DIY stores oppose new superstore cap

THE Irish Hardware and Building Materials Association (IHBMA) has rejected the need for changes to the cap on retail warehousing.

The IHBMA said there was no competitive, economic, or social justification for changing the retail warehouse cap, as it applies to hardware and DIY outlets.

Woodies, part of the association, joined in condemning the premature review of the guidelines, initiated just two years after it was put in place. The guidelines were not due to be reviewed for another three years.

Woodies has been expanding rapidly in Dublin and across the country, and a spokeswoman for the company said the restrictions introduced two years ago set the ground rules. Any move to change them three years ahead of the planned review date was unacceptable, she said.

Changes at this interim stage would also be totally anti-competitive for those who planned their business strategies based on the existing guidelines, she said.

Jim Goulding, secretary general of the IHBMA, said in its submission: “Since the guidelines were introduced in 2001 we have seen increased competition, increased employment, low inflation, and a major increase in retail warehouse developments in a pattern consistent with the National Spatial Strategy.”

The pressure for the review from Swedish furniture group Ikea, and other outside interests is being responded to for all the wrong reasons, he said. “It would be a grave mistake to make ad-hoc changes now, to suit the vested interests of one or two shed operators,” said Mr Goulding.

Outside of these demands there has been no change in the structure of the market, or the size of stores, to merit changing the current guidelines, he said.

“The average size of retail warehouse units being developed by major retail warehouse operators is a full 2,000 sq.m less than the current maximum size allowed of 6,000 sq.m.

"So there is significant room for growth and development by new entrants, and multiple players, currently operating within the State under the existing retail guidelines.”

While the mid-1990s saw rapid increases in expenditure of over 14%, in 2002 there was actually a reduced spend of -0.5%. The supposed pent-up consumer demand predicted when the guidelines were introduced does not exist, and must be taken into account, he said.