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

Memorandum by the Retail Markets Alliance (MARKETS 13)

  This submission is made on behalf of the Retail Markets Alliance (RMA) which represents the four major organisations involved in the markets industry in the UK. The RMA was formed in 2008 with the intention of representing the views of the markets industry on major issues, and comprises the following organisations:

    — The National Association of British Market Authorities (NABMA);

    — The National Market Traders' Federation (NMTF);

    — The Association of Town Centre Management (ATCM); and

    — The National Farmers' Retail and Markets Association (FARMA).

  It was drafted by Jrys Zasada, Policy Development Manager for NABMA.

  The Retail Markets Alliance works closely with the All Party Parliamentary Markets Group (APPMG) and particularly the Chairman of the Group, Ann Coffey MP (Stockport) and its Secretary Brian Iddon MP (Bolton South East). Over the last two years the APPMG has been particularly active with the launch of the Markets Policy Framework and special events such as the recent reception to present awards to the "Greenest" markets and market trader.

  As can be seen in the submission, more relevant and comprehensive information on markets will become available to the RMA during the year. We would like, therefore, to be included in any oral evidence sessions to ensure that the Committee has the latest information.


  1.  Markets in the UK have been undergoing a transformation over the past decade. This change has been led by innovation—in strategic and operational thinking, and in recognising the need to respond to the needs and aspirations of modern consumers. Examples of this include the development of farmers', Christmas, organic, arts & crafts and continental markets, as well as the modernisation of some traditional street and indoor markets. They are attracting new businesses and entrepreneurs into the sector, by acting as "business incubators", though more needs to be done to encourage this economic growth.

  2.  The change processes underway also recognise the positive environmental contribution that markets can make—reduced packaging/waste, increased waste recycling, providing local access so reducing customer travel, and embracing local and organic produce.

  3.  The popularity of these markets also demonstrates the continuing role that markets can play, not just in the retail high street, but also as social spaces. They provide meeting points for communities and create local jobs. The social and cultural diversity of market traders and customers is testament to their success.

  4.  There is also growing recognition of the contribution that markets can make to national policy issues such as the food and health agendas. In addition to providing access to fresh fruit and vegetables at cheaper prices than supermarkets, many markets are now using their role as "community hubs" to promote healthy eating and lifestyles. Food remains one of the key drivers for change and innovation in wholesale and retail markets in the UK.

  5.  The Markets Policy Framework 2007, produced by the Retail Markets Alliance and launched by the All Party Parliamentary Markets Group (APPMG), identified that successful markets contribute to the social, environmental and economic well-being of the nation, by:

    — Providing a sense of place.

    — Being part of the nation's cultural heritage.

    — Remaining an important element of the economy, particularly in relation to independent retailing, local employment and business start-up opportunities.

    — Offering local access to fresh produce and other commodities.

    — Reducing environmental impacts eg by eliminating excessive packaging/waste.

  6.  However it is not all good news. Many traditional markets, market operators and traders have failed to grasp the need for change. These markets are in decline and it is very likely that a significant proportion of them will close, unless radical action is taken.

  7.  There is also an historic lack of research and data relating to the markets sector. Although some progress is being made, the need for accurate and up-to-date information is a serious shortcoming and must be addressed.


  8.  Recommendation 1—simplify central government's relationship with retail and wholesale markets by appointing a Minister with responsibility for markets, ensuring that all relevant departments "think markets" when considering policy and legislative change, and have named contacts within relevant departments responsible for liaison and communication with the markets sector.

  9.  Recommendation 2—support and commission, at central and regional government level, further research into the scale and value of retail and wholesale markets in the UK.

  10.  Recommendation 3—promote business start-up opportunities on markets as part of a national scheme, in partnership with regional and local government.

  11.  Recommendation 4—encourage Sector Skills Councils to develop specific learning and skills material for the markets sector.

  12.  Recommendation 5—ensure that PPS 6 Guidance specifically addresses the issue of supporting independent retailing/markets.

  13.  Recommendation 6—encourage local planning authorities to produce Supplementary Planning Documents in relation to markets and market developments.

  14.  Recommendation 7—encourage local authorities to recognise the importance of markets in delivering the wider policy agenda. This should include the appointment of a "champion" for markets to ensure they receive appropriate recognition.

  15.  Recommendation 8—encourage local authorities to invest in their markets, particularly where markets currently produce a trading surplus.

  16.  Recommendation 9—encourage local authorities to produce clear policy guidance in relation to the holding and licensing of markets within their administrative area.

  17.  Recommendation 10—repeal the Pedlars Act 1871 (as amended) and ensure that the licensing of all street trading is in the hands of local authorities.

  18.  Recommendation 11—amend the exemption contained in the Town and Country (General Permitted) Order 1995 so that markets above a particular size are outside the exemption.

  19.  Recommendation 12—consider the codification of the term "farmers' markets" so that the term can be protected by law.


How has the picture changed over the last 10 years?

  20.  One of the problems facing the markets industry is an historic lack of information and research into the sector. Many market operators across the country undertake local surveys but little has been carried out nationally to measure the cumulative value of a market.

  21.  The report of the First National Retail Markets Survey ("The Rhodes Study") was launched in 2005. The research and report were jointly funded by NABMA and the NMTF. The main aim of the survey was to establish and identify:

    — the number of markets operating across the country;

    — the locality of the market;

    — the type of market;

    — stall occupancy rates;

    — the number of market traders;

    — market trader ethnicity;

    — the number of people employed across the market industry;

    — the number of shopping visits per year;

    — all turnover by both the operator and at the stall; and

    — trends using data from 1998 to 2004.

  22.  The study revealed the following headline figures:

    — Over 1,150 retail markets are operated within the UK.

    — Over 150,000 stalls are available each week.

    — The market industry offers employment to more than 96,000 people.

    — Over 46,000 market traders work across the UK.

    — Over £1.1 billion spent at market stalls each year in the UK.

    — The average stall occupancy rates are 75% and falling.

    — Over 435 million shopping visits per year.

    — Over £125 million turnover by market operators each year.

  23.  A PhD studentship (the first to look at retail markets in the UK) is currently underway investigating the changing place of traditional food retailing in English retail markets. The results are not yet available, but the study includes developing a national markets database and this is already showing a significant increase in the number of UK retail markets. This is largely due to the growth in specialist markets, including farmers' markets and "country markets", which had not been recorded previously.

  24.  Farmers' markets, whereby stallholders only sell what they produce/make, are drawn from an area that is local to the market—typically 30 miles, and the principal stallholder is involved in production (so able to discuss farming/production practices with shoppers) were initiated in 1997. FARMA research (2008) identified some 800 farmers' markets across the UK (c.700 in England).

  25.  They have enabled the return of craft & traditional foods by creating a regular alternative to conventional supermarket food chains. They reconnect farming with their local community and can enable a rural/urban dialogue.

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

  26.  It is a mixed and complex picture. It is clear that some markets and market types are in decline, but equally many markets are thriving.

  27.  The Rhodes Study concluded that General Markets across the UK, the core of most market operators business, are in decline. It also concluded that there had been a significant growth in farmers' and other specialist markets. This view is supported by the Review of London Markets 2008, commissioned by the London Assembly, which stated that "There are around 180 retail markets in London today—63 more than 10 years ago and more than twice as many as had previously been thought." It also noted that "A significant number of borough-managed street markets have shrunk or closed down in the past 10 years.", and concluded that "The vast majority of new retail markets are privately run farmers" or specialist markets: at least 47…have been established across London in the last 10 years. This sector is "thriving and undergoing a popularity surge across the country."

  28.  There are many factors that can contribute to the decline of markets.

  29.  Today's consumers have more choice, more mobility and higher expectations, and find the more modern centres/supermarkets increasingly attractive. Their "convenience", however, may be at least partly due to a lack of alternatives. The resurgence of specialist food markets shows that a market at the end of the street can be both convenient and attractive, providing there is good access and councils recognise the importance of customer parking.

  30.  The trend towards shopping on line also continues to grow.

  31.  Regeneration of our towns and cities often results in a shifting of the commercial/retail centre, leaving markets isolated. Equally, regeneration can result in dispersal of the market's traditional catchment population. The result is shoppers' "footfall" being moved away from the traditional retail markets. Regeneration can also negatively affect the accessibility of markets by diverting public transport away from traditional markets, and by increasing the availability of car parking (sometimes free or subsidised) as part of their developments.

  32.  Retail markets have also experienced a lack of investment over the years with local authorities (the principal market operator) choosing to invest in services of higher priority, eg housing, social services and education. Hence, some market facilities now look tired compared to new modern retail facilities. Equally, many traditional retail markets that were "modernised" in the 1960s and 70s now appear as concrete bunker-like buildings that do not appeal to modern shoppers.

  33.  The lack of investment in markets consists of more than just capital. The failure of many local authorities to recognise the strategic value of markets, coupled with local government reorganisation, has had some negative consequences. Many local authorities see markets as a problem that needs to be controlled and managed, rather than a vibrant part of community life. The management responsibility for markets within local authorities varies significantly, ranging from Regeneration, Economic Development to Parks and Leisure, and even Printing. The calibre of manager can also vary considerably, and the common "regulatory" approach taken by many authorities means that they lack the retail and commercial skills necessary to understand, attract, promote and support the businesses that operate within their markets. There is also a general lack of effective marketing and promotion of markets.

  34.  The lack of information and data about markets also contributes in that it is difficult to mount a cogent case for investment or strategic development if the "value" of the markets is unknown.

  35.  Some market traders, too, have contributed to the decline. Complacency and a lack of understanding of modern retail trends and customer expectations, means that they are not always offering what the customer wants.

Are there obstacles preventing the creation of more markets?

  36.  A number of obstacles can be identified. These include markets being perceived as a low strategic priority within local authorities, a lack of public sector capital to invest in the markets, the perceived difficulties of managing a significant number of independent traders, perceptions among private sector developers that markets deliver a "low yield" and that, therefore, the return on their capital investment is best maximised elsewhere. On this last point, however, there is some evidence emerging that some developers are starting to recognise the benefits of incorporating a retail market into their developments as a footfall generator.

  37.  Crucially, there is also a lack of new young traders entering the sector. Markets are an untapped source of employment. Whilst the RMA is supporting an initiative with Make Your Mark to attract new entrepreneurs into markets, much more has to be done, and this remains one of the industry's key priorities.

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

  38.  In addition to the points raised in paragraphs 29-35, modern retailing requires extended trading—seven days a week and late night opening. This trend presents an obstacle to market traders who can be sole traders or who run a family business and cannot afford to take on additional staff to compete with these extended trading hours. Also, market trading is still largely cash-based, and the lack of credit card facilities on markets restricts customer choice.

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

  39.  There has been a clear growth in speciality markets in recent years, which provides evidence that good and relevant markets remain fundamentally popular with customers. They also bring clear benefits to the wider economy. Economic Impact Studies have been commissioned in relation to Christmas markets in Belfast and Manchester. These showed Net Additional Expenditure of £5.3 million and £22.4 million respectively in the local economy.

  40.  In relation to farmers' markets, FARMA has conducted annual consumer tracking research across UK for the past five years. In 2008 this showed 57% awareness and 30% of all homes shopping at a farmers' market at least annually.

  41.  Farmers' markets have developed from a grass-roots movement, organised differently from general markets, with no permanent market facilities and operating weekly to monthly. They take place in town centres, secondary shopping areas, car parks, alongside farm shops, village halls. They are operated by a range of organisers, eg:

    — producer-owned organisations;

    — specialist private operators;

    — local authorities; and

    — voluntary groups.

  42.  In relation to their integration with older markets, there are three models—the specialist markets are fully integrated into existing markets, the specialist markets take place in the same location as existing markets but take place on different days/times, or the market operates completely separately from the existing market.


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

  43.  Markets have existed for millennia and historically ensured the residents of towns and cities had access to affordable fresh food and other commodities. They have also acted as a key source of retail innovation, creating many of today's multi-national retailers eg TESCO (Hackney, East London), Marks & Spencer (Leeds), and Morrison's (Bradford). This innovation is still being displayed today through, for example, Farmers' and Christmas markets.

  44.  In 2008, NABMA and the World Union of Wholesale Markets (WUWM) looked at a number of economic indicators for market—the number of markets, the number of market traders, the number of people employed on markets and the economic (business) turnover of the markets per annum. This is summarised below for a number of EU States:

No. markets
No. traders
No. employed
Gross turnover
(Billion € p.a.)


  45.  Extrapolating the data for the whole of the EU produced the following:

EU Total
No markets
No traders
No employed
Gross turnover
(Billion € pa)


  46.  Collectively, the retail markets industry across the EU is comparable to a global company such as TESCO.

  47.  Retail markets remain an important part of the retail offer in towns and cities. Research commissioned by the London Development Agency (LDA) in November 2005 to inform the Mayor's Food Strategy, found that customers shopping for food at street markets spend between £3,000 and £15,000 a day in nearby shops, and local retailers, were almost universally supportive of markets.

  48.  The 2008 review of street markets by the London Assembly identified that "Street markets are important to people as sources of affordable high quality food. A shopping survey undertaken by the New Economics Foundation in 2005 found that in Lewisham a shopping basket of food cost £4.74 from the market compared to a cost of £7.18 to buy the same food from a supermarket." The NMTF Shopping Basket Survey 2008 also showed that, across a range of thirteen items, markets were on average 6% cheaper than supermarkets, and in relation to fresh produce, markets were 32% cheaper than supermarkets. They are thus in a position to respond positively to the current economic downturn and may not be as badly affected as some other retailers.

  49.  In addition, markets are able to respond to a number of other social and economic drivers:

    — Changing consumer preferences in relation to a desire for more seasonal local fresh food, and better provenance.

    — Contributing to government initiatives—food security, obesity/health promotion, sustainability and climate change, business-start-up/employment generation (particularly for new migrants), community cohesion, and regeneration.

    — Reacting to changing demographics—an increasingly elderly population will become less mobile, and markets are in a position to "take the market to the community".

  50.  In 2006, the Joseph Rowntree Foundation conducted research on Markets as social spaces. It concluded that:

    — Markets were important sites of social interaction for all groups in the community, but most significantly for older people, especially women. Markets also represent important social spaces for mothers with young children, young people, and families with children, particularly at weekends.

    — Markets had a significant social inclusion role, as places to linger, particularly for older people and young mothers. Some markets also appeared to be inclusive of disabled people, although in other places this was less evident.

    — The social life of traders played a significant role in creating a vibrant atmosphere in markets, and in forging social bonds and links in the trading community as well as with shoppers.

    — For markets to function well as social spaces, various factors are significant. Essential attributes include, a diverse range of products fitting well with local needs and tastes; cafes or food vans on site or nearby; good access to the site, especially by local transport; an active and engaged community of traders; and a sense of the unexpected.

    — Where markets are managed by local authorities, good local management and a strategic vision by the council could help with their development. It was evident from the research, however, that some markets do not have a high profile or significant resourcing from the councils.

    — There is limited national and local policy to encourage and support markets' role as a key social and economic space for the local community. Markets could play a more significant role in national policy agendas such as social inclusion, town centre regeneration and healthy eating.

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

  51.  It is possible to identify a number of key factors that contribute to a successful market. These include:

    — Critical mass.

    — A sense of place.

    — Accessibility and permeability.

    — Retail offer targeted to customer base/catchment.

    — Vibrancy, dynamism and theatre.

    — Social interaction (dwell time).

    — Effective management.

    — Integration with surrounding retail offer.

    — Effective marketing/PR.

  52.  There are many examples of good practice to be found in markets throughout the country. These have wider application, and are currently being developed as case studies. They include:

    — Borough, London—an example of the declining market transforming itself through food to become an internationally renowned destination.

    — Bradford International market—celebrating the cultural and social diversity of the area.

    — Bristol St. Nicholas Market—an example of a market introducing robust and effective environmental management systems, and National Winners of NMTF Green Awards.

    — Bury—an example of a thriving market—well promoted and marketed. Winner of BBC radio 4 market of the year award.

    — Islington Whitecross Street—an example of a London Street market being transformed through a regeneration project.

    — Longsight, Manchester Chand Raat market—celebrating the end of Ramadan and supporting the cultural and social mix of its location.

    — New Covent Garden Wholesale Market—an example of integrating wholesale and retail supply via "Local to London".

    — Northenden, Manchester—Community Food market introduced in response to "food desert"/customer demand.

    — Nuneaton—an example of a thriving market town integrating its market into town centre management.

    — Stroud Farmers' Market—a weekly market of local food and craft producers that has revived a town centre and has superb community support.


Does local government support markets effectively?

  53.  As can be seen from the details above, the picture is mixed. There are many examples of local government supporting markets, but the key issue here is the effectiveness of that support.

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

  54.  Advantages include good links to public policy, an understanding of "the public good" that markets perform, effective strategic co-ordination, the ability to link markets into regeneration projects, open and responsive management and effective regulation.

  55.  Disadvantages include a lack of strategic understanding of the benefits and role of markets eg their contribution to key policy agendas such as food and health, lack of management expertise and skills, risk aversion—no entrepreneurial spirit, profits being used to support the general fund and a lack of reinvestment in the markets.

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

  56.  No. One of the fundamental issues in relation to central government is where do markets fit?

  57. The Markets Policy Framework 2007 identified that markets contribute to the following key areas:

    — Regeneration/economy.

    — Food & health.

    — Culture & tourism.

    — Community cohesion.

    — Environment.

  58.  This, coupled with the regulatory frameworks that markets operate within, means that the following departments all have some link or potential link with markets:

    — Department for Business, Enterprise and Regulatory Reform (BERR).

    — Department for Children, Schools and Families (DCSF).

    — Department for Communities and Local Government (DCLG).

    — Department for Culture, Media and Sport (DCMS).

    — Department for Environment, Food and Rural Affairs (DEFRA).

    — Department of Health (DoH).

    — Department for Innovation, Universities and Skills (DIUS).

  59.  The result of this is that markets remain largely hidden and "off the radar" when it comes to departmental thinking.

  60.  Two changes should be considered—the identification of a single central government department that takes a strategic and co-ordinating role for markets nationally, and that all departments when considering policy or legislation "think markets", ensuring effective engagement with the sector.

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

  61.  Yes. Some aspects of the food and health agenda are now considered in a little more detail by way of example:

  62.  In July 2008, the Cabinet Office published Food Matters—Towards a strategy for the 21st Century. It states: "Street markets can be an important source of affordable, good-quality food including fresh fruit and vegetables. They can be significantly cheaper than supermarkets and so provide access to good-quality fresh food to those on low incomes." It also states: "The success of farmers' and specialist markets and large revitalised city markets provide models for greater local engagement with fresh, affordable food and highlight an opportunity to modernise or develop new food markets. Cities and towns can, through their planning and food strategies, support farmers' markets and traditional street markets by:

    — Identifying sites for markets, especially sites with good links to local transport infrastructure;

    — Promoting markets and access, and challenging restrictions that limit signage for shoppers about opening times, and

    — Looking at easing parking restrictions near markets to increase access."

  63.  Despite this, the role that markets (farmers', wholesale and retail) can make to the governments' food strategy and its obesity strategy (Healthy Weight, Healthy Lives) in terms of food access, food security, local food, effective and efficient supply chains, waste minimisation and recycling, education and health promotion appears to be significantly underestimated. The same is true of the other policy areas listed at paragraph 57.


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

  64.  The importance of markets has been highlighted in planning guidance. Planning Policy Statement 6: Planning for Town Centres provided the following encouragement to local authorities:

    "Street and covered markets (including farmers' markets) can make a valuable contribution to local choice and diversity in shopping as well as the vitality of town centres and to the rural economy. As an integral part of the vision for their town centres, local authorities should seek to retain and enhance existing markets and, where appropriate, re-introduce or create new ones. Local authorities should ensure that their markets remain attractive and competitive by investing in their improvement."

  65.  Currently a review of planning guidance is underway and the RMA has made a detailed submission urging that the content of PPS 6 should be retained and strengthened. It is vital that local authorities in particular are encouraged to invest in their markets because of the wider value that markets can bring to town centres and local communities.

  66.  Details are still awaited from DCLG as to how the revised PPS6 guidance will actually support and encourage independent retailing, including markets.

  67.  Normally a market requires planning permission, but an important exemption exists within the Town and Country Planning (General Permitted Development) Order 1995, which provides certain "permitted development" rights. Effectively the provisions grant planning permission in respect of the holding of a market (including car boot sales) for up to fourteen days in total in a calendar year.

  68.  Over the last 20 years there has been an enormous growth in the number of car boot sales. What started essentially as a fund raising initiative for local charities has become commercially driven with many car boot sales comprising hundreds, and sometimes thousands, of vehicles and attracting many thousands of potential customers.

  69.  While the permitted rights under the 1995 Order can be removed by a local planning authority there is little evidence that this has been done.

  70.  It is clear that many car boot sales are not regulated in an effective way and this results in a range of problems such as traffic noise and pollution. There is also evidence that some car boot sales are used to dispose of counterfeit and fake items and also stolen goods, and better regulation and control is required.

Do licensing regulations support or hinder the development of markets?

  71.  In addition to directly operating markets, local authorities can license markets and car-boot sales by virtue of the charter and/or statutory powers they hold to operate markets (Market Rights).

  72.  Section 37 of the Local Government (Miscellaneous Provisions) Act 1982 enables a local authority to receive advance notice of a temporary market. These provisions are adoptive and carry a fine of up to £1,000. In isolation these powers are limited and have been difficult to enforce effectively but as part of a general planning and licensing approach by local authorities they can be used in a more meaningful way.

  73.  Markets outside of London are covered by the street trading legislation contained in Section 3 and Schedule 4 of the Local Government (Miscellaneous Provisions) Act 1982 and it is clear that many markets suffer from the current inadequacies of this legislation. Many unlawful traders, purporting in some instances to act as pedlars, sell a wide range of counterfeit and fake goods often undermining sales in markets and other retail outlets. The problems caused by these traders have reached such a level that a number of local authorities including Newcastle, Leicester and Maidstone have already promoted local legislation and a number of others including Manchester and Nottingham are currently pursuing local legislation.

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

  74.  Given the importance of planning considerations to the future success of markets, planners and market operators need to work more closely together.

  75.  Markets will continue to be an important part of town centres, and planning guidance must not only encourage local authorities to invest in markets but also ensure that town centres remain the focus of community life and retail business. Markets cannot flourish in isolation and the success of a particular market is normally measured by the success of the town centre in which it operates.

  76.  It is important that all local planning authorities provide clear guidance on the holding of markets within their administrative area. There should be encouragement to provide planning guidance (Supplementary Planning Documents) giving operators of markets information on planning requirements and details of measures that the planning authority considers appropriate in terms of the arrangements for the development of markets.

  77.  Local authorities should also develop, alongside this planning guidance, relevant policies relating to the licensing of markets and car boot sales. Such policies can provide limits on the size, frequency and operating arrangements. Many local authorities already operate such policies but it is important that there is more general encouragement to adopt this measure.

  78.  The RMA would like to see the exemption contained in the Town and Country (General Permitted) Order 1995 reviewed so that markets of a particular size are outside the exemption.

  79.  The RMA has been conducting a national campaign to reform the street trading legislation, particularly asking the Government to address the position of pedlars. Currently the Government is considering its position following receipt of research undertaken by Durham University. However, whatever the outcome of the research, it is important that the licensing of all street trading is in the hands of local authorities and is not, as is currently the case, a divided responsibility between local authorities and the Police.

  80.  The RMA supports the need to set standards for the continuing development of farmers' markets through the FARMA Certification scheme, which has been instrumental in maintaining the distinctive nature of farmers' markets.

  81.  The RMA also supports FARMA in its call for the codification of the term farmers' market by the Food Standards Agency so that their distinctiveness can be enforced through Trading Standards.

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