Markets matter: reviewing the evidence and detecting the market effect

Ongoing public demand for the markets format is amply evidenced by the growth of Farmers’ Markets yet there has also been a steady fall in the number of traders operating from traditional retail markets (Department for Business, Innovation and Skills, 2011). A survey by the Retail Markets Alliance in 2012 found that 26% of all markets were seeing a decrease in performance against 28% seeing an increase. Almost one third of indoor markets reported a decrease in performance . This suggests that the older format still suffers from certain structural weaknesses that need to be addressed. Indeed, we find that the challenge to markets is manifold. Commentators have identified competition from supermarkets and discounters, higher customer expectations of their shopping experience, misguided town planning decisions (which often led to the relocation of a market to a far poorer spot), neglect by local authorities, lack of investment and poor state of market buildings and structures, technology changes, slowness of the industry to respond and the lack of new traders (Gonzalez and Waley 2013; Retail Markets Alliance, 2009; NABMA/NMTF 2014). Added to this is the relative paucity of research and knowledge about markets in the UK despite efforts in recent years by the industry to start addressing this.

There is a desire by the markets industry to ‘meet the challenge of change’ and both sides of the industry in the UK have come together to work on a Mission for Markets (NABMA/NMTF 2014). At the request of NABMA, the Institute of Place Management has undertaken research to identify the role of markets and their contribution to the local economy.

First, a literature review has been undertaken to provide historical information and evidence.  Second, we have augmented this with a study of UK footfall supplied by Springboard.  The ability to attract footfall to a location is a key indicator of vitality, so testing for a market effect, establishing the contribution of individual markets to locations’ overall footfall patterns, profiles and performance will demonstrate the contribution of markets to a centre’s vitality and longer-term economic viability. Finally, by using our recent findings from our Economic and Social Research Council funded High Street UK2020 project, we have discussed how markets contribute to their local economy and catchment.

The literature review provides convincing evidence that markets matter, both economically, socially and politically. As the longest-standing retail assets in many locations, their contribution may be somewhat overlooked, especially if they are not being managed in a way that enables them to reach their full trading potential.  Allowing markets to decline is never a smart move for a town centre, as they act as a visual barometer of the vitality and viability of a location. They are also a useful proxy of the state of the relationships between town centre stakeholders.  If market traders are not cooperating with each other, or the Local Authority is not cooperating with its market, or fixed retailers are hostile to the market, then it is likely that ALL networks and partnerships in that location are weak and/or dysfunctional, making it impossible to coordinate the type of change that is necessary to stay relevant to the 21st century catchment.

Our research also presents the strongest evidence to date of a market effect.  The operation of a market significantly increases footfall on each of the homogenous shopping days (Monday, Tuesday, Wednesday and Thursday) by between 15% to 27%, compared to footfall in locations without markets, on the same days (see Figure 9).  In addition, operating an open market has a significant impact on footfall in 7 of the 12 locations we investigated. 

 Photo Credit : Wellington Market (Phillip C)