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ATTACHMENT 3 RETAIL SUSTAINABILITY ASSESSMENT

Proposed ALDI Supermarket, Midvale Retail Sustainability Assessment

Prepared for:

ALDI Stores Ltd

July 2015

Midvale Retail Sustainability Assessment – July 2015 deep end services pty ltd i

Principal Chris Abery [email protected] 03 8825 5877 Senior Associate Alexandra Hopley Project Code DA1520 Date 2 July 2015

Disclaimer This report has been prepared by Deep End Services Pty Ltd solely for use by the party to whom it is addressed. Accordingly, any changes to this report will only be notified to that party. Deep End Services Pty Ltd, its employees and agents accept no responsibility or liability for any loss or damage which may arise from the use or reliance on this report or any information contained therein by any other party and gives no guarantees or warranties as to the accuracy or completeness of the information contained in this report. This report contains forecasts of future events. These forecasts are based upon numerous sources of information, including historical and forecast data provided by organisations such as ALDI Stores Ltd, Australian Bureau of Statistics, Deloitte Access Economics, MapInfo Australia and Market Data Systems. It is not always possible to verify that this information is accurate or complete. It should be noted that the factors influencing the findings in this report may change and hence Deep End Services Pty Ltd cannot accept responsibility for reliance upon such findings beyond a date that is six months from the date of this report. Beyond that date, a review of the findings contained in this report may be necessary. This report should be read in its entirety, as reference to part only may be misleading.

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Midvale Retail Sustainability Assessment – July 2015 deep end services pty ltd ii

Table of Contents

1. Introduction ................................................................................................................. 1 1.1 Background ........................................................................................................... 1 1.2 LPS amendment .................................................................................................... 2 1.3 Report structure ................................................................................................... 3

2. Proposed development ................................................................................................ 5 2.1 ALDI profile ........................................................................................................... 5 2.2 Site description ..................................................................................................... 7 2.3 Proposed development ....................................................................................... 10

3. Existing policy and centres .......................................................................................... 12 3.1 Metropolitan Policy ............................................................................................ 12 3.2 City of Swan Local Planning Strategy .................................................................. 13 3.3 City of Swan Commercial Centres Strategy ......................................................... 13 3.4 Shire of Mundaring centres ................................................................................ 14 3.5 Distribution of Centres ........................................................................................ 14 3.7 Centre descriptions ............................................................................................. 17 3.7.1 Midland Strategic Metropolitan Centre .............................................................. 17 3.7.1.1 Midland Gate Shopping Centre ........................................................................... 17 3.7.1.2 Centrepoint Midland ........................................................................................... 18 3.7.1.3 Other Midland .................................................................................................... 18 3.7.2 Darling Ridge ....................................................................................................... 19 3.7.3 Swan View........................................................................................................... 19 3.7.4 Stratton Park ....................................................................................................... 20 3.7.5 Local centres ....................................................................................................... 20 3.7.6 Centres outside the catchment ........................................................................... 21

4. Need and demand ...................................................................................................... 22 4.1 New supermarket entrant .................................................................................. 22 4.2 Regional supermarket supply and demand......................................................... 22 4.3 Local and neighbourhood centre floorspace demand ........................................ 25

5. Trade area analysis ..................................................................................................... 28 5.1 Regional population growth ............................................................................... 28 5.2 Trade area definition .......................................................................................... 29 5.3 Trade area population ........................................................................................ 30 5.4 Population characteristics ................................................................................... 31 5.5 Retail spending ................................................................................................... 34

6. Retail impact assessment ........................................................................................... 36 6.1 Projected sales .................................................................................................... 36 6.2 Trading impacts .................................................................................................. 37 6.3 Impact conclusions ............................................................................................. 40 6.4 Benefits of ALDI development ............................................................................ 41 6.4.1 Employment benefits .......................................................................................... 41 6.4.2 Other benefits ..................................................................................................... 41

7. Conclusions ................................................................................................................ 43

Midvale Retail Sustainability Assessment – July 2015 deep end services pty ltd iii

Tables

Table 1: Extract from State Planning Policy 4.2 (Table 3) ...................................................... 12 Table 2: City of Swan Commercial Centres Strategy - classification of Centres ..................... 13 Table 3: Retail centres floorspace summary by category ...................................................... 16 Table 4: Local & neighbourhood centre floorspace demand & supply analysis ..................... 27 Table 5: SA2 population forecasts ......................................................................................... 28 Table 6: Trade area population.............................................................................................. 31 Table 7: Trade area characteristics ........................................................................................ 33 Table 8: Trade area spending estimates ................................................................................ 35 Table 9: ALDI Midvale site market shares – 2019 .................................................................. 36 Table 10: ALDI Midvale site trading impacts ............................................................................ 38

Figures

Figure 1: Site location ............................................................................................................... 1 Figure 2: City of Swan Local planning Scheme No. 17 – Special Use zone 12

(amended to 21) ........................................................................................................ 2 Figure 3: Former and existing site conditions ........................................................................... 3 Figure 4: Local context .............................................................................................................. 8 Figure 5: Transperth bus routes ................................................................................................ 9 Figure 6: Site plan ................................................................................................................... 11 Figure 7: Retail centres and supermarkets ............................................................................. 15 Figure 8: Retail centres floorspace mix ................................................................................... 16 Figure 9: Supermarket floorpace provision around SMCs 2015-2019 (sqm per

1,000 people) ........................................................................................................... 23 Figure 10: Perth SMC supermarket provision ........................................................................... 24 Figure 11: Local & neighbourhood centre demand area & Urban Housing Strategy

(2014) ....................................................................................................................... 27 Figure 12: Region population by Statistical Area (SA2) ............................................................. 28 Figure 13: ALDI Midvale trade area & supermarkets ................................................................ 30 Figure 14: Per capita spending rate comparisons ..................................................................... 34 Figure 15: Retail sales change, 2015-2021 ................................................................................ 39

Midvale Retail Sustainability Assessment – July 2015 deep end services pty ltd 1

1. Introduction

1.1 Background

In 2012, ALDI Stores announced its intention to extend its network of discount food stores from the eastern states to Western Australia and South Australia. A new warehouse and distribution facility at Jandakot in Perth’s southern suburbs is under construction and will ultimately service a network of up to 100 stores to be developed across the state.

ALDI’s move to Western Australia, after successfully establishing over 370 stores in the eastern states since 2001, is a significant change to the state’s retail landscape. It will bring greater competition, choice for consumers and cheaper food and grocery prices.

ALDI has been actively securing development and leasehold sites with a view to opening its first stores in early-mid 2016. ALDI’s typical store size of 1,550 sqm with 80-100 car spaces requires a land area of approximately 6,000-7,000 sqm. The company has already announced new store locations at Cannington, Southern River, Halls Head, Kwinana, Rockingham, Australind, South Lake, Joondalup, Camillo, Midland, Mundaring and Ellenbrook.

Midvale is an outer suburb of Perth, west of Midland, which straddles the City of Swan and the Shire of Mundaring. ALDI has entered into a contract to purchase land on the north-east corner of Morrison Road and Gray Road for the purpose of developing a freestanding supermarket (refer Figure 1) with the potential for other non-retail uses.

Figure 1: Site location


1.2 LPS amendment

The 1.65 hectare site, known as portion Lot 338 (No. 167) Morrison Road Midvale (subject site), is currently zoned Special Use 21 (as amended) under the City of Swan Local Planning Scheme (LPS) No. 17 (refer Figure 2).

Figure 2: City of Swan Local planning Scheme No. 17 – Special Use zone 12 (amended to 21)

Source: City of Swan Local Planning Scheme No. 17

The subject site was formerly used as a cinema complex with car parking and a separate stand-alone ‘Fast Food Outlet’. Under the former uses, the land was zoned ‘General Commercial Zone and Restricted Use’ limiting development to ‘Amusement Parlour’, ‘Cinema / Theatre’, ‘Fast Food Outlet’, ‘Restaurant’ and ‘Recreation Private’.

After the cinema complex was closed and demolished in 2009 the zone was amended in March 2010 by Scheme Amendment No. 15 to ‘Special Use No. 12’ (later renumbered Special Use 21) inserting ‘Retirement Village’, ‘Fast Food Outlet’, Consulting Rooms’ and ‘Local Shop’ (with a maximum Gross Lettable Area of 100m2) as the only permitted uses on the site.

The proposed LPS amendment by ALDI seeks to amend the site specific conditions under Special Use Zone 21 including increasing the permitted area for a ‘Shop’ to 1,950 m2 GLA.


Figure 3: Former and existing site conditions

Source: Nearmap, Deep End Services

State Planning Policy 4.2 Activity Centres for Perth and Peel sets out the legislative requirement for the preparation of Retail Sustainability Assessments (RSAs). An RSA is generally required for major development and scheme amendments or structure plans that provide for major development. An RSA is deemed to be required in this case as the proposal involves an amendment to the LPS to facilitate a small supermarket which is outside the generally established centres hierarchy for the City of Swan.

The Policy states that:

“A Retail Sustainability Assessment (RSA) assesses the potential economic and related effects of a significant retail expansion on the network of activity centres in a locality. It addresses such effects from a local community access or benefit perspective, and is limited to considering potential loss of services, and any associated detriment caused by a proposed development. Competition between businesses of itself is not considered a relevant planning consideration”.

Deep End Services has been instructed by Rowe Group on behalf of ALDI to prepare the RSA in accordance with the needs of the Policy.

1.3 Report structure

The objective of this report is to assess the need and demand for the proposed ALDI store and assess the likely trading impacts on other centres in the area. Future employment and other benefits are also considered.

In preparing this report, the subject site and other retail centres in the area were inspected in June 2015.

The report contains the following sections:

• Section 2 discusses the site and proposed development.


• Section 3 reviews existing centres policy and the size and composition of existing centres in, or near, the catchment.

• Section 4 examines need and demand issues including supermarket and local / neighbourhood floorspace supply in the region.

• Section 5 defines the trade area for the site with population and retail spending forecasts and demographic characteristics.

• Section 6 presents the retail impact assessment including projected sales for the proposed development, estimated trading effects and implications on surrounding centres. The employment, consumer and other community benefits are also presented.

• Section 7 presents the overall conclusions.

All references to spending and sales / turnover levels in this report are at constant 2015 prices and include GST.


2. Proposed development

This section outlines ALDI’s profile and business model and the proposed development at Midvale.

2.1 ALDI profile

ALDI is an international retail chain with over 8,000 stores across 15 European countries, the United States and Australia. Since the first Australian store opened in January 2001, ALDI’s network has grown to 374 stores in Victoria, New South Wales, ACT and Queensland. In 2012, ALDI announced its expansion into South Australia and Western Australia commencing in 2016.

ALDI offers staple food and grocery lines through quality private label brands, a limited range of national branded products and weekly special buys and promotions on a wide range of non-food, clothing and household items. Ready meals and fresh produce are a rapidly growing part of the business. The weekly special buys coupled with low price grocery lines are strong drivers of traffic which can effectively expand the catchment beyond an area that would otherwise be expected for a relatively small food and grocery store.

The business model aims to reduce operating costs through the supply chain, store development and layouts, merchandising, store operations and marketing with savings passed to the consumer through lower prices. ALDI is the only ‘hard discount’ food and grocery chain in Australia.

In June 2015, the national consumer group, ‘Choice’, published the results of a price comparison of 31 grocery items sold by Coles, Woolworths and ALDI across 93 supermarkets in Australia. The sample of supermarkets was spread across 17 cities and clustered to ensure there was local competition between stores. The results showed that ALDI’s basket of groceries was:

• 23% cheaper than Coles and 26% cheaper than Woolworths on comparable home brand or private label products; and

• 46% cheaper than Coles and 50% cheaper than Woolworths on comparable national or leading brand products.

The ALDI model can be readily distinguished from traditional supermarkets on offer in Australia. For example, each ALDI store has a product range of approximately 1,500 separate stock keeping units (SKUs) compared with the 20,000-30,000 SKUs on offer at national full-line supermarket chains such as Woolworths or Coles. The size of an ALDI store is much smaller at approximately 1,500-2,000 sqm compared to 3,500-4,000 sqm (gross retail floor area) for a new full-line store operated by Coles or Woolworths.

This unique customer proposition and differentiated format enables ALDI to successfully operate in close proximity to the major chains. In Australia, ALDI has direct competition from Coles and/or Woolworths in approximately 80% of its locations.

Internal images of a typical new store are shown on the following page.


2.2 Site description

The 1.65 hectare site is situated on the north side of Morrison Rd, bounded to the west by Gray Drive and to the east by Swan Ave (refer Figure 4). Morrison Road functions as an important east-west distributor road linking Midland, Midvale and Swan View. For most of its length, Morrison Road is a 4-lane divided road with a wide central median. It crosses Roe Highway 150 metres east of the site and extends west to Great Northern Highway with local street connections through to the Midland Metropolitan Strategic Centre (MSC). The latest published traffic data by Main Roads indicated 17,150 vehicles per day in 2008-9 passed the site with steady growth on previous years.

The Swan Regional Recreation Park lies to the north which is accessed via Gray Drive, past the site. The clustered leisure and recreation facilities which generate significant weekday and weekend usage include:

• Swan Park Sports and Leisure Centre including an indoor pool and indoor hard court facilities;

• Ron Jose oval;

• Regional netball courts;

• Swan Park Theatre which is home to Calisthenics WA; and

• Speed Dome and Criterium and Bicycle Education Centre.

The Moorditj Indigenous Secondary College can also be accessed via Gray Drive while the Polytechnic West Midland campus is west of the recreation area.

The site is largely vacant comprising a bitumen car park from the former cinema complex, now overgrown with trees and weeds. The former Chicken Treat fast food outlet at the eastern end of the site closed after the cinema use because of its isolated position on the site and security concerns.

A future road widening reservation affects the site along the southern boundary to Morrison Road and the eastern boundary to Swan Ave. It is understood that Morrison Road will eventually pass over the Roe Highway with no access to Rose Highway.

Areas of Midvale immediately east of Roe Highway have light industrial uses south of Morrison Road. A large area to the north of Morrison Road is the subject of a revised West Stratton Structure Plan recently lodged with the City of Swan. As the draft Structure Plan has not yet been released for public consultation, there are no details available at this stage, however, a previous 2010 draft Structure Plan for the future urban area had an estimated capacity of 750 lots.

East of the Avon Freight Rail Line, Morrison Road is the major connection into the suburb of Swan View, an area with 8,700 people within a short drive of the subject site. The isolated urban area east of the rail line continues north into Stratton Park (3,870 people) and the growing area of Jane Brook (3,450 people in 2014). South of Swan View, part of Greenmount north of Great Eastern Highway has 2,220 people.

Situated at the ‘entry’ to Midland, just west of the Roe Highway, the site has good access and road connections for a unique and differentiated retail offer such as ALDI, to a large area of


approximately 18,500 people (2015) which will continue to grow with development at Jane Brook and in the West Stratton Structure Plan area.

The site has the potential to draw on local residents and traffic moving between the discrete residential areas east and west of Roe Highway and the freight line. The site is well exposed and will generate usage from people visiting the recreation facilities in the area.

The site sits midway between the large regional shopping facilities at Midland Gate and the nearest neighbourhood centre known as Darling Ridge at West Swan in the Shire of Mundaring – both about 1.5 km from the subject site. A small local centre (< 600 sqm) on Hooley Road is embedded in the residential area south of the site but its retail functions are very limited and not directly competitive with the ALDI proposal.

Figure 4: Local context

Source: Nearmap image - April 2015, Deep End Services


There are existing bus stops on Morrison Road adjoining and opposite the site. These stops are on six bus routes which pass along Morrison Road and service loops through West Swan, Stratton and Jane Brook then through to Midland Gate Shopping Centre and Midland Station (refer Figure 5). For those with low mobility, the site is accessible via direct or connecting bus services from large areas of the broad Midland catchment.

Figure 5: Transperth bus routes

Source: Transperth


2.3 Proposed development

The site plan (refer Figure 6) shows a freestanding ALDI supermarket of 1,950 sqm (gross lettable area) set back against the eastern boundary of the site with the shop front and pedestrian entry oriented to Morrison Road.

Two other sites are created for other non-shop uses which will be the subject of separate applications and could include ‘Fast Food Outlet’ and ‘Consulting Rooms’ which are currently permitted under the provisions of Special Use No. 21 zone. A range of other non-retail uses may be appropriate for the site given its high exposure and good accessibility including child care centre, motor vehicle wash, private recreation (gym) and service station.

The plan shows parking for 150 cars on-site which is in excess of ALDI’s requirements and would partly cater for other uses developed on the residual sites. Site access is from two points on Gray Drive, a central point with full turning movements catering to most traffic approaching the site from Morrison Road and a second driveway to the north, primarily for delivery vehicles.

ALDI will provide a close food and grocery option for local residents of Midland who wish to easily access a convenient supermarket on the main road and others visiting the recreation facilities off Gray Drive. For residents of Swan View and Stratton Park, the ALDI site is only a short additional drive-time past other local supermarkets east of Roe Highway. The experience in the eastern states is that customers attracted to ALDI’s highly competitive pricing and unique range of weekly specials will travel further on a regular or occasional basis.

Established customers use ALDI in various ways including:

• As their only dedicated supermarket.

• On an occasional or infrequent basis but making large purchases. These customers will travel to ALDI from more distant areas which has the effect of expanding ALDI’s catchments in many areas.

• As a regular ‘top up’ visit complementing visits to other supermarkets.

• Monitoring weekly pamphlet and on-line catalogues for specials and regular seasonal promotions.

The site is well-placed to provide convenience and good parking for local residents and those who shop less frequently but will find it accessible via the Morrison Road and Roe Highway connections.


Figure 6: Site plan

Source: 1:1 PH Architects


3. Existing policy and centres

3.1 Metropolitan Policy

State Planning Policy 4.2 Activity Centres for Perth and Peel (2010) (the Policy) provides broad requirements for the planning and development of new activity centres and the redevelopment and renewal of existing centres in Perth and Peel.

The Policy is prescriptive in the existing and future locations of the Capital City Centre, Strategic Metropolitan Centres (10 including Midland), Secondary Centres (19) and District Centres (69). For the lower tiers of the Centres Hierarchy, the policy does not identify Neighbourhood and Local Centres but details typical characteristics and performance targets in Table 3.

Table 1: Extract from State Planning Policy 4.2 (Table 3)

Typical characteristics Neighbourhood Centres Local Centres

Main role / function Neighbourhood centres provide for daily and weekly household shopping needs, community facilities and small range of other convenience services.

-

Transport Connectivity and accessibility

Stopping / transfer point for bus network.

-

Typical retail types Supermarkets Personal services Convenience shops

-

Typical office development Local professional services - Future indicative service population (trade) area

2,000-15,000 persons (about 1km radius)

-

The 2010 policy modified the earlier centres policy by removing prescriptive floorspace allocations to centres although Table 2 of the Policy (Activity Centres Hierarchy) notes that Local Centres are “any retail centre with a shop floorspace under 1,500 sqm NLA”.

Under Section 5.1.2 Policy Provisions for Neighbourhood and local centres, the policy states that local planning strategies should reflect the policy provisions including the metropolitan activity centres hierarchy and the identification of smaller neighbourhood and local centres.

(1) Neighbourhood centres are important local community focal points that help to provide for the main daily to weekly household shopping and community needs. They are also a focus for medium density housing. There are also many smaller local centres such as delicatessens and convenience stores that provide for the day-to-day needs of local communities.

(2) Neighbourhood and local centres play an important role in providing walkable access to services and facilities for communities. These centres should be recognised in local planning strategies, and also in structure plans for new urban areas.

Under Section 6 Implementation:

(2) The responsible authority should not support activity centre or other structure plans, scheme amendments or development proposals that are likely to:


§ Undermine the activity centre hierarchy or the policy objectives; § Result in a deterioration in the level of service to the local community or

undermine public investments in infrastructure and services; or § Unreasonably affect the amenity of the locality through traffic or other impacts.

(3) Unacceptable impact may include a physical or financial cause that would result in an adverse effect on the extent and adequacy of facilities and services available to the local community that would not be made good by the proposed development itself.

3.2 City of Swan Local Planning Strategy

The City of Swan Local Planning Strategy was prepared in conjunction with Local Planning Scheme No. 17 and is intended to provide guidance on the future development of the city and a basis for the development requirements of the Planning Scheme.

Under Section 5 Aims and Strategies for Successful Commerce, the overall aim is:

To provide for safe, convenient, attractive and viable commercial facilities, which meet the diverse needs of the community with respect to the retail distribution of goods and commercial services, and contribute to a high level of employment self-sufficiency for the resident workforce.

The relevant Strategies are:

Provide a hierarchy of commercial centres comprising the Midland Strategic Regional Centre, Ellenbrook Regional Centre, neighbourhood centres, local centres and isolated shops, with a full range of commercial services and facilities to meet the needs of the resident community.

Ensure the size and composition of commercial centres is such as to meet the needs of the catchment population without prejudicing the level of services provided by other centres in the district.

3.3 City of Swan Commercial Centres Strategy

While somewhat dated, the activity centres hierarchy detailed in the City of Swan Commercial Centres Strategy 2004 still reflects the current distribution and zoning of centres in the city.

The Strategy identified the following centres (refer Table 2) relevant to the subject site which are mapped in Figure 7. The measured retail and non-retail floorpsace of these centres is detailed in Table 3.

Table 2: City of Swan Commercial Centres Strategy - classification of Centres

Centre / Locality Centre type Size class Size range Midland Regional Strategic Up to 80.000 sqm Stratton Park Neighbourhood Small 1,500 -3,500 sqm Great Northern Highway Midland Local Medium 300-600 sqm Hooley Road, Midvale Local Small 0-300 sqm Darling Ridge Pt, Swan View Local Small 0-300 sqm Tanner St, Middle Swan Local Large 600 – 1,500 sqm Jinda Road, Koongamia Local Medium 300-600 sqm


3.4 Shire of Mundaring centres

There are two centres in Swan View, relatively close to the subject site, that fall within the Shire of Mundaring. These are:

• The Darling Ridge Centre on Morrison Road which lies just inside the municipal boundary and east of a small group of shops and tavern located in the City of Swan.

• The Coles-based Swan View centre on Marlboro Rd, a short distance from the Darling Ridge Centre.

While these centres would be typically classified as Neighbourhood Centres under the metropolitan classification and the same criteria used by the City of Swan, they are zoned Local Centre under the Shire of Mundaring Local Planning Scheme. For the purposes of this report, they are mapped and referred to as neighbourhood centres.

3.5 Distribution of Centres

The distribution of centres and supermarkets in the region is shown in Figure 7. Some initial observations are:

• The central part of Midland, an area between Guildford and Roe Highway, is dominated by the Midland Strategic Metropolitan Centre. The area, with a population of 13,350 people, has no neighbourhood centres and a range of relatively poor local centres on main roads and local streets. There are no supermarkets or grocery stores of any substance in the local centres, so that all food and grocery shopping by residents of the area is either directed to the busy and, at times, congested Midland centre or undertaken outside the area.

• The retail floorspace inventory of the broader catchment area (refer Table 3) shows that the Midland SMC with 103,100 sqm of retail floorspace (excluding homemaker and showroom floorspace) has 86% of the retail floorspace in the area with the 4 neighbourhood centres and 5 identified local centres having a combined 17,350 sqm or 14% of the total space. The concentration or imbalance of floorspace to Midland SMC is exacerbated by the variations in quality.

• The 18,500 people living east of Roe Highway and north of Great Eastern Highway have access to three neighbourhood centres – Swan View, Darling Ridge and Stratton Park. The size, choice and quality of supermarkets in this area could be described as moderate or barely adequate. To access larger, better ranged supermarkets or anything other than basic services and commodities, residents of West Swan are forced to the larger Midland centre which is between 3 and 7 km by road for these residents.

• There are no District Centres in the Midland – West Swan area so that shopping is polarised to either the large or small and dated centres.

• The overall Midland – West Swan area of almost 32,000 people is divided by the Roe Highway and Avon Rail freight line in to two distinct geographic markets. Central Midland has little diversity and choice outside the boundaries of the Midland MSC while the larger area to the east has a moderate-poor range and quality of centres.


Further to the limited range and choice of supermarkets and floorspace outside Midland MSC, we note the Metropolitan Policy states in Clause (3) of Section 6.2.1 (Role of Local Planning Strategies) that:

(3) Local planning strategies should guide the long-term distribution of retail and commercial floorpsace and housing supply via a network of centres that (amongst other things):

§ Mitigate against the potential for an over-concentration of shopping floorspace in large activity centres at the expense of a more equitable level of service to communities.

Figure 7: Retail centres and supermarkets

Source: Deep End Services; MapInfo


Table 3: Retail centres floorspace summary by category

Figure 8: Retail centres floorspace mix

Source: Deep End Services

Food

Retail area Smkts

Other food & drink

Non-food & services

Total retail

Non-retail Vacant

Total floorspace

Vacant % of total Major tenants

Midland Strategic Metropolitan Centre

Midland Gate 7,403 4,447 37,724 49,574 6,831 1,175 57,580 2.0%Big W, Kmart, Target, Coles, Woolworths

Centrepoint Midland 4,650 1,172 2,294 8,116 145 145 8,407 1.7% WoolworthsRemainder Midland SMC 1,891 7,875 13,963 23,729 9,425 3,870 37,024 10.5% Supa IGATotal Midland SMC 13,944 13,495 53,981 81,420 16,401 5,190 103,011 5.0%

Neighbourhood centresDarling Ridge 1,206 1,076 563 2,844 170 92 3,106 3.0% IGAStratton Park 1,448 901 458 2,807 506 215 3,528 6.1% IGASwan View 2,959 413 309 3,681 - 170 3,851 4.4% ColesHelena Valley Shopping Centre 1,020 405 285 1,710 95 - 1,805 0.0% IGA

Local centresHelena Centre - 70 180 250 855 - 1,105 0.0%Koongamia - 490 - 490 - 240 730 32.9%Dance Drive, Middle Swan - 625 - 625 - 75 700 10.7%Toodyay Rd, Middle Swan - 430 125 555 100 - 655 0.0%Hooley Rd, Midvale - 172 110 282 88 157 527 29.8%Great Northern Hwy - 490 1,000 1,490 - 380 1,870 20.3%

Total 20,577 18,566 57,011 96,153 18,216 6,519 120,888 5.4%

Source: Deep End Services June 2015 survey, PCA


3.7 Centre descriptions

3.7.1 Midland Strategic Metropolitan Centre

‘Strategic Metropolitan Centres’ (SMC) are to be planned and developed as the main regional activity centres in Perth below the Central City area. SMCs are multipurpose centres that provide a diversity of uses and a full range of economic and community services necessary for the community in their catchments.

Midland is the designated SMC for the north-east sub-region of Perth. It therefore serves residents of the City of Swan, the broader north-east region out to Ellenbrook and a large rural hinterland.

The size, strengths, weaknesses and opportunities of Midland are well documented in the Midland Activity Centre Master Plan. The centre has a range of retail, commercial, institutional and transport nodes that create a diverse centre. There are a number of new projects and infrastructure initiatives that will see Midland better capitalise on its broad regional catchment of over 200,000 people. For this assessment however the most relevant aspects are the size, composition and strength of the retail elements which fall into three separate areas.

3.7.1.1 Midland Gate Shopping Centre

Midland Gate is the primary retail focus for Midland and the largest centre in the eastern and north-eastern region of Perth, beyond Morley. The first stage was developed in 1980 and has now grown through two major extensions to a complex of approximately 50,000 sqm of retail floorspace plus cinemas and office lifting the total centre area to 57,580 sqm (Source: PCA).

The centre has three discount department stores (Kmart, Target, Big W), two full-line supermarkets operated by Coles (3,588 sqm) and Woolworths (3,815 sqm) and 175 shops.

The last published turnover level for the centre was $408 million1 at December 2014. Its average sales per sqm across the centre were $8,455 ranking it 11th out of a group of 83 peer group centres of similar size and type across Australia. Midland Gate’s strong performance is matched by other regional centres in Perth where development and planning restrictions over the last 10 years have resulted in an undersupply of regional shopping centre floorspace and with buoyant economic conditions, sales productivity levels are amongst the highest in Australia.

1 Source Shopping Centre News Vol. 33 No 1 2015. Retail turnover for the 2 months to December 31 2014 includes all retail sales including GST from all tenancies where the manager is provided with sales data including cinemas, restaurants, and travel and entertainment venues.


In March 2014, the Metro East Joint Development Assessment Panel approved a development application for the expansion of Midland Gate to 75,765m2 GLA - an increase of 18,610m2 GLA. The expansion over the eastern car park and redevelopment of existing areas includes the relocation and expansion of Coles (by 2,938 m2 GLA to 6,258 m2 GLA), a new ALDI store, a new small discount department store, approximately 100 additional shops (approximately 11,000 m2 GLA), a reduction in the areas of K Mart and Target and reorganisation of existing mall areas. The overall parking supply will increase by 806 bays to 4,011 bays.

3.7.1.2 Centrepoint Midland

The recently upgraded Centrepoint complex (8,409 sqm GLA) is situated at the western approach to Midland. It provides a convenient option for shoppers than the larger, more congested Midland Gate. Centrepoint had the first supermarket in Midland, opening in 1972.

The neighbourhood-style centre now has a large Woolworths (4,650 sqm) and 20 external and mall-based shops with a large at-grade car park of 436 spaces. There were no vacancies at the time of our inspection. The centre is convenient for passing and through traffic and draws commuters from the railway station across Victoria Street. Woolworths is thought to be a successful store trading at strong levels.

3.7.1.3 Other Midland

The balance of the Midland MSC has approximately 23,729 sqm of occupied retail and services floorspace, comprising 9,766 sqm in food and non-food including a large number cafes and restaurants. The major grocery element is a free-standing Supa IGA (1,891 sqm) situated with Dan Murphys and a pharmacy in a small strip development with car parking between Great Eastern Highway and Victoria Street. This group of shops is known as Midland Central.


3.7.2 Darling Ridge

The Darling Ridge neighbourhood centre (2,331 sqm GLA) is one of three neighbourhood centres serving the 18,500 people in the Swan View – Stratton Park area, east of the Roe Highway and rail freight line. It is situated on the north-east corner of Miles Road and Morrison Road, Swan View 1.5 km east of the subject site and falls just within the Shire of Mundaring where Miles Road forms part of the municipal boundary with the City of Swan.

The centre was built in 1976, one year before the nearby Coles-based Swan View shopping centre. It sits on a 0.85 hectare site and has an open plan layout with a small IGA supermarket (1,206 sqm) set back and sleeved by a strip of 11 specialty shops which include a pharmacy, real estate agent, hairdresser, Subway, bakery, fish & chips, noodle bar, kebabs and Liquorland. The only vacancy is a shop formerly occupied by a butcher. The centre has a Caltex fuel station on the Morrison Road frontage with car parking for the centre (125 spaces) on either side of the fuel canopy and to the rear of the centre for staff. The site is developed to its capacity.

The Darling Ridge centre has a good range of local shops, it is central to the Swan View catchment and has good exposure and access for Morrison Road traffic. On the north-west corner of Morrison and Miles Roads is the Pig & Whistle Tavern and further west are elderly persons units and a small group of shops beside Swan View Park, occupied by a café, dry cleaner, pizza hut and video store.

3.7.3 Swan View

The Swan View neighbourhood centre, also in the Shire of Mundaring, is just 600 metres south-east of the Darling Ridge centre. It has an embedded location at the corner of two local streets, one block south of Morrison Road. Swan View is a small internal mall-based design typical of its era (built in 1977) with a mid-sized Coles (2,959 sqm) and just 7 specialty shops including a bakery, butcher, green grocer, hairdresser, café, newsagent and pharmacy. There is a vacant tenancy which appears to have been formerly occupied by a medical centre.

Coles is the largest of the three supermarkets in the Swan View – Stratton Park area with the two IGA’s at Darling Ridge (1,206 sqm) and Stratton Park (1,448 sqm) significantly smaller in their size and carrying capacity.

The centre has upgraded its external fascia in recent years however much of the centre is still dated in design and appearance.


3.7.4 Stratton Park

The Stratton Park neighbourhood centre is the only centre in the north-east for the established suburb of Stratton and the growing area of Jane Brook. It is situated on Farrall Road and serves a local catchment between Talbot Road and Talbot Road Bushland (to the east) and the freight line to the west.

The L-shaped, open plan layout has a small IGA (1,448 sqm) in a small internal mall with 15 mostly external facing specialty shops and a medical centre. There are two vacancies inside the mall. The balance of the centre has five take away food shops, Liquorland, real estate agent, newsagent, bakery, hairdresser, chemist and video hire. An independent fuel station is part of the centre on the corner of Farrall Road and O’Connor Road.

The site is 2.5 km by road from the subject site and a similar distance north of the Darling Ridge centre on Morrison Road. Stratton Park should benefit from a growing local population in the Jane Brook estates although the centre is becoming dated and in need of improvements.

3.7.5 Local centres

There are four identifiable local centres in the Midland, Middle Swan and Midvale areas that are within the potential catchment of the proposed ALDI store. There are no local centres east of Roe Highway in Stratton or Swan View.


The four existing local centres are:

• Dance Drive, Middle Swan. A small group of shops of about 700 sqm including a drive through Bottlemart, two take away food shops, cake shop and a vacancy. The centre is on a local street and serves the small subdivision of 700 people north of Toodyay Road. The centre is 3.3 km by road from the subject site and while residents of this area could be drawn to the ALDI site, there are no effective competitive retailers at the local centre.

• Toodyay Road, Middle Swan. A small but dated commercial node lies at the intersection of Great Northern Highway and Toodyay Road, comprising two shops on the highway (hairdresser, pest control office), a restaurant, Coles Express fuel and an old two level commercial building on Toodyay Road. This building may originally have been developed for shops but the ground floor tenancies are either vacant or occupied by small business offices with a church group occupying some, or all of the upper level. The node has little or no retail function despite almost 8,700 sqm of land (excluding the Coles Express) zoned General Commercial.

• Great Northern Highway, Midland. A group of five shops (1,870 sqm GLA) is situated around the intersection of Great Northern Highway and Charles Street comprising second hand goods, dry cleaner (former petrol station), a small convenience store / deli, Thai restaurant and lunch shop. The node is just 200 metres north of the Midland centre and office buildings situated on the northern edge that would support the restaurant and lunch shop.

• Hooley Road, Midvale. A small local centre of six shops (527 sqm) is situated central to the residential cell bounded by Morrison Road, Lloyd Street, Great Eastern Highway and Roe Highway – an area of approximately 2,220 people. Despite the large population base living within 400-900 metres of the centre, the adjacent Midvale Primary School and safe and direct local road connections, Hooley Road, like others in the catchment, has limited retail functions with just a take away food shop, costume shop and Chinese Restaurant. There are two vacancies and a small business operating from a third shop. The centre is very close to Midland Gate which has affected the viability of local businesses. The centre is only 920 metres by road from the subject site however the retail functions at Hooley Road are so limited that ALDI would have little or no effect on the existing businesses.

3.7.6 Centres outside the catchment

Other centres identified in the broader region (shown in Figure 7) are south of Great Eastern Highway and outside the catchment area of the subject site. The Helena Valley neighbourhood centre and local centres at Koongamia and Scott St Helena Valley are likely to have limited competitive relevance to the proposal.


4. Need and demand

4.1 New supermarket entrant

Quantitative need and demand assessments typically approach a given geographic market and, through various techniques, seek to establish a supportable case for more floorspace, in total or of a given type, based on population or spending estimates and / or the application of industry benchmarks. In most cases, the new floorspace is treated in a generic form e.g. supermarket floor space or neighbourhood shopping centre floorspace needs.

The need or demand for an ALDI store can, of course, be assessed via these techniques (see Sections 4.2 and 4.3 below) however a qualitative analysis would recognise that ALDI is a significant new entrant to the West Australian retail sector bringing a differentiated format and a much greater level of price competition than has existed before. As indicated in Section 2.1, ALDI is distinguished from the major supermarket chains and smaller independents (who may be of the same size) by virtue of:

• A limited product range but highly focussed on top selling lines.

• Almost exclusively home brands or private labels.

• Unique weekly specials in general merchandise and hard goods.

• Significantly cheaper prices.

• Large average grocery spend per shopper, accommodated by the provision of over-sized trolleys.

ALDI’s proven retail model and strong consumer following, both internationally and in the eastern states of Australia, and the significant benefits that people on low or fixed incomes enjoy by accessing cheaper grocery prices is an important factor in a local planning authority’s consideration of need and demand issues.

These benefits and a desire to bring about greater competition in the supermarket industry has resulted in changes to planning legislation in Victoria and ACT to facilitate ALDI’s entry in certain areas. Indeed many local authorities, recognising that ALDI can ease cost of living pressures for certain population groups, are initiating opportunities and actively engaging ALDI to establish in their areas.

4.2 Regional supermarket supply and demand

On a more conventional basis, this section assesses levels of supermarket floorspace supply and demand in the Midland region and the distribution of supermarkets around the site.

A general measure of the rate of supermarket provision in an area is calculated by dividing the resident population into the total supply of supermarket floorspace (sqm). A demand-supply analysis typically compares the existing rate of provision (sqm per 1,000 residents) in a given area or catchment against metropolitan, state or national benchmarks.

In this case, a local demand-supply analysis of supermarket floorspace around the site is problematic as the Midland MSC with four supermarkets – trading over a wide regional


catchment – is a short distance from the site. A large supply of supermarket floorspace in Midland itself however does not rule out the potential to support a differentiated supermarket offer with high convenience a short distance from Midland Gate and the broader activity centre. Supermarkets, even in close proximity, can of course perform different roles and attract different shoppers from geographic areas based on their offering, other aggregated uses, convenience and accessibility and so on.

Given the particular pattern and type of supermarkets (and their different regional and local catchments) around the Midvale site, the first approach taken is to compare the overall provision of supermarket floorspace in the north-east area around Midland with other similar outer areas centred on SMCs which have a concentration of supermarkets in the SMC and in other surrounding centres.

The SMCs of Joondalup, Armadale and Rockingham can be compared to Midland. The functional regional catchments are shown in Figure 10 around each SMC together with a summary of supermarket floorspace provision – expressed as sqm per 1,000 residents.

Midland has an estimated 20,977 sqm of supermarket floorspace for the 53,295 residents (June 2015) in the defined area extending from Guildford out to Stratton, Jane Brook and Swan View. This yields an existing rate of 394 sqm of supermarket floorspace per 1,000 residents which is marginally lower than the other SMC-defined areas in Perth, where the provision ranges from 407 to 420 sqm per 1,000 residents (refer Figure 9).

Figure 9: Supermarket floorpace provision around SMCs 2015-2019 (sqm per 1,000 people)


Assuming two new ALDI stores at Midland Gate and Midvale and an extended Coles in Midland Gate and allowing for population growth, the average rate of provision for the Midland region will increase to 472 sqm per 1,000 residents by 2019. Known supermarket proposals have also been superimposed on the other SMC areas which will see an increase in provision rates in all areas. Midland will be slightly higher than the other three centres with just a 10% spread from highest to lowest.

Since ALDI at Midvale will draw a thin level of sales from across the broader Midland catchment, the analysis is appropriate and suggests that the effect of two new ALDI stores within three years is relatively small on the overall level of provision. The increase is also sustained by the relatively high average trading levels by the major supermarket chains.

410 390424

394

429 449 452 472

Joondalup Rockingham Armadale Midland

Projected increase 2015-2019

2015 floorspace per capita


The features of Midland’s supermarket provision are as follows:

• There are 2 Coles, 2 Woolworths and 5 IGA supermarkets in the Midland region.

• Three of the four major chain supermarkets (2 Woolworths, 1 Coles) are concentrated in the Midland SMC and thought to achieve strong sales. The proposed expansion of Coles further entrenches the dominance of the major supermarket chains in the region – post Midland Gate expansion Coles and Woolworths will have 70% of all supermarket floorspace.

• With just 1 Coles and 4 IGA stores outside the Midland SMC, there is currently a lack of convenience, diversity and choice for supermarket shoppers.

Figure 10: Perth SMC supermarket provision



4.3 Local and neighbourhood centre floorspace demand

An alternative approach to the assessment of broad supermarket provision rates is to consider the demand and supply of local and neighbourhood centre floorspace in the Midland, Midvale, Middle Swan and Viveash areas. The proposed ALDI and other non-retail uses that may possibly be developed on the site in the future could either constitute:

• A local centre, although ALDI’s shop floorspace (1,950 sqm GLA) is slightly larger than the Metropolitan Centres Policy classification of local centres being below 1,500 sqm; or

• A small neighbourhood centre, although there are no specialty shops in the proposal that would otherwise normally be found in a neighbourhood centre.

The broader Midland regional catchment is unique in that the range of centres outside Midland SMC and west of Roe Highway is confined to four small, poorly provisioned local centres while east of Roe Highway, Stratton and Swan View have three neighbourhood centres and no local centres. Clearly, the dominance of Midland Gate and other retail precincts in the SMC has had a deleterious impact on the provision and viability of other centres within its close catchment area – leading to a significant imbalance in floorspace and distorted shopping patterns.

Adding to the imbalance in retail floorspace, Council’s Urban Housing Strategy summarised in the Midland Local Area Plan (2014) is anticipating significant residential growth in Midland and Midvale - north and south of Morrison Road - from the introduction of higher residential density codes.

Figure 11 shows the areas of higher density through Midland and Midvale which are close to the subject site on Morrison Road. The outlined area in blue is a localised demand – supply area superimposed on the plan for the purpose of calculating theoretical local and neighbourhood centre floorspace requirements for the area. The area includes Midland, Midvale (within the City of Swan) and the suburban areas of Viveash and Middle Swan.

The inset table to the Urban Housing Strategy summarises the number of additional potential dwellings which could result from the higher residential densities. Across the four suburbs within the outlined area, an additional 2,872 dwellings are forecast by 2031.

A simple demand – supply analysis is undertaken of local and neighbourhood floorspace in the area taking account of existing population and retail floorspace supply conditions and factoring in the additional demand from population in the higher density areas only. Table 4 adopts the following steps:

• The population of the defined area (2014) is 10,970 people.

• Applying a local and neighbourhood centre retail floorspace demand rate of 0.53 sqm per capita2 results in a theoretical demand for 5,814 sqm.

• The current local centre floorspace supply in the area is just 2,914 sqm – resulting in an apparent deficiency of -2,862 sqm. This should be balanced against two considerations:

2 The rate of 0.53 sqm per capita for local and neighbourhood centres is taken from the 2004 City of Swan Commercial Centres Strategy. This rate is close to the normally accepted level of 0.5 sqm often adopted for new area planning.


§ The quality of the local floorspace in the area is quite poor and operates at a much lower level than the 2,914 sqm would suggest; and

§ Virtually all of the neighbourhood and local floorspace demands in the area are effectively subsumed within the Midland SMC.

• Under any analysis there is little doubt that the current provision of local and neighbourhood retail floorspace outside the Midland SMC is low and poor.

• The 2,870 additional dwellings expected from the higher residential densities (@2 person per dwelling) would generate an additional 5,740 people in the immediate area.

• @ 0.53 sqm per capita the additional would generate a theoretical demand for 3,042 sqm of local and neighbourhood centre floorspace.

• Adding the existing deficiency (-2,862 sqm) to the future demand calculation (+3,042 sqm), there is almost 6,000 sqm of local and neighbourhood centre floorspace which could be effectively supported by the future population.

The conclusions from this analysis are as follows:

• There is a latent demand for local and neighbourhood floorspace in the area around Midland SMC however the quality of the existing built space, location and local demographic factors and its proximity to the SMC make it difficult for centres based on small business owners to prosper in these locations.

• Virtually all of the current and future demands are likely to be taken up in the Midland SMC.

• The ALDI proposal presents an opportunity for some of this local and neighbourhood floorspace demand to be developed close to the SMC. The floorspace is underpinned by a strong and viable retailer and has the potential to attract other commercial or community uses to the site.

• Most of the expected population growth through higher densities is directly west of the site and is within a short walk for many people, is within a short drive-time for others or can be reached by the local bus network.

• The ALDI development will address many of the objectives of local / neighbourhood centre planning providing goods which are needed by the local area, it builds on existing recreation and community infrastructure to the north and is accessible by public transport.


Figure 11: Local & neighbourhood centre demand area & Urban Housing Strategy (2014)

Source: City of Swan Midland Local Area Plan, 2014

Table 4: Local & neighbourhood centre floorspace demand & supply analysis

Unit/measure

Current floorspace demand & supply -2014• 2014 population 10,970• Retail floorspace1 sqm 2,952• Theoretical demand @ 0.53 sqm per capita 5,814• Current undersupply sqm 2,862

Additional demand to 2031 (Housing Strategy)• Additional dwellings 2,870• Additional population @2 persons per household 5,740• Additional demand @ 0.53 sqm per capita 3,0421 Includes Dance Drive, Toodyay Rd, Hooley Rd and Great Northern HwySource: City of Swan; Deep End Services


5. Trade area analysis

This section defines the expected trade area for the proposed ALDI store and includes an assessment of population, demographic characteristics and retail spending levels.

5.1 Regional population growth

The area from Guildford to Stratton and Swan View comprises four Statistical Areas (SA2s) with a combined estimated resident population of 37,620 people in 2014. The region grew by 1.7% per annum between 2006 and 2014.

The Western Australian Planning Commission released the most recent population projections (Western Australia Tomorrow) at SA2 level in 2015. The projections indicate a higher long term growth rate, averaging 2.3% per annum or 993 people per annum from 2014 to 2026 for the four SA2 areas. The population of the region is forecast to increase by almost 12,000 people over the next 12 years to 49,531 by 2026. Approximately 55% of the region’s population growth is expected in the established SA2 area of Midland – Guildford and a high proportion of this growth will be in the zoned areas for higher residential densities in Midland which are close to the subject site.

Figure 12: Region population by Statistical Area (SA2)

Source: ABS; WA Tomorrow Population Report No. 10, 2015

Table 5: SA2 population forecasts

Statistical Area 2 (SA2) 2006 2011 2014 2016 2021 2026

Midland - Guildford 8,618 10,080 11,207 12,347 15,207 17,867Swan View - Greenmount - Midvale 12,223 12,597 13,128 13,485 14,255 15,965Stratton - Jane Brook 6,879 7,057 7,420 7,561 8,141 8,621Middle Swan - Herne Hill 5,159 5,514 5,865 6,107 6,637 7,077Total region 32,879 35,248 37,620 39,501 44,241 49,531

Source: Deep End Services; ABS; WA Tomorrow, Population Report No. 10, 2015


5.2 Trade area definition

The catchment for the proposed ALDI store at Midvale (refer Figure 13) reflects the unique drawing power of the business which has been identified from in-store customer surveys undertaken by ALDI at established stores in the eastern states. The particular features are a strong localised primary catchment where residents will be drawn to the site because of its close proximity and convenience coupled with extended secondary catchments where ALDI draws customers attracted to the cheaper prices and weekly specials from a much wider area and on an occasional basis.

With these observations and recognising the competition and urban development and geographic features of the area, the defined trade area includes:

• A primary sector covering areas of Midvale within 900 metres of the site and extending east into parts of Swan View between the freight line and Miles Road. The primary catchment stops short of Midland Gate where a second ALDI store is proposed in the next expansion of that centre.

• A secondary north sector extends to Stratton and Jane Brook where the site is still convenient with connections to Morrison Road via Talbot Road and Farrall Road.

• A secondary east sector includes the balance of Swan View and Greenmount north of Great Eastern Highway which is a relatively short drive-time via Morrison Rd or Great Eastern Highway.

• A secondary north-west sector extends to areas of Midland north of Morrison Road and the suburban area of Middle Swan contained by Great Northern and Roe Highways.


Figure 13: ALDI Midvale trade area & supermarkets


5.3 Trade area population

The defined primary trade area has an estimated resident population of 5,318 people in 2015 with a further 20,708 people in the secondary sectors (refer Table 6). The total trade area population is 26,026 people, having increased by 3,070 people since 2006.

Population projections are based on the latest Western Australia Tomorrow population report (2015) at the SA2 level released by the Western Australian Planning Commission and recent trends in dwelling activity in the trade area sectors.

The trade area is projected to grow to 29,316 people in 2021 – an increase of 3,290 people or 550 people per annum over the next six years. Growth will be slightly higher than historical rates from higher density infill development in Midland and Midvale and greenfield subdivisions at the future West Stratton Structure Plan area and future stages at Jane Brook.

Just over 20% of growth is anticipated within the primary sector in the short term, with longer term growth from future development of the West Stratton Structure Plan area.


Table 6: Trade area population

5.4 Population characteristics

The housing and demographic characteristics of the catchment, sourced from the 2011 Census, are presented in Table 7. The demographic characteristics vary across trade area sectors, ranging from young families to older retirees.

The primary sector is characterised by:

• A similar age profile to the Perth average.

• A higher than average proportion of ‘lone person’ households (31% compared to Perth 24%) and ‘single parent’ families (18% vs Perth 11%) resulting in a lower than average household size of 2.45 (vs. Perth 2.62).

• These family structures combined with high unemployment, low white collar occupations (32% vs Perth 49%) and low tertiary qualifications (6% with bachelor degree or higher vs Perth avge. 20%) result in average income levels being 31.5% below the Perth average.

• These lower socio-economic characteristics are also manifest in the high proportion of rented dwellings (43% vs Perth avge. 29%) and low car ownership with 14% of dwellings having no motor vehicle (Perth avge. 6%).

The secondary sectors have varying characteristics as follows:

• The secondary north sector (Stratton & Jane Brook) is typical of new residential areas with larger and younger families and a high proportion of detached houses and mortgaged dwellings.

• The secondary north-west (Midland and Middle Swan) is an older area with an average age of 40.7 years (17% aged over 65 years, Perth avge. 12%), more than one-third of

Catchment area sector 2006 2011 2015 2017 2019 2021

PopulationPrimary 4,589 4,969 5,318 5,498 5,698 5,998Secondary north 6,879 7,147 7,630 7,900 8,200 8,560Secondary north-west 3,299 3,844 4,250 4,500 4,800 5,100Secondary east 8,187 8,323 8,748 8,928 9,098 9,258Secondary 18,365 19,314 20,708 21,528 22,398 23,318Total 22,954 24,283 26,026 27,026 28,096 29,316

Population growth (No. per annum)Primary - 76 87 90 100 150Secondary - 190 348 410 435 460Total - 266 436 500 535 610

Population growth (% per annum)Primary - 1.6% 1.7% 1.7% 1.8% 2.6%Secondary - 1.0% 1.8% 2.0% 2.0% 2.0%Total - 1.1% 1.7% 1.9% 2.0% 2.1%

Source: Deep End Services; ABS; WA Tomorrow, Population Report No. 10, 2015


households are sole-occupants and there is low car ownership and low workforce participation levels. The high proportion of apartments reflects the higher residential densities north of the Midland centre where older dwellings are being replaced with multi-unit subdivisions. There is also a mix of young single and couples with a relatively high proportion of 20-34 year olds (25% vs Perth 22%). Household income levels are also low – similar to the primary sector – being 33% below the Perth average.

• The secondary east sector (Swan View and Greenmount) varies again as an established family area. Here, 41% of dwellings are fully owned (Perth average 30%) and 26% of dwellings have 3 or more vehicles suggesting older children at home with cars. The area is also ageing with a high number of couples without children at home, suggesting a growing number of ‘empty nesters’ moving through to retirement.

The broad area has many characteristics which typically develop a strong following to ALDI. Areas close to the site are older and on low or fixed incomes. ALDI’s clear price differential and convenience, either a short drive or on the bus route, will be appealing to these population segments.

The secondary catchments to the north-east have younger and larger families with large weekly grocery bills. The small IGA stores are more likely to be used for ‘top up’ shopping while ALDI’s store format, pricing, close convenient parking and oversized trolleys are attractive to families buying large volumes. The established but ageing families in Swan View still have significant grocery needs for those with older children at home while others will also be more cost conscious as they move towards retirement age.


Table 7: Trade area characteristics

Demographic characteristic - 2011 Census Primary

Secondary north

Secondary north-west

Secondary east

Total catchment Perth

Usually resident population 4,739 6,725 4,157 7,930 23,551 1,728,694At same address: (1)

• 1 year ago 81% 86% 79% 88% 85% 83%• 5 years ago 56% 62% 47% 68% 60% 55%

Total private dwellings (6) 2,090 2,426 1,913 3,301 9,730 725,983• % unoccupied 7% 5% 9% 7% 7% 9%Persons per dwelling (7) 2.45 2.93 2.39 2.59 2.60 2.62

Participation rate (2) 56% 71% 56% 64% 63% 64%Unemployment rate (2) 9.0% 4.3% 7.2% 4.2% 5.6% 4.8%White collar workers (2) 32% 38% 33% 41% 37% 49%Bachelor degree or higher (2)(3) 6% 8% 8% 10% 8% 20%SEIFA 895 1,005 914 1,015 970 1,027Age group0-9 14% 17% 11% 11% 13% 13%10-19 12% 17% 10% 13% 14% 13%20-34 23% 22% 25% 18% 21% 22%35-49 19% 24% 19% 20% 21% 22%50-64 18% 15% 18% 22% 18% 18%65+ 14% 6% 17% 15% 13% 12%Average age 37.5 32.3 40.7 40.2 37.5 37.4Annual household income (1)(3)(5)

<$41,700 43% 24% 42% 30% 33% 28%$41,700 - $78,200 25% 26% 32% 26% 27% 23%$78,200 - $156,400 27% 40% 24% 33% 32% 34%>$156,400 4% 10% 3% 12% 8% 15%

Average household income $62,253 $85,211 $60,800 $83,313 $75,102 $90,898Variation from Perth average -31.5% -6.3% -33.1% -8.3% -17.4% -

Average household loan repayment $19,575 $21,883 $19,878 $21,919 $21,217 $25,576% of household income 24% 21% 24% 20% 21% 22%

Average household rent payment $13,089 $15,576 $14,043 $14,621 $14,201 $16,791% of household income 27% 24% 25% 26% 26% 22%Country of birth (1)

Australia 71% 78% 67% 75% 74% 63%United Kingdom 8% 8% 7% 10% 8% 12%New Zealand 5% 5% 5% 4% 5% 3%Italy 2% 0% 3% 2% 2% 1%Other 14% 9% 18% 9% 12% 20%Occupied private dwelling tenure (1)(4)(5)(6)

Fully owned 22% 20% 24% 41% 28% 30%Being purchased 35% 56% 31% 42% 42% 41%Rented 43% 24% 44% 17% 30% 29%Dwelling type (1)(4)(7)

Separate house 76% 99% 65% 94% 86% 78%Townhouse/semi-detached 15% 0% 13% 5% 8% 12%Apartment 9% 1% 22% 0% 6% 10%Household composition (4)(5)

Couples with children 24% 41% 20% 31% 30% 33%Couples without children 22% 24% 24% 32% 26% 28%One parent family 18% 15% 16% 13% 15% 11%Lone person 31% 17% 35% 21% 25% 24%Group 4% 3% 6% 3% 4% 4%Motor vehicle ownership per dwelling (1)(5)

None 14% 4% 12% 4% 8% 6%One 37% 30% 44% 29% 34% 34%Two 33% 44% 30% 41% 38% 40%Three or more 16% 23% 14% 26% 21% 20%

Notes:(1) Excludes not stated (5) Occupied private dwellings(2) 15 years and over and excludes not stated (6) Includes visitor only households(3) Excludes inadequately described and/or partially stated (7) Excludes visitor only households(4) Excludes other Source: Deep End Services; Australian Bureau of Statistics


5.5 Retail spending

For the purpose of this report, consumer spending on commodities and services sold by shop-based retailers is grouped under the following categories:

Broad category Spending group Items / services

Food, liquor, groceries & catering (FLG&C)

Food & Groceries Edible supermarket goods (ESGs), non-food groceries inc. health & beauty, magazines & stationery.

Packaged Liquor Take-home liquor Food Catering Take-away food, dining-in. Non-food & retail services

Non-food Auto accessories, fashion, furniture & furnishings, hardware & garden, pharmaceuticals, home appliances & entertainment, homewares, reading & writing, recreational goods.

Retail services Hairdressing & personal care, repairs & alterations, dry cleaning, optical, photo developing, video hire.

To establish the spending potential of a catchment area, Deep End Services uses small area data supplied by Market Data Systems (MDS). The MDS product, known as MarketInfo, estimates spending propensity on retail categories at the small area level using a micro-simulation model and data sets including the ABS’ Household Expenditure Survey (HES), the Census of Population and Housing and Australian National Accounts.

MarketInfo models the effects of demographic variables such as income, ethnicity, age and education level and geographic location on a household’s propensity to purchase products and services. The results are generally regarded as the best proprietary data base of its type in Australia.

A comparison of per capita spending levels in the Midvale trade area against metropolitan Perth is set out in Figure 14. Reflecting lower than average income levels in the trade area, retail spend per capita is also below the Perth average. Average spending on Food, Liquor, Groceries and Catering (FLG&C) in the primary sector is below the Perth average (-5.2%) and also lower across the secondary trade area (-2.8% below the average).

Similarly, spending on ‘Non-Food & Retail Services’ is also below the Perth average in the primary s (-23.1%) and secondary sectors (-11.5%).

Figure 14: Per capita spending rate comparisons

Source: Deep End Services, MDS (MarketInfo); Deloitte Access Economics


Combining population estimates with per capita spending levels in the catchment area, generates the retail spending market for each of the major product groups for 2014/15 and future years (refer Table 8).

In 2015, the catchment generated $196.1 million in FLG&C spending and $139.0 million in Non-Food and Retail Services. Total expenditure was $335.0 million in 2015.

With moderate population growth, the spending market is forecast to increase by about $45.5 million between 2015 and 2021 (at $2015 constant) with FLG&C spending accounting for about 81% of the growth (or $37.0 million). By 2021, spending on FLG&C is projected to increase to $233.0 million.

Table 8: Trade area spending estimates

Average change (%pa)Spending category 2015 2017 2019 2021 2015-17 2017-21

FLG & CateringPrimary 39.3 40.9 43.2 47.2 2.0% 3.7%Secondary 156.8 162.9 172.2 185.8 1.9% 3.3%Total 196.1 203.8 215.4 233.0 1.9% 3.4%

Non-Food & Retail ServicesPrimary 25.3 25.5 26.1 27.4 0.4% 1.7%Secondary 113.6 114.4 116.5 120.2 0.3% 1.2%Total 139.0 139.9 142.6 147.5 0.4% 1.3%

TotalPrimary 64.6 66.4 69.3 74.6 1.4% 2.9%Secondary 270.4 277.3 288.8 306.0 1.3% 2.5%Total 335.0 343.7 358.1 380.5 1.3% 2.6%

Source: Deep End Services; ABS; Market Data Systems; Deloitte Access Economics

Spending market (constant 2015 $m)


6. Retail impact assessment

This section assesses the potential trading impacts from ALDI on other centres in the trade area. The analysis draws on the assumptions, data and commentary from earlier sections and considers the positive employment and other benefits to the community.

The analysis and findings are presented as a series of sequential steps including:

• Projected retail turnover levels for the 1,950 sqm GLA ALDI store for the assumed first year of opening (2019);

• Projected sales redirected from competing centres are modelled and expressed in dollar and percentage terms; and

• New employment and other positive benefits from the proposed development.

6.1 Projected sales

Projected year 1 sales for the ALDI supermarket is assessed at $15.6 million in 2019 (constant $2015) or $8,000 per sqm. Approximately 80% of ALDI’s sales will be in food and groceries and 20% in general merchandise lines reflecting the weekly special buys.

Table 9 shows the projected sales in the form of market shares of available food and non-food spending from catchment area residents in 2019. The small scale of the development in the context of the catchment’s large spending capacity is evident where it shows that it requires just 3.4% of total retail spending by catchment area residents, including:

• 9.0% of retail spending by primary trade area residents;

• 2.1% of retail spending from residents in the secondary north (Stratton and Jane Brook);

• 1.3% of retail spending from residents in the secondary north-west (Middle Swan); and

• 2.5% of retail spending from residents in the secondary east (Swan View and Greenmount).

Table 9: ALDI Midvale site market shares – 2019

Spending ($m 2018/19) Market share (%) Turnover ($m)

Catchment area sectorFLG &

CateringNon-food

& Serv.Total

RetailFLG &

CateringNon-food

& Serv.Total

RetailFLG &

CateringNon-food

& Serv.Total

Retail

Primary 43.2 26.1 69.3 11.6% 4.8% 9.0% 5.0 1.2 6.2

SecondarySecondary north 61.6 42.7 104.3 2.8% 1.0% 2.1% 1.7 0.4 2.2Secondary north-west 37.8 22.2 60.0 1.7% 0.7% 1.3% 0.6 0.2 0.8Secondary east 72.9 51.6 124.5 3.4% 1.2% 2.5% 2.5 0.6 3.1

Total Secondary 172.2 116.5 288.8 2.8% 1.0% 2.1% 4.9 1.2 6.1

Total catchment area 215.4 142.6 358.1 4.6% 1.7% 3.4% 9.9 2.5 12.3Beyond trade area (% sales) 21.0% 21.0% 21.0% 2.6 0.7 3.3Total 12.5 3.1 15.6



By broad product group, ALDI needs to attract just 4.6% of food, liquor, grocery and catering expenditure and 1.7% of non-food and retail services spending. These are very small shares of available spending which are proportional to the scale of the proposal.

In addition to spending from permanent trade area residents, ALDI can expect to generate at least 21% of sales from customers originating from outside the trade area. This includes people travelling to ALDI from outside the area for its destination appeal, passing traffic through to other areas and visitors to the area using the surrounding recreational and leisure facilities. There is a significant workforce in and around Midland SMC that would also live outside the area and pass ALDI in their commuting travel patterns.

6.2 Trading impacts

The method of determining trading impacts on surrounding centres is based on the following:

• Projected sales by product group (Food & Non-food) for ALDI are modelled by trade area sector (refer Table 9).

• For each trade area sector, the projected sales are allocated away from various centres within, or close to, each sector on the basis of the strength of the competing centre (measured by size and number of competing food retailers and known or estimated sales levels), relative distance and accessibility and the general appearance and vitality of each centre.

• Sales which are derived from beyond the defined trade area are also notionally allocated away from some centres in the trade area, although a proportion will also be new sales to ALDI.

• The sum of the individual product group and trade area sector assessments generates a total sales level diverted from competing centres and retailers. This is expressed in dollar terms in 2019 and as a percentage of the sales that would otherwise have been achieved by that centre in that year.

It should be noted that the impacts are modelled on the overall centre and shown in terms of impacts to total sales. It is generally not the role of retail impact reports to determine impacts on individual operators as this is not usually a matter that a planning authority or review body would have regard to. The more important consideration is whether or not the proposal would result in significant economic impact to an existing centre that could, for example, cause a significant increase in vacancy rates or economic and retail blight to the extent that the community is not better off – even after the positive effects of the development are considered.

The estimated trading impacts are presented in Table 10. The main centres where ALDI is likely to draw sales from are those containing medium to large-scale supermarkets, predominantly within the Midland SMC and to a limited extent on the smaller centres with Coles (Swan View) and IGA stores.

As the proposal is for a supermarket, the sales impact is likely to fall mainly on supermarkets within each centre, with little or no change to specialty shop sales.


Table 10: ALDI Midvale site trading impacts

In relation to impacts on individual centres:

• Midland Strategic Metropolitan Centre includes Midland Gate, Centrepoint Midland and the remainder of the Midland SMC. Midland Gate is assumed to complete its eastern extension prior to 2019 to include ALDI, a small department store and additional specialty shops.

The Midland SMC is expected to incur the highest impact in dollar terms given the concentration of supermarket floorspace (2 Woolworths, Coles, Supa IGA and ALDI), proximity to the proposal and lack of other local options. The impact on the SMC is modelled at -$9.9 or -1.0% of sales that the centre would otherwise have achieved in 2019. The impact is distributed between the main elements of the SMC as follows:

§ Midland Gate (Coles, Woolworths) -$7.0m or -1.3% § Centrepoint Midland (Woolworths) -$1.6m or -2.2% § Remainder Midland SMC (IGA) -$1.2m or -0.8%

The sales impact is a one-off re-allocation to ALDI and sales levels should quickly recover in the following year. The impact will fall disproportionately on Coles, Woolworths, the new ALDI and Supa IGA who are large, well-resourced retailers that can withstand small sales fluctuations from occasional changes to their competitive position. The specialty shops will experience little or no effects.

• The highest impact in percentage terms will be on Swan View Shopping Centre, which includes Coles. The centre includes a 3,000 sqm Coles supermarket and a small selection of convenience retailers. The modelled impact is -4.0%, amounting to -$1.8m in sales. The impact will fall mainly on Coles with minor impacts on the three fresh food retailers.

Retail floorspace (sqm) Retail sales ($m) ALDI Midvale

Centre

2015 2019 20152019 -

no ALDI Midvale

2019 -post ALDI Midvale

($m) (%)

ALDI Midvale - 1,950 - - 15.6 n/a n/a

Midland Strategic Metropolitan CentreMidland Gate 49,574 65,900 401.1 525.1 518.0 -7.0 -1.3%Centrepoint Midland 8,116 8,116 69.6 74.4 72.7 -1.6 -2.2%Remainder Midland SMC 23,729 23,729 138.8 148.4 147.2 -1.2 -0.8%Total Midland SMC 81,420 97,746 609.5 747.8 737.9 -9.9 -1.0%

Neighbourhood centresDarling Ridge 2,844 2,844 27.1 28.9 28.1 -0.9 -3.0%Stratton Park 2,807 2,807 26.4 28.2 27.6 -0.6 -2.2%Swan View 3,681 3,681 41.9 44.8 43.0 -1.8 -4.0%Other Local Centres* 2,952 2,952 11.5 12.3 12.2 -0.1 -0.5%

Other / beyond trade area - - - - - -2.4 -

Total 93,703 110,029 716.3 862.0 848.8 -15.6

* Includes retailing in Midland and Middle Swan along Dance Drive, Toodyay Rd, Hooley Rd and Great Northern HwySource: Deep End Services


• Darling Ridge is the closest centre to the subject site and the IGA serves a small local catchment area. The impact on the centre is modelled at -0.9m or -3.0% of sales, mainly redirected from IGA with few fresh food retailers in the centre. This centre will still be a convenient option for passing traffic and local ‘top up’ shopping.

• The redirected sales from Stratton Park will amount to -2.2% or -$0.6m, with the impact again largely concentrated on the IGA supermarket.

• The smaller local centres and retailers in Middle Swan and Midland will experience little or no impacts due to their limited retail mix and absence of competing floorspace. Any small convenience stores in these centres are mainly for ‘top-up’ shopping or attracting passing trade or sales from a local workforce. ALDI is unlikely to attract a significant share of this small convenience market.

• Around 15% of the projected sales or $2.4 million is unallocated from specific centres and likely to be drawn from a range of other retailers/centres across the broader area. It also includes part of ALDI’s general merchandise and non-food sales that could be drawn from a wide range of bulky goods and showroom retailers, hardware stores, and other retail formats outside the nominated centres who sell similar products to ALDI’s unique weekly specials range.

A summary of the change in retail sales at each of the centres from 2015 to 2021 is shown in Figure 15. The Midland Gate redevelopment is assumed to occur in 2018, which will see a major increase in the centre’s sales. The impact of the ALDI development in 2019 will have a minor impact on the sales at each centre, with average growth in the market over the 2015 to 2021 period of 2.1% per annum at constant $2015 (excluding inflation).

Figure 15: Retail sales change, 2015-2021

Other local centres includes retailing in Midland and Middle Swan along Dance Drive, Toodyay Rd and Great Northern Hwy


6.3 Impact conclusions

The development of a new centre or supermarket of any size or category inevitably results in sales moving from a range of existing centres and retailers to the new location. Importantly, this comes about from consumers electing to change their normal shopping patterns, permanently or occasionally, as a result of:

• An improvement in the range and choice of supermarkets in a local area including better value and pricing;

• Improved accessibility and reduced travel time; and / or

• Perceptions of improved amenity, convenience, parking, design and layout.

The proposed ALDI at Midvale will provide an additional supermarket option for residents in the area but will not result in significant trading impacts or the closure of multiple retailers at existing centres for the following reasons:

• A small provision of floorspace. The projected supermarket floorspace is just 1,950 sqm GLA or less than 2% of total projected retail floorspace in the Midland area in 2019. The store is significantly smaller than Woolworths and Coles stores in Midland and Coles at Swan View. The store is similar in size to the Supa IGA in Midland and only marginally larger than the two IGA stores at Darling Ridge and Stratton Park. ALDI’s projected sales are quite low in the context of other larger centres / supermarkets across the region.

• Proposed mix. ALDI will provide a convenient option and point of difference to existing supermarkets in, or just outside, the catchment. Most of the projected impacts are likely to fall disproportionately on supermarkets in the area, some of which have limited competition compared to other metropolitan areas and can readily absorb the relatively small sales transfers.

• No specialty shops. The proposal has no specialty shops so that residents will continue to visit and use other centres where small businesses, operating from specialty shops, will be unaffected. This should protect the generally high specialty shop occupancy levels in the area.

• Population growth. Moderate population growth from higher density residential development in the local area and broadacre subdivisions in the wider north-east region area will continue. Continued growth will ensure that small sales impacts from new developments, such as ALDI Midvale, should be recovered in the short term through local population and spending growth.

In overall terms, the projected sales and accompanying range of impacts are relatively small and proportional to the role and small incremental change in floorspace at Midvale. The sales re-allocations at all centres are within the tolerance levels of a normal competitive environment where retail turnover naturally fluctuates with changes in economic and market conditions. Impacts are distributed amongst a range of different centres and individual retailers across the hierarchy.


6.4 Benefits of ALDI development

6.4.1 Employment benefits

Total direct on-site retail employment generated by the proposed ALDI is estimated at 13 full-time equivalent (FTE) positions. Applying retail and commercial employment multipliers developed by the Australian Bureau of Statistics, the total number of indirect FTE jobs generated by the operation of the store is estimated at 8, resulting in an estimated 21 FTE jobs created in the local and broader economy from the proposed development.

The new retail employment opportunities on-site will benefit the local economy and many will be filled by local residents living close to the centre.

Unemployed people, students, semi-retired people and those looking to work close to home with part-time hours in conjunction with family care and duties are strong candidates for retail employment opportunities. Many of these jobs may be taken by local residents who would otherwise not work in the absence of ALDI.

The employment positions offered by ALDI are reliable, stable and provided in a safe and professional work place where extensive training is provided and new skills are developed which can lead to further career opportunities in the retail industry.

The increase in local employment will increase wages and salaries in the area which should be spent in part, with local retailers.

The construction phase will also generate employment opportunities, including both on-site full-time jobs as well as indirect employment or multiplier effects from wages and salaries paid to construction workers.

6.4.2 Other benefits

A new ALDI Midvale store will provide other economic and community benefits for catchment area residents.

The new supermarket will be a contemporary format reflecting the latest in ALDI’s standards and in-store concepts. It will provide a convenient supermarket option and point of difference to other supermarket chains in the trade area and nearby. ALDI will improve the quality, choice and convenience of supermarket shopping and new customers drawn to the site.

The proposal, classified as either a local centre or small neighbourhood centre, brings a ‘local’ shopping option to residents of Midland and Midvale who have no other choice than to negotiate the busy and congested areas of the Midland SMC to access supermarkets.

The proposal addresses a redundant site which currently projects a poor image at the eastern ‘gateway’ to Midland on Morrison Road and for people entering the important leisure and recreation precinct. It restores a commercial use which in is not dissimilar to the size and scale of the former cinema complex.

The Swan Regional Recreation Park attracts families from a broader region who can combine associated trips with a close and convenient visit to the unique supermarket offering.


ALDI’s overall cheaper price structure will provide significant savings for young families, retirees and pensioners and other price-conscious residents. Since the area is over-represented with low income groups, ALDI will find strong support from these individuals and families.


7. Conclusions

Since 2001, ALDI has grown rapidly in the eastern states and shown itself to be the only effective competitor to the major supermarket chains during a period when other discount supermarket formats have closed.

ALDI will open its first supermarkets in Perth in early-mid 2016. The overall Midland market is considered large enough for two stores initially – one at Midland Gate in the proposed eastern extension which will serve a broad catchment through the north-east region of Perth and a second main road, convenience-based store at Midvale. The Midvale store will complement the Midland Gate store and draw on a local customer from the surrounding area and east of Roe Highway where the range and quality of supermarkets is quite poor.

The proposal will restore a commercial use and create employment opportunities on a site which has limited development potential for other uses without a successful anchor tenant on the site. The small supermarket format is compatible with the adjoining regional recreation facilities where visitors / participants can also combine a visit with supermarket shopping. The concept of co-locating retail and recreation uses is supported by metropolitan policy.

The activity centres hierarchy across the City of Swan and Shire of Mundaring will not be undermined by the proposal. In fact, our analysis shows there is a significant imbalance in the range and choice of centres in the Midland area. Currently, residents have the choice to use one or more elements of the large and increasingly busy Strategic Metropolitan Centre. There are no neighbourhood centres and several poor local centres for the 11,000 people living east and north of the SMC. The proposal will therefore bring diversity to the network of centres and provide choice and a convenient option for local residents.

As some 85% of retail floorspace in the region is concentrated in the Midland SMC, the proposal addresses metropolitan policy which states that:

Local planning strategies should guide the long-term distribution of retail and commercial floorpsace and housing supply via a network of centres that (amongst other things) … mitigate against the potential for an over-concentration of shopping floorspace in large activity centres at the expense of a more equitable level of service to communities.

The ALDI proposal is a sustainable use, proven to be successful in many comparable locations in the eastern states. Where other uses have failed in this location (cinema complex & fast food outlet) and other proposals for a retirement village have not materialised, a small retail node backed by ALDI is a viable long-term use which has the potential to attract other non-retail activities to the residual pad sites. This will reinforce the overall local commercial and community focus of the area on and north of Morrison Road.

Other benefits are that:

• The catchment will experience population growth and increasing demands for more and better retail floorspace and supermarket options through higher residential densities in Midland / Midvale and eventually the development of the West Stratton Structure Plan area. The Midvale site is ideally placed mid-way between these two areas to serve some of their needs.


• ALDI will also bring choice and variety to residents of Swan View and Stratton who have seen little or no change to the range and quality of supermarkets in those areas for at least 20 and possibly as long as 30 years.

• ALDI’s location 1.5-2.0 km from the Darling Ridge and Swan View centres and 2.5 km from the Stratton Park centre is far enough to mitigate the impacts from the development as these centres and their supermarkets will continue to be the dominant retail nodes for their areas.

• The assessed impacts on existing centres (and supermarkets) is small and proportional to the size of the development and sales volumes. The potential impacts are lessened by the low vacancy rates across all centres in the area and the absence of specialty shops on the site. Sales re-allocations will be spread around the major supermarkets which are all trading at moderate - strong levels.

• Increased competition between supermarkets is beneficial to consumers and will not adversely affect the balance of the centres hierarchy. Consumers will use ALDI for some of their grocery needs but continue to visit the major chains and specialty shops and services at Midland and other centres.

ALDI has developed a strong and loyal customer base in its existing markets. Since 2001, it has not closed a store nor retreated from any market in which it has established, underlining the success of the business. The demographic profile of the Midvale catchment is one of retirees, low income families and young or established families with large grocery bills. These groups are all particularly well-suited to ALDI’s format and pricing position. Independent pricing surveys have shown that ALDI can significantly reduce a family or individual’s cost of living.

The City of Swan can be confidant that supporting the proposed scheme amendment will:

• Not undermine the activity centre hierarchy or the policy objectives; and

• Not result in a deterioration in the level of service to the local community or undermine public investments in infrastructure and services.

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