Councils battle spread of new supermarkets

The arrival of Aldi and Costco in the market and the ongoing battle between Coles and Woolworths have seen an increase in applications for new supermarkets as developers take advantage of the major players' desire to increase market share.

It has set off a spate of local stoushes as residents object to increases in traffic, noise and parking issues, and councils increasingly reject or scale back the proposals, setting the scene for protracted court battles.

''We're seeing a battle between Woolies and Coles to soak up as much demand as possible - with one following the other into an area to secure their market share,'' said Chris Shaw, the managing partner of development and planning specialist law firm Shaw, Reynolds, Bowen and Gerathy.

''And as industrial land changes to residential land with urban consolidation, the prime sites they're after are often in quite well-established suburbs, where you have to fit the development in with existing uses and existing communities.

''You're going to have conflicts over noise, traffic and zoning, and more of these matters are ending up in the Land and Environment Court. There is a lot of political pressure being put on councils to oppose the proposals.''

In the past 12 months, developers and councils have clashed over supermarket developments in Pennant Hills, Bankstown, Windsor, Ballina, Gosford and Wollongong, as well as over a string of proposals across the inner city.

The City of Sydney Council has received 15 proposals for new supermarkets in the past 12 months alone, six of which were either rejected or are still being assessed.

The council is facing its third Land and Environment Court challenge in six months from developers whose proposals have been rejected because of the tough zoning restrictions imposed in and around the suburb of Green Square.

It has been strongly criticised for refusing to allow supermarkets to be built anywhere but a few pockets of the new suburb - restrictions it claims are necessary to ensure balanced development. The Australian Retailers Association said that it supported the Australian Competition and Consumer Commissions' findings that council zonings and planning regimes could act as a barrier to new supermarkets, which in turn reduced downward pressure on grocery prices.

''[Having to appeal to the Land and Environment Court] is frustrating for our members,'' the executive director of the association's NSW Division, Russell Zimmerman, said.

''Competition is vital and needs to be supported.''

But the practice of clustering - where different supermarket chains compete within the same suburb - has drawn strong opposition from some local communities.

In Newport, Woolworths has proposed building what would be the eighth supermarket in a six-kilometre radius.

''In Mona Vale, Avalon, Newport and Warriewood, we've got or will soon have three Coles, four Woolies and an Aldi - why on earth do we need a new Woolies at Newport?'' the secretary of the Newport Resident's Association, Kyle Hill, said.

''We do not need another supermarket, particularly one that is completely out of proportion in terms of size and scale for the site they have chosen,'' he said.

Source: www.smh.com.au/national/councils-battle-spread-of-new-supermarkets-20090819-eqle.html