the REASN forecasting Model is set out in Appendix 1. In summary, the REASN Model utilises the results of the household interview survey as its objective measured ‘base line’, using a step by step approach, to:-

  • Calculate the total amount of convenience and comparison goods expenditure which is available within the catchment area;
  • Allocate available expenditure to centres, and other shopping destinations based on the results of the household interview surveys of shopping patterns; in order to obtain estimates of current sales and forecast future sales in each;
  • Compare the estimated sales with existing floorspace to determine the current trading performance of each shopping destination.
  • Assess the capacity for further retail growth within the catchment according to forecasts of expenditure and population increases.

2.10The REASN Model is a very useful tool for retail planning, and may avoid assumptions about existing trade draw patterns and market shares which are often inherent in other forecasting methods. In particular, forecasts made using the REASN Model have been accepted by Planning Inspectors and the Secretary of State at many Public Inquiries. The Model is subject to continuous refinement, and has been used to prepare the expenditure and retail capacity forecasts set out in this report.

2.11When using the REASN Model capacity forecasts as a guide to future planning policy, it is also important to remember that the further advanced the forecasting date, the less certain the forecast. Thus the forecasts for 2006 and 2011 are more robust than those for 2016. We suggest that the latter forecasts only indicate the broad order of magnitude of retail capacity at that date, as it assumes all the forecast trends continue. For this reason, we recommend that the forecasts should be reviewed and revised on a regular basis (for example every five years) in the light of events; taking account of the effects of any development which has occurred in the meantime.

Principal Data Inputs

Catchment Area and Visitor Expenditure

2.12It was agreed with English Partnerships that a new household interview survey should be undertaken. For this household survey area (described for modelling purposes as the catchment area), we designed and commissioned a new and detailed household interview survey of shopping patterns.

2.13A household survey of shopping patterns was undertaken by DTZ on behalf of thecentre:MK in 2002. The results of this survey informed CBRE’s previous 2002 and 2003 studies undertaken on behalf of English Partnerships and Milton Keynes Council.

2.14For the new survey we reviewed the catchment area used for the previous household survey and agreed that this would be a suitable basis for our own survey.

2.15The questionnaire used for our survey is also similar to that used by DTZ in 2002. This time the questionnaire has been amended to ask respondents where they last shopped, instead of where they undertook most of their household shopping for clothing and footwear. For example;

Where did you LAST purchase your household shopping for clothes and other fashion goods?

Instead of:

Where do you do MOST of your household shopping for clothing and footwear?

2.16In our opinion, asking respondents where they last shopped provides a ‘snapshot in time’ of where people are actually shopping at the time of the survey. We consider this approach increases the number of respondents identifying smaller destinations. In our opinion, when respondents are asked where they shop most often they are more likely to remember visits to larger destinations than to smaller ones.

2.17The questionnaire and relevant results of this survey are included in Appendix 2. Interviewing and data processing took place in May 2005. A random sample of 1,500 households was interviewed by telephone. Between 60 and 100 interviews took place in each zone.

2.18The results of the survey provide a detailed picture of where the residents of Milton Keynes catchment area shop for main food and top up convenience goods shopping, and for eight different categories of comparison goods shopping. They also provide some information on linked trips shopping, where the primary trip generator is main food shopping; and on travel mode.