SME Business News

Government proposals that new out of town supermarkets should be prevented if they negatively impact on smaller shops, have been welcomed by small business groups.

However there is concern that the scrapping of the current ‘need test’ is unnecessary until the new system is proven, with businesses sceptical whether the new policy will afford them the same robust and objective criteria for assessing the likely impact of a new development on an existing centre.

Communities secretary Hazel Blears responded by saying, “That is why we need to ensure that our policies maintain their effectiveness and they are responsive to future challenges.

“We need a policy which provides the right degree of protection for smaller retailers who are facing very challenging trading conditions and increased levels of competition.”

The proposed changes mean that an ‘impact test’, will use factors such as consumer spending, loss of trade, retail diversity, and impact on town centre investment would be taken into account.

The current ‘need test’ means planners are only obliged to consider whether the market has capacity for a new out-of-town shopping mall. The government claims that this has “unintentionally stifled diversity and consumer choice”.