Is NSW Planning System Contributing To Woolworths' Problems?

Recent concerns about the viability of Woolworths Limited roll out of their Masters hardware stores in NSW demonstrates the need for reform of out of date zoning rules, says the Urban Taskforce.

Urban Taskforce CEO Chris Johnson says, “Behind the current financial concerns affecting retail company Woolworths are planning issues that have limited where new retail outlets can be located.

“Victoria has a much more flexible approach to where retail outlets can be located and NSW needs to catch up with this approach to reflect the changing market trends.

“Due to the restrictive land use zones of the NSW planning system, there is an undersupply of appropriately zoned land to accommodate stores with a large floor plate, such as Masters. This is leading to a restriction on the location of outlets therefore reducing customer access. These restrictions are only leading to more car usage across metropolitan Sydney as customers have to travel longer distances to purchase goods.

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“The rollout of Masters stores throughout NSW has been significantly delayed as there are limited land use zones where bulky goods retailers or retailers requiring a large floor plate, such as Masters are permitted. Often, retailers like Masters are forced to pursue complex and lengthy rezoning processes, creating significant delays and investment uncertainty.

"The current NSW planning system has not adapted to accommodate innovative emerging business models such as Masters, whereas more flexible planning systems in Victoria and Western Australia have successfully allowed these retailers to enter the market, increasing competition and choice for consumers and encouraging investment and job creation in these states.”

Masters is a joint venture between US based home improvement retailer Lowes and Woolworths Limited. In 2011, Masters commenced a proposed roll out of 40-50 stores across NSW over the next five to ten years, representing an investment of approximately $1.25 billion in the NSW economy, and 17,000 construction and ongoing retail jobs. In a submission made to the failed NSW planning reforms in 2012, Woolworths stated ‘our property pipeline has fallen significantly behind. In NSW more than any other state, the planning system is presenting a significant obstacle to realising this investment’.