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Business / Property developer bites back over comments on economic impact of proposed new Co-op stores

The Co-op already operates two super markets in Shetland, one in Lerwick, the other in Brae. Photo: Malcolm Younger for Shetland News

THE DEVELOPER behind plans for two new Co-op stores in Shetland has hit back at concerns raised over the long-term impact on rural shops – claiming there is “no merit” in the views.

It comes in response to Shetland Islands Council’s economic development manager Tommy Coutts saying the assumption that proposed Co-op stores in Sandwick and Scalloway will not threaten the long-term future of local shops should be challenged.

The Co-op plans to add to its Lerwick and Brae shops by building new stores at East Voe in Scalloway and Stove in Sandwick, but critics say they will have a significant impact on existing local retailers and the wholesale sector.

Coutts wrote to the planning service at the end of August to offer his view that while there will be some benefits to the two new shops, there are question marks around the Co-op’s assumption there will not be a significant or long-term impact on local retailers.

It came after the property developer behind the plans said a retail impact assessment and economic statement demonstrated the proposals would “not have a discernible impact on the vitality or viability of Lerwick town centre or on the shopping facilities within rural/village areas including Sandwick and Scalloway”.

Writing in response to Coutts’ letter, a representative for Edinburgh based Hargest Planning on behalf of the developer claimed there is “absolutely no basis” for his comments on the fragility of rural shops.

“Certainly there will be some businesses that are profitable or run more efficiently than others, but retail impact assessment and the planning system does not seek to protect individual businesses from competition – indeed there is a clear aim to promote competition and choice for the benefit of consumers,” it added.

The planning company referred to government statistics on business and disputed the view that there are higher operating costs in Shetland for traders, saying the “total profitability of retail businesses in Shetland is higher than the remainder of Scotland”.

This, the letter added, meant that retail businesses in Shetland should be “more capable of withstanding limited adverse retail impact as a result of competition from other new rural retail businesses”.

The planning company used the Brae Co-op as an example, suggesting that the store has “supported consumer choice, competition and rural diversification” since opening in 2016.

The letter said most of the natural displacement resulting from the two new shops will occur within Lerwick – notably the existing Co-op and Tesco supermarkets – “and will shift new employment to the rural areas of Scalloway and Sandwick”.

It also said new shops in Sandwick and Scalloway will increase Co-op’s spend on local suppliers “significantly”.

“The benefits of the proposals need to be recognised,” Hargest Planning concluded. “The stores would provide significant new rural employment and support the diversification of the local rural economies in these areas.

“They will also enhance choice for local consumers in areas where, at present, this choice is limited and, as a result of this, the proposals will enhance choice for local consumers in areas where, at present, this choice is limited and, as a result of this the proposals will enhance accessibility to local services and employment opportunities for residents living within these areas.”