Hardware Association takes superstore battle to top court

The Irish Hardware Association is set to mount a Supreme Court challenge to planning permission for a 150,000 sq ft DIY superstore at the Liffey Valley retail park in west Dublin.

The move follows the granting of outline permission for a 100,000 sq ft warehouse unit, a 30,000 sq ft ancillary garden centre and a 20,000 sq ft builder's yard on the site. British DIY retailer B & Q has apparently agreed terms to occupy the facility.

The Irish Hardware Association is taking its case to the Supreme Court after it failed to get a High Court order to quash the planning permission in July. It claims the permission given was materially different to the original planning application submitted to South Dublin County Council for five smaller retail units.

A spokesman for the association said the legal challenge was not about competition but about "sustainable development in a country with the population and size of Ireland". He referred to section 77 of the Retail Planning Guidelines issued by the Department of the Environment and Local Government which state that the development of very large single retail warehouse units attracting large volumes of car-borne customers from a relatively widely drawn catchment area can have an unacceptable impact on smaller shops in town centres. "Furthermore, these large-scale development formats require a high quality road network with spare capacity. These conditions do not exist in Ireland.

"It's about the survival and growth of towns and villages in Ireland," said the Hardware Association spokesman. "Not everybody wants to travel 40 miles to get to a store. Those in a lower socio-economic grouping or people with an inability to travel distances want to shop locally. If you are opening a huge unit three times the size of anything seen before in Ireland, the smaller units will be closing down, which is not good for the community.

"To constantly raise the matter of competition is to miss the point completely. We are not anti-competition or anti-development, the court action has to do with planning. Our members welcome competition within the limits of sustainable development. No one should be reluctant to compete with us on a level playing pitch."

The Retail Planning Guidelines recommend a cap on the size of retail warehouses of 64,583 sq ft.

A report on the impact of the guidelines on the retail sector, commissioned by the Department of the Environment and the Department of Enterprise, Trade and Employment, is being prepared by Goodbody economic consultants and is due to be published soon.

The report will consider whether the guidelines are anti-competition.

A spokeswoman for B & Q, Lorian Coutts, said the company was "confident" it would receive full planning permission. In her submission to the Goodbody report she said any size restrictions imposed on retail units would be "a restriction for the customer".

"We are keen on opening a store with a good range and experienced staff and we think customers want that."

Several reports have come out against the Retail Planning Guidelines. Last week, a Tesco-commissioned report, Competitiveness of Retailing in Ireland in an International Context, found that the Government cap on the size of stores was against consumer interests and was impeding competition and growth.

This year, a London-based retail consultancy, Verdict, found that while retail sales in Ireland were outperforming those in Britain and the rest of Europe, they would be even higher without Government restrictions on superstore sizes. B & Q said it had exchanged contracts with the developers of the Liffey Valley site, Barkhill Ltd, a joint venture company owned by O'Callaghan Properties and Grosvenor Estates, a company owned by the Duke of Westminster.

If full planning permission is granted, B & Q envisages an opening date of early 2002. It will be paying rent in the region of £20 per sq ft.

B & Q - part of Kingfisher plc, which includes Woolworths, Superdrug, Comet and French electrical retailer Darty - has 300 stores in the UK, some of which are the smaller 40,000 sq ft supercentres. They have six stores in Northern Ireland, the first of which was built in 1989.

The proposed Dublin store would be one of its larger warehouse units and would have 250 staff. B & Q has been looking for a site in Dublin for some years. Its attempt to set up in Airside Retail Park in Swords, Co Dublin, was stymied by An Bord Pleanala, which agreed with objector Woodies that a superstore would have an adverse impact on existing retail shopping outlets trading in the catchment area and that a store of such scale would be premature, given that works on a section of the M1 between the airport and a point north of Swords had not been completed.

Ms Coutts believes B & Q will not be the "category killer" that many expect. "I've been to see Woodies and Atlantic myself. A lot of their products are quite different from ours. They do house ware like crockery and furniture and household items like candles, which we don't."

B & Q has over 40 stores worldwide, many of which are joint venture operations. It has merged with Castroma in France and opened joint venture stores in Taiwan, China, Turkey and Poland.

However, it faces stiff competition from the world's leading DIY retailer, US-based Home Depot, which has more than 1,000 stores in the US, Canada, Chile and Puerto Rico and is set to take the British market by storm.

"With stores of over 130,000 sq ft, they are rather a huge threat, but that will only galvanise us and make us stronger. Rather than `oh my God', we see competition as positive," says Ms Coutts.

If the Dublin branch gets the green light, it plans to open more stores. Opening one store in a particular market is not sustainable in the long term so it makes sense to open more, Ms Coutts said.