After unstoppable growth in the last few years, seeing its share of the grocery market rise to 4.8%, Aldi is one of the major threats to locally owned convenience stores, but in Hawick the German discounter has been refused planning permission – so are we seeing the beginning of the end of its meteoric rise?
by Kevin Scott
One of the big trends in the grocery sector in 2015 was the continuing growth of Aldi and Lidl. Over the Christmas period, when consumers might be expected to stick to the big stores, Lidl was the fastest growing retailer with sales up by 18.5%. Aldi followed with an increase in sales of 13.3%. The combined share of these two firms now takes almost 10p in every £1 spent in grocery retailers. It’s a remarkable achievement and one that has only been possible thanks to huge investment in new stores.
And there’s no slowing down. The company’s website states that it is currently looking to open new stores in 26 areas of Scotland, from Dingwall to Jedburgh, Castle Douglas to Arbroath.
Not only have consumers found the companies’ ranges and prices well-suited to their requirements, but the discounters’ growth has coincided with a major shift in site availability. Gone are the days of supermarkets opening 100,000 sq ft stores every other week and as the likes of Tesco and Sainsbury’s advance into the convenience space, the discounters have been able to completely own the 10,000-25,000 sq ft space.
Not only does this store size perfectly fit the discounter offering, but coincidentally, this happens to be the size of sites that are becoming available in towns and cities.
As Edinburgh retailers Dennis and Linda Williams have discovered, the sheer force of Aldi’s growth is seemingly unstoppable. Despite applying for planning permission on a brownfield site and with thousands of locals opposed, Aldi was granted permission to build on Dennis and Linda’s doorstep.
In Hawick, a similar story has been playing out over the last year, but with one significant difference – this time Aldi hasn’t got its way and planning permission has been refused.
This is welcome news for Spar retailer George McCusker, who has mounted a vigorous campaign with his wife Kathryn. “We’re in a good place now,” says George, relieved to have emerged unscathed from the battle – and amazed that the store wasn’t given the go ahead. “I don’t think the story is quite over yet, though. The councillors want to keep going so we need to see how the appeal goes.”
SLR contacted Aldi to address the company’s plans for the site, however a spokesman for the company said that as the development was being led through the planning process by the developer GLS the company had no comment to make.
George and Kathryn have been supported throughout by the SGF, who provided a template letter for George to send to all local businesses to get them to contact the Scottish Borders Council. The Federation also engaged directly with the planning department to remind them that their own retail impact shows there is no spare grocery retail provision in Hawick.
George says: “The councillors aren’t looking at the bigger picture; they just want another big retailer in the town. We’ve already got Sainsbury’s, Morrisons, Lidl, Iceland, Farmfoods, a big B&M and three or four symbol stores.”
John Lee, Public Affairs and Policy Manager at SGF says the Federation is delighted for George and Kathryn. “They have mounted an impressive campaign in mobilising local businesses and they have never given up. We are very encouraged that planning officials have stuck to the findings of their own retail impact assessment – SGF pushed hard for this and fortunately it has paid off.”
A lengthy saga
The plans have turned into something of a saga since Aldi announced its intention to open a store in the Borders town back in December 2014. Having achieved overwhelming public support at a public exhibition in December that year, Aldi was confident the store, which would be built on the site of the former Wilton Mills on the outskirts of the town centre, would go smoothly.
However, site access problems meant the developer had to apply to demolish two listed buildings, including the former mill’s iconic clock tower – a plan that was immediately opposed by Historic Scotland.
By July 2015, the developer had illustrated that restoration works would cost an estimated £2m, with the market value of the property £400,000. Although the Council approved the demolition in September, the development was dealt a further blow in November when the Scottish Government Reporter refused a request to change the site status to town centre, which would have brought the site into line with the town centre first principle and the sequential test, thereby making it easier to obtain permission to build.
In December 2015 the old clock tower was demolished while two days before Christmas Scottish Borders Council rejected planning permission. Which brings us up to date. The developer, GLS, could still appeal that decision, which would be heard by the Council’s Local Review Committee.
Unlike the situation Dennis and Linda faced in Oxgangs, local councillors have backed the development, with Councillor Watson McAteer going as far as to suggest the decision was a disaster for the town.
Speaking to SLR he said, “There is a space in Hawick and we are hoping that it can be developed and that that space can be filled with something that will bring people into Hawick. It’s about consumer choice. It is a primary issue for me – we have regeneration or the prospect of an empty space for the next 10 years.”
All this highlights the extent to which Aldi and GLS is determined to move into the town. With a Sainsbury’s and a Lidl already situated nearby, George is worried about the impact of a third store near him. Councillor McAteer says: “I appreciate George’s situation, but I can’t support him on this one. What I do know is that he has a good business, it’s well established and I hope he wouldn’t be impacted by the opening of a new store.”
However, George reveals that a number of town centre businesses signed a petition against the store opening. He adds: “Not one Councillor is behind a till making a living. They need to see how many shops are going out of business. I’ve been doing business in this town for 45 years, I’ve got family here, I’ve buried family here. And the Councillors think my concerns are purely business related. Well they’re not, I care about this place and I don’t like seeing what’s happening to it.”
Councillor McAteer adds that he had not given up on the store opening. “I’m hopeful if the developer appeals that permission would be granted, but I wouldn’t say I’m confident. Councillors tend to follow recommendations, however the local reporter in its refusal made a statement saying the space could potentially be used for retail.”
For now, George and Kathryn are back to running their Spar store and post office without the distraction of a politically-charged campaign. For retailers in the 26 areas of Scotland where Aldi is currently seeking to open new stores, there is now demonstrable evidence that campaigning does work, and that local shops can be protected. As Kathryn says: “There’s a war between multis and discounters and it will intensify. Aldi are looking to buy up property across Scotland and we’re the ones caught on the middle. Shops will be wiped out and if Aldi and Lidl think they’re not making enough they’ll close. What happens then? A lot of towns like Hawick will struggle.”
