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

Memorandum by The National Retail Planning Forum (MARKETS 24)


  The National Retail Planning Forum (NRPF), a registered charity, was created in 1995 to improve understanding between private and public sectors on planning and its impact on retailing. A membership based organisation, the Forum is specifically not a lobbying organisation. Drawing as it does on local and central government, the private sector and the academic arena, the Forum aims to act as a bridge between the different interests involved in retail planning.

NRPF Board membership currently consists of; The Co-op Group, British Council of Shopping Centres (BCSC), John Lewis Partnership, Grosvenor, National Association of British Market Authorities (Nabma), Tesco, Local Government Association (LGA) Legal & General, Prudential, Lend Lease, and Westfield.

As well as staging a series of events, seminars and workshops throughout the year, NRPF has a research group that meets on a bi-monthly basis. A number of research projects have been undertaken and published. NRPF also maintains a website that contains a substantial knowledge base on retail planning issues.

  George Nicholson the founder and current secretary of NRPF, was until recently the Chairman of the Trustees of the Borough Market in London, where he has been a Trustee for over 30 years. He has been a leading figure in the revival of the fortunes of the Borough Market as a retail food market. He also has extensive knowledge of the markets industry in the UK and abroad. He was formerly the chairman of the planning committee of the Greater London Council and before that a local councillor in Southwark.

  NRPF supports the submission made by the Retail Markets Alliance (RMA) and has the following comments to make based on the questions set out in terms of reference for the inquiry.


(a)  How has the picture changed over the last 10 years

  The UK has an historic public market tradition stretching back many centuries. Borough Market for example has existed on its current site since 1756, but has traded in and around the foot of London Bridge since Roman times. Many other markets in the UK have similar traditions, often having been established by royal charter. There are also a number of privately run markets in the UK. It had not been possible until Nabma undertook a survey of Markets in 2005, to even start any serious discussion on the scale or health of the UK markets sector. Data is still not collected on a regular and consistent basis, making analysis, policy development and growth planning difficult. This is not of course a situation confined just to markets. The whole retail sector in the UK suffers a deficit with respect to data gathering, something DCLG have started, to address, but have by no means completed.

Markets are established in a number of different formats and settings, including open air market places, street markets, indoor markets, covered markets (sheds) and within shopping centres. Each of these has developed either as a result of local tradition eg. street markets in London, or because of property market activity eg. town centre redevelopment. Markets operate on different days of the week and at different times of the day, depending on local circumstances. More recent developments, such as farmers markets, continental markets and Christmas markets operate either in existing locations; sometimes where markets have ceased to operate; or sometimes in completely new locations. It would be fair to say that there is no overall coherent picture of the public markets in the UK. A good model for such an analysis to begin is provided by the book "Public Markets", recently published by the Library of Congress in the USA in 2008 (ISBN 978-0-393-73167-5).

One of the issues which will be developed later in this statement, is the management and oversight of markets. Historically, markets had a dedicated committee and staffing. The City of London almost alone sustains such an arrangement, but latterly, most markets committees have been merged into much larger more generic committees, the markets themselves being situated in any number of different departments. Markets have also often lost any direct professional management oversight. In addition surpluses—where made—are usually absorbed in wider council finances and not re-invested in the markets concerned. The net effect of all this is that markets could have been said to have disappeared "off the radar" of the public policy agenda in recent years.

  This however needs to be balanced by the fact that there are a number of very successful retail markets throughout the UK, in every format. Indeed as a reflection of this, the BBC 4 Food programme in 2008, launched a "Market of the Year" award—the winner being Bury Market in Lancashire. Nabma itself, has for a number of years now also run an annual markets award in a number of different categories, which has also been well received both in the markets industry and wider.

  It is difficult to come to specific conclusions about the trends over the last 10 years. As the Nabma survey revealed, there remains substantial market activity throughout the UK. In some areas the market plays a very similar role to an anchor tenant eg Borough Market in Halifax in Yorkshire. In many other locations they provide an important community focus in the towns/cities in which they are located eg Leicester, Birmingham, Leeds, Darlington, Newcastle or Cardiff etc. In others a high quality food offer is provided eg Borough Market in London or Bury market in Lancashire, whilst in yet others, eg Bradford, Huddersfield and Preston an important source of "value" products for people on lower incomes provides an essential service to consumers.

  Undoubtedly however, the trading situation is getting tougher. The direct competition from Asda, Tesco and Morrison's and more recently the deep discount stores such as Aldi and Netto is bound to increase the options open to the same customer base that traditionally might have gone to a market. This makes the need for a serious discussion about the future of retail markets and the proper assessment of their needs for investment, promotion and development even more pressing.

  One feature of the markets world that is starting to emerge is the replacement of the 70s generation of shopping centres, that often contained markets, for example Liverpool and Chester. Large property development companies such as ING, Land Securities and Grosvenor are having to develop their thinking on the next generation of markets. Developers are also thinking of how to integrate new style markets into their new schemes for example at Kings Cross in London. Some of the larger town centre schemes are also being seen by developers as possible locations for new markets. This is a new departure for developers. It is significant that the new market in the Lend Lease/Grosvenor scheme in Preston is being seen as the "Third Anchor", the other two being John Lewis and M&S. This is a good indication of how markets can be utilised if the local authority, developer and retailers have a shared vision of what their town/city can become.

(b)  Are the number and types of markets in decline and if so why?

  As the Nabma survey showed, the picture is mixed. One the one hand the number of market days has stayed pretty constant with even an increase in the number of stalls available. On the other hand, vacancy rates have increased in some markets and income has also declined. Many markets however create surpluses—often quite substantial ones. Other types of markets, such as specialist markets, farmers markets, car-boot sales, continental markets and Christmas markets have shown a marked increase in recent years, pointing to an ongoing demand for market based activity and the number of traders prepared to take a pitch.

Borough Market in London has since 1998 created a completely new retail food market (in addition to the existing wholesale market), increasing the number of stalls/businesses located there from around 12 to over 160, including a range of casual stalls, permanent stands, retail outlets, cafes and restaurants.

  There are undoubtedly matters to do with lack of investment and the proper management of markets that will over time affect the attractiveness of existing markets, something that will inevitably lead to further decline unless tackled. The same issue will severely limit the possibilities for creating new markets.

(c)  Are there obstacles preventing the creation of more markets?

  This is a very general question, to which it is difficult to give a definitive answer. Again it depends on the type of market. However it can be encapsulated in just two words—funding and management. Obviously the creation of a new indoor market is vastly more expensive than the creation of a new open air market. There are very little start up costs for either market or trader in a starting a farmers market or car boot sale. On the other hand, Islington Council in London have recently invested over £1 million on regenerating an existing street market (Whitecross Street) that was in severe decline. Since the investment, there has been a marked increase in the number and type of traders and customers. Cities such as Liverpool, Chester and Preston have indoor markets in ageing shopping centres that are in need of and are in the process of being redeveloped. These are very costly exercises running into several million pounds. However, the success of these schemes depends on the state of the retail development industry—currently at a low ebb. The current property market conditions will leave a number of markets in limbo, potentially threatening their long term survival. Other markets struggle on in buildings—mostly Arndale type centres—that had inappropriate spaces created for them, usually as a replacement of an historic market structure. There are a number of historic markets, in need of substantial investment as well. Borough Market in London for example spent nearly £10 million on developing its new retail market, the cost being for a mixture of the refurbishment of existing structures and new market buildings. Funding was raised from a combined mixture of property sales, government funding—initially through SRB and latterly through the RDA—and the markets own resources.

There is a problem with the integration of new farmers markets within existing markets. Often this is because of resistance from existing traders, such as in Leeds market or more often from the operators of farmers markets who want to retain a distinct identity. This is not a black and white issue, but with many markets in need of an injection of new traders and products, it probably makes sense to try and integrate new markets within existing structures where they exist.

  As mentioned earlier, the lack of active management of existing markets in a number of local authorities, makes it most unlikely that they would be seeking to create new markets. Recently in London, the London Development Agency (LDA) has funded a number of posts for people to be located in the existing wholesale markets to promote increased trade and also improve links between producers and the markets concerned. Leicester Market is considering making a specific appointment to promote the existing retail market to the same end. These are isolated examples. They do however demonstrate a growing awareness of the potential of markets as vehicles for increased business.

  It is this potential that has yet to be more widely appreciated in both local government and central government circles. Blackpool has recently started to promote itself as a centre for traditional foods, even launching a new sausage. There are a number of food trails in places such as Lancashire which are starting to develop the potential for food tourism. Markets are well placed to exploit this potential. Stockport market itself currently undergoing refurbishment, has the town's tourism office located adjacent to the market and uses the market on all the towns' promotional material. Bury calls itself "The World Famous Market". It is also a very good and rare example of a market and a shopping centre working together to mutual benefit. Often it is very difficult to locate a market within a shopping centre either because of the physical design of the centre or because of a lack of co-operation between the two, as a visit to Swansea, Manchester or Nottingham will reveal.

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

  Overall, there is no coherent policy framework either at local, regional, or central government level setting out the place or importance of markets, either as part of the retail hierarchy or as potential vehicles for tackling current concerns with healthy eating and growing levels of obesity. There is a brief mention in PPS6 on the planning for markets, but there is no identifiable funding stream at central, regional or local level to support the development of existing markets or to increase them in number. Part of the problem is a "lack of visibility" for markets in the policy and political fraternity. Few people in the regeneration or development worlds have any direct experience of markets. Even in the food world, there is often a focus on producers or end users, food preparation and cooking. But the key place that markets play in the supply chain is often completely overlooked.

There is as has already been stressed, often no-one with a direct responsibility for the management or the future direction of a market within a local authority. This is particularly marked in London, where there are a huge number of street markets. All too often, the only function a local authority plays is one of issuing a licence to an individual trader from a distant town hall. The undertaking of cleansing, food standards and consumer protection is carried out in an ad hoc manner by different departments, with little regard to the overall functioning of an individual market or a series of markets in a borough. The overall upkeep of the market, maintaining standards, trader relations, the provision of electrical, water and storage facilities is often missing as is any promotion of the markets.

  There has in recent years also been a trend—encouraged by central government—to view markets as simply part of the wider property portfolio of an authority. Markets are of course of their very nature a place where space is rented out in different ways. But in viewing a market and the spaces within it as simply a part of a property portfolio or in the context of the rental structure of the town within which they are located, runs the risk of misunderstanding the nature of a market or pricing out existing traders. In an extreme example a local authority will view the shops surrounding a market not as part of the market but simply as part of a wider portfolio. This completely ignores the interplay that goes on between a market and the shops it contains and also the potential for business growth within a market. In an extreme example local authorities have been known to strip markets of their shops—and hence removing an important source of income thus undermining the viability of the market itself. Sometimes, when a market is redeveloped, the same thing occurs.

  The example of Borough Market in London is again illustrative of a different approach. Here the creation of what is known as a "Composite Market" has been developed, where there is a mixture of casual and permanent stalls stands and kiosks, retail outlets, cafes and restaurants, all feeding off each other. This is a more robust and flexible model than found elsewhere.

  There are also issues regarding the trader/authority organisation in a market. The example of the Boqueria market in Barcelona is worth exploring for wider application. All traders as part of their licence are required to join the trader organisation. The traders in turn employ staff to promote the market and liaise with the city authority, who in turn employ specific staff to look after the interests of the market. All 40 markets in Barcelona are legally bound together in an independent legal vehicle that receives the rents and uses any surpluses to re-invest in the markets. Currently there is also a huge programme of refurbishment going on in Barcelona funded by the City authority.

  In most markets in the UK, any surpluses are redistributed to the general local authority account and are not re-invested in the way they are in Barcelona. If markets are to be sustained and develop in the UK it is crucial that adequate investment is made and income generated is retained.

  There is also an issue of the perception of markets amongst the retailer, property development and investment worlds. Generally, markets are not understood, are not seen in a very good light, nor as attractive neighbours. Markets that have been included in property schemes have often been poorly designed and located. On the other hand, some food retailers such as Morrison's are starting to include a "market" concept in their internal layouts. There needs to be a proper dialogue with the retail industry about the present and future role of retail markets to increase understanding in the retail world of local authority wishes and also in the local authority world of the demands of modern retailing.

(e)  What has been the impact of specialist markets eg continental and farmers markets

  The impact has generally been positive. This is both because it has generated new business and also raised the profile of markets in the UK. It has also brought many new and younger entrants into an industry that has a traditionally ageing population.


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

  This is a very important area to study and promote. Markets are above all a social space with an economic function, and one historically kept in common ownership for the public good. This explains the special status given to markets and the fact that markets like Borough Market are deemed to be charitable organisations. This is not because the market function itself is charitable. It is because historically it has been deemed important for local authorities to retain a place in public ownership—often in perpetuity—for the purposes of holding a market.

The issue of the social nature of markets has recently been the subject of a study by the Joseph Rowntree Foundation. One has only to compare the atmosphere in a traditional retail market to a supermarket or department store to see how differently a market operates in terms of human interaction and customer experience. Traditional markets play a crucial role in a number of towns and cities, particularly for the poorer sections of the community—including students. Markets are also low entry cost vehicles for business growth and the encouragement of start-ups and the potential for developing local enterprises. At Borough Market there is an annual community bar-b-que, and a series of events and festivals throughout the year. There is also a proposal being developed for a food school to link up local schools with traders, food specialists and the chefs who use the market.

Approaching 5 million people a year pass through the Market. The market has had a dramatic impact in terms of its wider regeneration effects locally in Southwark, and also in the image of the area to the outside world.

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

  The qualities required are:

    1. A clear focus by a local authority on the running and management of a successful market. You have to want to run a market.

    2. The integration of the market into the surrounding area where it is located, whether the surrounding retail offer or the host community. You have to manage the place in which the market is located, and study and understand the links it has and needs to maintain. Permeability is a key feature.

    3. An understanding within the authority of the potential of the market in helping to deliver cross cutting programmes within the council. You have to understand how a market works.

    4. The development of links with organisations locally who might benefit from contact with the market ie schools and hospitals etc and also those outside the area linked to the market supply chain. You have to adopt an entrepreneurial outward looking approach to your market.

    5. An ongoing programme of customer research, feedback and improvements to the market. You must always be seeking to find ways of improving your market, both for those who trade in it and those who visit it.

    6. Strong trader organisation and proper liaison with the market authority. Markets work best when both are working together to a common set of objectives.

    7. Transparency in the running and financing of the market is vital. This encourages ownership and involvement by stakeholders.

    8. A clear understanding of where and how the market operates in the supply chain. It is essential to see the market in its wider economic context.

    9. Participation in local regional and national networks: It is vital to stay abreast of developments in the markets world and also in the regeneration and education fields amongst others.

    10. Celebrate your achievements. Let people know how you are making progress and share that with the local community.

  A number of examples of best practice have been supplied by (RMA) in their evidence to which we would concur. I would add the Boqueria market in Barcelona.


(a)  Does local government support markets effectively?

  The picture is mixed for the reasons set out above. Generally there is a need for la's to give greater recognition and prominence to their markets in terms of how they are perceived and managed. Greater understanding is also needed of their role in the local shopping hierarchy. A markets role within a wider economic context both from a potential employment perspective and also as vehicles for business growth also needs to be better understood by la's. Currently, there is a "markets champion" (Stockport) designated within the LGA, but how this is translated into action either in terms of policy development in the LGA or in action on the ground is not at all clear.

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

The advantage is that markets occupying as they often do a central role (physically and also socially) in the communities in which they are located, are a natural vehicle for the outward expression of the la's commitment to providing both an important service and the need to communicate with its residents. It is a potentially vivid expression of a "public good". Markets are potentially a good vehicle for an authority to experiment with new ideas and also to promote competition to other retailers thus ensuring an evolving and dynamic offer to residents. The disadvantage are again set out above in that some la's do not have the commitment, powers, policies or resources to manage their markets properly. All of these things could be remedied. The alternative of private operators meets some of these problems but also potentially fundamentally changes the relationships set out above. Any move in that direction should be carefully contemplated and should not be driven solely by financial constraints or perceived lack of management ability internally.

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

It is difficult to find an example of central government support for markets, apart from the brief mention in PPS6 with respect to DCLG planning policy. There is thus a policy vacuum in Whitehall that needs addressing. Crucially, with respect to food markets, Defra needs to be asked to address the different potential roles of markets both for their role in respect of the food supply chain but also as potential vehicles for promoting and selling British produce as part of any food security plans that might emerge from Government. Other Government departments such as BERR, DCSF, DoH need also to be asked to review their policy frameworks to include a section on the role and potential of retail markets.

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

Yes, for the reasons set out above.


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

  Both. There is support at national level in PPS6. However, when it comes to application at the local level, there is little evidence of a clear analysis of the role of markets and the need for supportive policies. Markets are dynamic entities that require careful management, flexibility in the interpretation of planning regulations, and speed of decision making. It is also crucial to clearly set the market in the context of the surrounding retail offer whether in town centre or street. It is important that la's as part of the development of their "Core Strategies" include a section on the potential of their markets.

(b)  Do licensing regulations support or hinder the development of markets?

See the (RMA) evidence. As mentioned above, it is not necessarily one of a problem with licensing as such, but in London in particular, la's only see themselves as having a licensing role, rather than a wider remit. In fact what are called markets, are in fact no more than a series of individual numbered pitches marked out on a street. There is no collective entity that can be described or defined as a "market" in law. This obviously has severe implications for the proper management and development of a market. There are other restrictions currently in place in London that severely restrict the charges that can be made, affecting the financial management of the markets concerned and hence their viability.

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

There needs to be a complete review of both the planning and licensing regimes as they apply to markets at national, regional and local level. The guiding influence behind this review, should be to allow markets to (a) be managed effectively, (b) be able to attract funding, (c) be able to compete properly in the wider retail world, (d) be able to operate in a financially viable manner, (e) be able to develop and grow, (f) be able to play a part in the developing sustainability agenda, in respect of food policy, urban and rural development, and climate change.

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