Market Failure?: Can the traditional market survive? - Communities and Local Government Committee Contents

Memorandum by Darlington Borough Council (MARKETS 01)

  1.  This information is supplied by their Markets Manager, Peter Wilson who has been in post since early 1973, ie almost 36 years.

  The Council took over the control of the Charter Market from the Bishops of Durham in 1854 and can trace their history back to 1003 and the present range of undertakings remains substantial;

    A six-day per week Covered Market (opened in 1863) housing 73 stalls and 18 periphery shops (added in July 1954),

    A twice-weekly outdoor General Market held every Saturday & Monday,

    A bi-monthly outdoor Craft Market (second & fourth Fridays),

    A monthly outdoor (FARMA) accredited Farmers Market (third Friday),

    A monthly outdoor Food Market (first Friday).

  In addition, the annual calendar includes a number of very large (ie up to and in excess of 300 stalls) "event markets". Examples are the French & Continental, Green & Eco, Summer Spectacular, Christingle & Winter Wonderland. These can generate (evidenced) footfall in excess of 325,000 (which is three times the Borough's population) so there effect on the town centre is significant.

  Darlington is also very proud to have been awarded the NABMA Market of the Year (Special Attractions) 2008 title and the UK's Northern regional title "Greenest Market" by NMTF, again in 2008.

  These demonstrate a market town where markets are very much part of our rich heritage, yet they also represent a strong feature of the modern day shopping experience.

  I now turn to the focus of the Committee's inquiry:

    — How has the picture changed over the past 10 years?

    — Are the numbers and types of markets in decline? If so, why?

    — Are there obstacles preventing the creation of more markets?

    — Are there obstacles hindering the successful business of existing market operators and traders?

    — What has been the impact of specialist markets eg continental and farmers markets, and do such markets integrate successfully with older markets?

  2.  Markets have to compete with all other forms of retailing, including the Internet.

  Retailers have diversified (ie forecourt stations now sell a wide range of produce) and some target market customers (ie Morison's "market street", Pound shops, Wilkinson's etc).

  The growth in Sunday trading affects markets.

  The growth of Car Boot sales affects markets, much more so where they become debased and introduce new goods.

  Transport policies and access to parking affect markets.

  Pedestrianisation can alter footfall patterns in town centres.

  Planning restrictions on signage affects markets; particularly the smaller specialist types ie farmers.

  Lack of finance, including re-investment has left many markets starved of funding, even though they have been a net contributor for hundreds of years.

  The great majority of markets do not offer "cashless sales".

  There is no recognised form of trader training with acknowledgement of transferable skills (then leading possibly to licencing/registration) so to build upon the confidence of shoppers.

  Costs of travel including fuel, limit traders access to markets.

  Lack of (previous) cohesion from the leading industry bodies has disadvantaged markets—this is now addressed through the RMA and its APPMG—very much welcomed and no doubt partly responsible for this inquiry.

  3.  In Darlington, which indeed reflects the national picture, the size of the general outdoor markets has seen significant reduction (albeit the trend began over 10 years ago), due in part to the above factors. Therefore account must be taken of current shoppers expectations and the introduction of the specialist markets, in all their guises has helped to reverse this effect. They can be made locally to integrate very well but do then require support from the Town Centre Manager. Many factor in entertainment to extend the shopping experience and include all demographic types.

  4.  There is a saying, "that in a shop you buy something whereas in a market you are sold something". Some people just seem to have the gift of selling and l have witnessed some "ethnic minorities" display a natural tendency towards this. However most traders (a good example of this is diversifying farmers) either learn this critical business skill or suffer throughout. One of the advantages of market trading is that it is very easy to access, but this also works in reverse—most traders fail to put together a proper business plan, there is (to them) no real access to retail training, support networks etc. The basic question must also be asked, why do they want to become self-employed as a market trader? Large-scale unemployment in the past led to migration into this sphere of retailing but unless the person has business acumen, they will not develop and expand their business, if at all maintain it.

  5.  The success of any business rests not with what they sell but with what they buy…this determines the interest shown by customers and provides for the profit margins. Market traders now more than before require access to "wholesale" goods and many of these have ceased to trade themselves as markets have shrunk. Again a key skill of securing goods is required, even to the potential of direct importing/internet purchasing.

  6.  In simple terms a market is a concourse of buyers and sellers, all operators need is the skill and resource to achieve this, so creating markets even now does happen but the most important feature is to look after the customer—before considering the trader, then the operator. This establishes and maintains sustainability because traders, despite their peripatetic nature, rely on developing a relationship with customers who need to have the confidence they will "be back" to make the offer and deal with any refunds etc.

  Local authority markets l would argue have additional accountability/responsibility to all concerned but many undertakings have gone or transferred into the private sector through lack of funding—either to maintain the resource or train their Officer's to an acceptable level of qualification.

    What social and economic effects do traditional retail markets have on their local communities?

    What qualities contribute to a successful market delivering social and economic benefits, and are there examples of best practice that have a wider application?

  7.  Why have markets at all? They pre-date all forms of trading but now surely many of the goods on display can be found elsewhere?

  This is true in part but it is also true that many town centres replicate each other (multiples can be found on most high streets) but markets are individual to the immediate locale. They provide many benefits, some of which are;

    low level entry to developing entrepreneurial skills without the constraints of leases, contracts etc,

    self-employment opportunities,

    trader's peripatetic access to a range of towns and cities,

    markets and particularly the outdoor types are fully accessible to traders and customers alike and so create social inclusion. There have been "waves" of certain trader groups ie Jewish, Indian & Pakistani and latterly Continental & Eastern European,

    retail diversity and added interest (to include atmosphere, sounds, smells etc)—the range and scale of goods can be infinitely flexible depending on the mechanisms of management,

    the scope of markets is flexible—inviting farmers, craft persons, continental traders, auto marters, car booters etc to engage in trading,

    evidence reveals that a higher percentage of revenue from these independent traders is retained for the benefit of the local economy,

    customers genuinely feel that they belong in their local market and use the locale to maintain networking relationships. Some traders report generations of customers and customers identify with their own market town image,

    our markets provide a free stall to all non-profit making groups and a free stall to any local business (regardless of type) essentially as a physical advert—thus we engage with all sectors of the community.

  8.  The difference between a small failing market (that has little diversity of product, is uninteresting, does not have "critical mass" etc) and a large successful market (that has these good qualities) is size—because size, properly managed overcomes these bad qualities. In previous times general outdoor markets dominated and l believe they will not return to that level so size (in terms of how all patrons of markets perceive them) is achieved by a critical mass of all the markets operated in that locale. Diversity is key—their undoubted popularity demonstrates they meet customer's expectations in delivering a high quality of choice. In addition for farmers markets etc they deliver on agenda's for local choice and access to food.

  9.  Best practice can be learnt through a variety of mechanisms but the imposition of performance indicators has not achieved this and cannot relate to the private sector. Markets are very diverse and their unique local character will not reflect the full type and range so comparisons are difficult to make. However the Retail Market Alliance (which does include all those connected with the industry) can introduce initiatives to demonstrate best practice—particularly where individual elements can be taken back by individual operators, traders etc to their own markets where they are "fit for purpose" and relevant. An example of this is the NABMA and NMTF competitions where the criteria submitted can be readily disseminated and if feasible, applied locally. It is in effect an extended form of networking, which layers on top of the NABMA & NMTF structures that already have regional & national representation—even to the APPMG. These organisations ought to have sufficient depth, expertise and experience to deliver nationally applied agenda's. Here l would as examples, proffer trader training and registration through the NMTF and funding streams, consultations and management (to include a national set of byelaws, regulations etc) through NABMA. To achieve these and thus overcome many of the existing barriers stated herein they require a national mandate from Government.

    Does local government support markets effectively?

    What are the advantages and disadvantages of local authorities having powers to operate markets?

    Does central government support markets effectively? If not, what additional support should be provided?

    Could central government make better use of markets to achieve national goals, particularly with regard to social cohesion, health and regeneration?

    Do local and national planning regulations support or hinder the development of markets?

    Do licensing regulations support or hinder the development of markets?

    What improvements could be made to the planning and licensing regimes to aid the development of markets?

  10.  I think here you must begin with the questions of why and how local government first became engaged with market operations.

  As previously stated, markets pre-date all forms of retailing but such a strong force of economic influence quite naturally required regulation and control. The power to hold markets, regulate them and charge a toll was granted to achieve this (in the early days usually by Royalty to a position of influence which no doubt engineered reciprocal benefit). This also demonstrates the existence (and continuing need) for such Charter markets to have protection—otherwise the benefit (if freely obtainable to a rival) was null and void.

  The benefits later transferred to Local Boards who were then controlling and regulating such aspects—many such as Darlington bought these rights. Without local (government) involvement there would have been no regulation or structure to the proceedings. Of course with control comes the power to levy fees (much as any landlord imposes a rent).

  11.  Local authority managed markets for many years enjoyed a position of influence and derived a steady income stream from the tolls applied. They did in many areas seek to improve the trading conditions for all, and examples of this are the build of "covered in markets", cleansing, refuse, weighing of goods, smoking, aisle clearance, meat and general provisions to be fit to eat, and the separation of livestock sales and butchering of meat into other areas to improve hygiene etc. Other examples are local byelaws and regulations covering the hiring of (farm) labour, sales of pets etc many of which were later dealt with through nationally applied legislation. These are all contained in a set of Byelaws that were sealed here exactly 100 years ago. It is true to say though that re-investment, particularly in the covered markets did not reflect that income and many now cannot offer a structure that can equally compete with modern trading demands and customer expectations. Those that have been "modernised" can, so all that is required is the access to funding—the refurbished markets demonstrate they still very much have a place in the retailing sphere.

  12.  Equally political, financial and management structures in the local authority must positively support the markets. Managers must be trained to have the skills and traders must be supported to become established and prosper. Local authorities through their extensive networks, town centre managers, regeneration units etc can act directly or as a conduit to bring about this support. As an operator or landlord of a commercial enterprise that influences the local economy, they accept political accountability and moral obligations to the local electorate. The markets that have transferred to the private sector have done so because these attributes have been allowed to fail. A private market operator will include most if not all of the local authority regulations, even to include the "charter protection" to maintain the markets. Remember also that the planning and licensing regulations must be equally applied to them so there is no actual proof that a private sector market must be better than a local authority market; each can possess the resources and skills to operate successfully—for the benefit of the local area.

  13.  Local authorities are however more likely to engage with the whole community, ie businesses, transport users of all types, Town Centre Managers, Town Centre Partnerships and Forums, Disability and other such stakeholder groups. Indeed in Darlington a constant feature of all consultative processes is the active use of the markets to engage with the community. The NHS & PCT use the markets in a similar way and sponsor Food Festivals (with food choice/purchase/cooking demonstrations et al) to meet their agenda targets/aspirations. Local authorities manage Planning, Licensing, Trading Standards and Environmental Health Officers who can jointly contribute to a successfully managed market operation. This can be achieved through local community involvement in a transparent and accountable manner.

  14.  Markets are though a commercial enterprise and the financing arrangements should reflect that. They should be run on a financially independent basis with revenue being used to maintain the business and access (in common with other qualifying applicants) to external funding/capital injection. To use the monies to supplement other uses and see the markets suffer from a lack of investment would not make them sustainable—there is sufficient proof of this already.

  15.  Mention has already been made to markets positive contribution to social cohesion—they are fully accessible to all users and the recent creation of farmers markets promotes this further, in some cases linking the rural to the urban. The presence of food stalls is increasing in line with the demands of the customer and national agenda's too. To maintain their unique role, markets readily adapt to promoting healthy eating and access to local food/drink—assisting also the environmental concerns.

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