The impact of a development on competing local businesses is generally not a material planning consideration. However, in certain specific circumstances — particularly out-of-centre retail and commercial development — policy does provide grounds for objection based on town centre impact.
The planning system takes no position on market competition between businesses. Whether a new shop, restaurant, or service will harm the trade of an existing nearby business is not something that local planning authorities can take into account when determining applications. This reflects the principle that planning decisions must be made in the public interest, not to protect incumbent businesses from competition.
If your objection is primarily that a new development will compete with your business, that objection will carry no weight. However, there are specific policy contexts in which commercial harm does become relevant.
National planning policy for town centres — NPPF 2024 Chapter 7 — requires that proposals for main town centre uses (retail, leisure, offices, entertainment) outside of defined town, district, local, or neighbourhood centres must demonstrate that they have considered sequentially preferable sites in or adjacent to existing centres. Where an out-of-centre proposal has not applied the sequential test correctly, or where a retail impact assessment is required and has not been provided, this is a valid objection ground.
Applications for large out-of-centre retail or leisure development must also pass an impact assessment demonstrating that they will not cause significant adverse impact on the vitality and viability of existing town centres. Where this assessment is absent or inadequate, an objection on town centre impact grounds is well-founded.
Beyond the sequential test, commercial impact can be material in limited other circumstances — for example, where a proposed development would physically harm the operation of an existing business by obstructing access, removing parking, or creating conditions that make the existing use unviable. These arguments engage planning considerations directly (access, parking, amenity) rather than competition per se.
Development that would reduce footfall or visibility to an existing business by, for example, obstructing a prominent commercial frontage, may engage policies on maintaining active frontages in town centres — a planning consideration distinct from market competition.
It is not a valid planning ground that a new business is the same type as an existing one, that the market is already saturated, or that the new business will undercut existing prices. These are commercial matters, not planning ones. The planning system will grant permission for a new business to compete with an existing one provided the proposal complies with planning policy in all other respects.
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