Large-scale retail planning: 2001, space odyssey

Luis E. Arribas

AME Institute, University of Amsterdam

To be presented at IsoCaRP Congress, Sept. 2001


The balance between the theory of planning spatial functions and the dynamics of social institutions is rapidly changing. The complexity of property-rights based relations between the state and market obliges us, as planners, to understand the fact of spatial expansion as socially embedded arrangements of institutions, rather than market and pure scale and location principles.

Retailers are pressing hard onto the space, and customers perceive themselves in turmoil of mobility and format changes. But, although large-scale retailing has evolved as an intensive space-consuming mode of capital accumulation, is this ever-changing panorama giving trends on the distribution of new retail nodes?

The purpose of this paper, which I present as part of my PhD research, is to analyse (a) if there are new dimensions of large-scale retailing in sight, and (b) if a new retail revolution can transform the uses of space. Complementary to this, (c) we will evaluate if planning has a reaction capacity to assimilate the supposed spatial consequences of these changes. French retailers and planning regulation will serve as a case study future projection: intervention over the distribution economy is not discussed, and retail regulation is designed using the parameters of fundamental Laws of retail development control. These rules tried to balance the tensions between both small-versus large-scale retailers, and downtown versus out-of-town developments. Therefore, the feeling that France has a directive planning system, placing the urban pieces where planning says, has to be tested in order to understand the whole retail development process.



Are there new dimensions of large-scale retailing in sight? There seems to be evidence of a new step in the evolution of retail formulas. From the basic box of food and convenience goods (basically hypermarkets and supermarkets) or specialised non-food (furniture, DIY, gardening, habitat or toy stores), retail parks and leisure containers have overtaken real estate retail investments. Factory outlets and category killers are, among others, the new ‘disturbing factors’ for urban planners, retailers and, therefore, legislators.

As an example, the 80% of the total French supermarket openings in 1994 (331 of 404) were magasins de maxidiscompte or hard discounters. All along our peripheries, those old-fashioned superstores have also been made-up with new boards and brands. Dawson (2000) affirms that substantive changes have been made. Quoting Davies (1998), he supports the evolutionary view of retailing development. It is not a new industry, resulting from a continuous process of structural change and adjustment. But it is in rapid structural transformation (Dawson, 2000: 119). Currently, e-commerce takes off fast, while international firms spread the large-scale formula all over the continent.

2001: any spatial odyssey at all?

Which shapes for those new tendencies? Hypermarkets’ last generation is in deep transformation towards a multiplex store. Cliquet (2000) suggests a natural maturity and saturation process of retail market. Actually, looking to the number of outlets opened from 1986 to 1998 in France (respectively, from 62 to 3), there appear signs of deceleration in the hypermarket’s home territory. Galinier (2000) also talks about the ‘last giant store’, a 16.000 m2 Auchan hypermarket by Disneyland Paris, whereas Sommer (2000) points at the same time to the death of the old selling boxes and the birth of ‘hypermarkets of the third millennium’. Nevertheless, hypermarkets still succeed as a winning formula all over the world. The new Carrefour opens stores in Japan, Rio de Janeiro and is, by 2001, the world’s second retailer (4,000 stores in France and 9,000 worldwide); Wal-Mart looks for further expansion within Europe, and clashes with German discounters and supermarkets; and Ahold moves ahead and invests into Spain hypermarkets. Anyway, the formula is still popular. In 1962, 5,000 French consumers stormed the walls at the opening of the first hypermarket in Sainte-Genevieve-des-Bois, compulsively attracted by a retail format revolution in a spring Saturday. In December 2000, more than 10,000 enthusiast Japanese packed cashiers and parking lots, whereas Carrefour opened its 7th store in Warsaw-Bermowo, with 11,500 m2 of selling space.

Retail parks, most of which incorporate factory outlets, have also emerged in city peripheries. As Guy points out (2000), these clusters of retail stores organise a variety of retail activities, including –in the case of UK- stalwarts of the high street. However, they are still dominated by bulky goods retailers. Although, to some extent, they have become respectable in property circles and have attracted extensive institutional investment, the reaction from planning is still on the early stages. As we will immediately analyse, scale regulation is the only pattern used to control the expansion of those newcomers of the current periphery. This applies for a broad range of stores, from hypermarkets to specialised stores and discounters, and will show some of the deficiencies of the last years of tensions between the ‘market growth’ and the ‘planned growth’. Parks also incorporate the leisure attempt, an effort to mix functions and convert shopping the trip into a whole day-out. Cinemas, restaurants, banks, follow in Europe the evolution of American shopping malls (Frieden & Sagalyn, 1994)

E-commerce is, certainly, the last and most important conceptual change of the last years. As Dawson says, “demand chains are becoming more efficient as new ways are implemented to add value to chains” (2000: 120). Chains and efficiency can be definitively distorted if e-commerce develops its uncertainties. What will be the profitable areas of e-commerce? Dawson argues that e-retail is one of the great unknowns over the next years, and it will briefly show whether or not it competes in satisfying consumer markets (2000: 136).

This point has consequences in the way that planning must organise space for both the distribution channels and warehousing. Some of the newest retail formulas require bigger distribution channels than others do. Parking facilities and access to supplies are therefore different at e-retail level than at hypermarkets. Nevertheless, if we attend to the definition of distribution channels given by Casares & Rebollo, they are “the group of economic agents, institutions and spaces through which services and goods flow towards the consumer”  (1996: 32). This indicates that planning should not solely place its focus in spatial considerations. Both institutions and actors are equally part of future design of channels and analysis. As we will see, this approach has been frequently forgotten.

What consequences? And what reaction?

However, we need to consider if these forms of mass consumption will need new specificities at spatial level, or if current planning may host them. We can search one of the cases that produced more systematized data and planning practice along the last 30 years. Are changes associated to these format evolutions? If so, can planning react and assimilate the expected spatial consequences of these changes? Following Guy (1998), the ontology of retail planning policies follows a rationale: It can improve efficiency of retail market even when it seems saturated already; second, to control land-use externalities; and, third, to protect part of the socially affected distribution and production sectors. Let us go and check it over the French example, typical as a highly developed consumption society, which also had a developed planning tradition behind.

Hypermarkets (stores over 2,500 m2) grew in France from 1 to 500 in less than 16 years (from 1963 to 1979). Most of them rested along the main roads that connected the banlieues, the massive neighbourhoods that shaped housing development in the 1960s and 1970s. Their size also increased to an average of 23,000 m2 in the late 1970s. Eventually, figures for large formats have given some signs of process stagnation and merging movements started within retailer’s side (Chetochine 1998; Cliquet 2000; Villermet 1999). There were 1,142 hypermarkets in 2000 of which 1,022 already were working in 1991. But, although some tranquillity is reached in the process of hypermarket development, factory outlets and category killers are the new ‘disturbing factors’ for urban planners, retailers and, therefore, legislators. Whatever the label used, such space consumption always seems to go well beyond planning reaction.

XXI century retail machinery is strong enough to balance or defeat evenness of city spaces and social-economic relationship. A handful of shopping centres can well make hundreds of traditional shops to disappear from downtown. Carrefour is now able to force into bankruptcy entire transportation companies if negotiations do not reach their always cost-cutting premises (Jacquiau 2000; Chetochine 1998). The beginning of hypermarket development already displayed which type of powerful actors were to come. Future giant retailer E. Leclerc wrote in 1959 a marvellous statement of the forthcoming retail strategy. Believing that “economics dominate politics” while he maintains his refusal to any political objective, he asked the president of French State Council for intensive but discrete (dans l’ombre [1] ) help against the producers’ anger.

“Lots of unsatisfied industrials encourage aborting my action through humiliations of all type” […] “I want to have the certainty that my retailers will be obliged with the same conditions than the others” (Leclerc, E. (1958) Ma vie pour un combat, quoted in Chetochine 1998: 31-33)

This underlying set of capital and societal institutions convinces me, therefore, to use Boyer’s look to urban development as a result of space consumption by regulated or deregulated accumulation processes, filtered by a huge range of social underlying rules, instead of the mere game between the interests of actors involved in a particular development.

Ultimately, French planning authorities reacted. Their retail regulation started with the fundamental 1973 Royer Law (Metton 1995; Tanguy 1988, 1996). This well-known regulation set basic a shop-size limit at certain level [2] for all new developments. A system of “commissions for commercial planning” was convened to evaluate applications for all proposals for shops exceeding this limit. The law thus sought to balance tensions between small versus large retailers, and in-town versus out-of-town developments. Compared with other models like the Dutch, where location guided planning strategies, retail planning operated through the control of store size. This law tried to balance the tensions between both French small- versus large-scale retailers, and in-town and out-of-town developments.

The impact was seen in several fields: at spatial level, on some parts of the cities (especially downtown traditional shopping areas); in terms of employment, it generated a crisis which resulted in violent riots from the small shopkeepers in 1973. The conflict between city centres and peripheral big-box retailing prompted a reform in 1996 — the so-called Loi Sapin. This attempted to correct the unfair competition posed by hypermarkets over small retailers. It also intervened in retail employment and to promote the “equilibrium of shopping spaces over the territory.” Eventually overlapping competition law and basic principles of rights of entrepreneurs, once again the French state was compelled to intervene in retail economics. The limit over which permission had to be approved was reduced to 300 m2. Concomitant to this was the establishment of a new commission at the national level, and a modification of the number of representatives in the former commissions.

Did retail planning alter anything in space? To start with, there were several problems with the implementation of planning. In fact, the number of permissions for hypermarket did not decrease after 1973 and permissions for approximately 500,000 m2 of hypermarket floor space were given every year from 1973 to 1986 (Metton, 1995). One of the reasons for this failure is that the size limit could be easily circumvented both legally (slightly smaller formats were exempt from the licensing requirement) or illegally (not applying for a license is an easy way to avoid rejection). Part of the reason for the failure is the erosion of political will. The inflationist environment of the 1980s had made the French central government sympathetic to the hypermarket formula as a tool to check inflation. Moreover, municipalities were anxious to harness these new sources of employment and income (taxes from commercial activity went directly to the town in which they were established). Finally, consumers had no initial complaints as hypermarkets offered competitive prices. Despite these considerations, the anti-hypermarket forces were still active, and called for additional measures to check the growth of hypermarkets across the French countryside.

Complementary to this, there were side effects to the specific retail planning control. Meny (1999: 39), Jacquiau (2000: 180) and others claim that the 1982 decentralization of the political system led to a period where personal influence at the local level and political fragmentation undermined attempts to control development. Small peripheral towns, enticed by easy development opportunities, embraced the hypermarket format and municipal representatives voted in the commissions for more and more outlets to be developed in their jurisdiction. The environment was another major warning sign: non-food specialized outlets and discounters under 1,000 m2 multiplied haphazardly along French roads (picture 1).

            Sometimes, the development of new retail stores had conducted to corrupted behaviour in the commissions giving permissions. This has been linked to the financial struggle of part of the French political class, especially to the way to get funds for political parties (Meny, 1992). Whether or not this belongs to a structural or deviated characteristic of the French political world, it partially inspires the intricate world of power and business at high level.

Can a new retail revolution transform the uses of space?

The use of space needs to consider, therefore, multiple variables. Indeed, retail development, as we have seen, crawls across spatial but also economic, social and political dimensions. If we see the essence of retailing as a three-dimensional model (figure 1) we can understand those complexities that planning has to deal with.


Figure 1. A draft idea of a ‘retail regime’

Figure 1 dismembers what I call a ‘specific retail regime’. Here, and put simply, I define it as a stable and patterned design of retail development, which triumphs as typical along a period of time.  It does not imply local coalition and power parameters, as they are known in urban regime theory. Which variables are the ones that define that retailing regime? Location (concentration or spread), scale (small- or large-scale) and nature (bigger or smaller product range) are these main parameters shaping that period which presents stable dynamics between the market and public forces. These 3 parameters form a specific retail formula, which suffers permanent pressures from the two spheres of power, the public and the private, making it vary until a major shift comes. This formula’s spatial pattern will change.

Pressures from both public and private sides (including self-regulatory pressures within both spheres) undermine the balance of power over time, supported politically, and adjust the regime through a process of regulation. These regulatory shifts might appear such as an intervention in the scale pattern (as we have seen in the French planning model), as location policies (e.g. The Netherlands), regulating opening hours (a recent and conflictive debate in Spain), or the requirement of specific licenses to operate with some types of goods concerning public health.

In the definition of two separate spheres, I do not place two opposing teams. There is a rather complex net of players in both spheres. The public side retains the tension between planning towards a central-local balance, and a decentralised system. But also the conflict between parts of the government tier which stand for pro-growth and control of market failure (usually, Economic affairs), and those supporting balanced equilibrium in the territory (Planning and Environment department). Evenly, the private side has to be analysed as the conflict between large- and small-scale retailers. But private relations also embrace the distribution act itself: the relationship between consumer and the production chain, through the retailer, in any of the variations.

Once a regime of retail development is established, there are changes in the use of space. They do not necessarily come as a change of space legislation, but as result of the interaction of private and public uses. Therefore, through the interaction of the underlying ‘rules of the game’ which frame the institutional body of that regime (see Figure 2). I group those rules of the game in three basic categories: institutions of the policy systems (legal and policy imperatives), market institutions (mechanisms that rule competition and powers between large-scale and traditional retailers), and rules of the political system (tied to the intergovernmental distribution of competencies, the cleanliness of procedures in the politics, etc.).

Figure 2. Dynamics of shifting retail regimes

Conclusions for planning

A fundamental final question is if planning appears to be the accurate dimension to host changes in retail format and, then, forward them back to the cities with a new and rational dress. This search must be done through considering the relative importance of some of the most assumed characteristics of retail structure and planning, such as entrepreneurial and revolutionary spirit of the market, the character of planning as an intervention to alter certain course of city’s events or, quoting a basic introduction written about the debate of planning theory, the ‘enduring question of public interest’ from the planner’s side (Campbell and Fainstein, 1996).

Planning has, in principle, the task to be the guarantor of the regulations demanded by market accumulation. Moreover, it is generally assumed that the consumption of city space and its outcomes (in our case, the last generation of large-scale outlets) can’t be sustained by the market system (Boyer 2000, Foglesong 1996, Harvey 1985, etc.), and needs some interaction from the ‘planning side’. If both planning and market reproduce capital as a social relation (as defined e.g. in Jessop 1990) through an ensemble of socially embedded institutions, does planning play the role of society opposed to the market growth? Does public-private separation appear as a necessary contention over cities or can actors mix themselves across both spheres?

The tools, as we have seen, vary from cases where spatial planning is the guiding principle and others looking towards the regulation of scale-distribution activities. The examples of lack of theoretical unanimity appear all over Europe. For instance, France and Spain have similar policy structures deriving from the same legal and urban planning corpuses, where urban planning works on land use but retail planning concentrates in size control and the solution of sector internal inequalities (small versus large-scale retailers). The Netherlands, instead, tries to avoid French mistakes via introducing a different institutional distribution of policy responsibilities within the public sphere (a regional level versus former national planning), always under the general submission to store location equilibrium (Arribas & Evers, 2001). Nevertheless, it has recently been proved that some of the retail location strategies simply do not exist as such (Hernandez et al, 2000).

The conclusions are threefold:

-         There are new forms of large-scale retailing in sight, driving new relationships between production and consumption. All those new formulas (e-commerce, retail parks, fun shopping) need further requirements in space.

-         Planning has tried to regulate retail development in several ways, not always succeeded, but it has been the necessary tool to establish some territorial equilibrium.

-         No planning policy will succeed unless all economic, political and design institutions will be taken into consideration.


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[1] French expression for both anonymity and obscurity. The piece of letter is relevant of the intense crossed underground relationship between political institutions and market behaviour in retail development and planning along three decades. Especially along 1970s and 80s, French politics benefited from retail planning operations in scandals of huge proportions (see in Tanguy 1996).

[2]   1,000 or 1,500 m2 depending that towns had more of less inhabitants.