Planning applications for new supermarkets fail to complete

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Less than a third of planning applications for new supermarkets result in a completed project, according to new research…

Data collected by construction intelligence firm Barbour ABI revealed that of the 556 planning applications submitted by Tesco, Sainsbury’s, Asda, and Morrisons since January 2010 only 179 successfully completed or are currently under construction.

Tesco put forward 206 planning applications during this period, placing the supermarket at the top of the chart. However, it also saw the lowest planning to construction ratio at just 21 per cent. Comparatively, Morrisons had a ratio of 56 per cent.

Over the last few years the ‘big four’ stores have come under increasing pressure from discount supermarkets such as Aldi and Lidl, both of which have enjoyed growing popularity. It is clear to see how much the two expect to develop over the next year, as it is estimated Aldi will spend £109m in 2015 on construction alone. The German-owned firm hopes to have 1,000 UK stores by 2022.

Lead Economist at Barbour ABI Michael Dall said: “With the ‘big four’ already having a fairly solid foundation of stores across the UK, some may suggest that there isn’t a glaring need for them to build new stores at a significant rate.

“However, it is interesting to note that a planning approval does not necessarily indicate future development.

“Perhaps many of the supermarkets were competing for ‘development options’ rather than actually building new stores.

“Defending market share was a key strategy of the ‘big four’ as the data suggests.

“However given the changing nature of the supermarket sector in the UK and the concentration on price competition from the ‘big four’ this may allow others to challenge their traditional dominance by increasing construction rates.”

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