Store Size Cap – Ireland

Date: 8 Dec 2008 | posted in: Retail | 0 Facebooktwittergoogle_plusredditpinterestmail

In 1998, the Irish government enacted a temporary cap on the size of retail stores. The policy was made permanent in 2001. The law restricts stores in the Dublin area to 3,500 square meters (38,000 sq. ft.) and applies a 3,000 square meter (32,000 sq. ft.) limit to the rest of the country.

The policy also requires that retail stores be located in town centers. If no sites are available, and the development is deemed necessary by local authorities, then it may be located on the edge of the town center (defined as within “easy and convenient walking distance of the primary shopping are of the town centre”). Out-of-town retail developments are strongly discouraged.

The policy was issued by the Department of Environment, Heritage and Local Government. Its purpose is to foster sustainable development, maintain competition, ensure that retail outlets are readily accessible by public transit, and protect the viability of town centers.

The policy applies to grocery stores and “hypermarkets,” which, like U.S. supercenters, sell both food and general merchandise. Non-food warehouse stores, such as do-it-yourself home centers, are restricted to 6,000 square meters under existing law.

In preparing the policy, the government commissioned a study by Goodbody Economic Consultants, who concluded that “available evidence suggests that economies of scale are exhausted at a store size of approximately 2,000 [square meters].”

In 2005, Ireland’s Minister for the Environment, Heritage and Local Government announced that the cap on non-food retailers would be lifted in four sections of Dublin and in certain areas designated for urban renewal within the gateway towns of Athlone, Cork, Dundalk, Galway, Letterkenny, Limerick, Sligo, and Waterford. The cap on supermarkets and hypermarkets (stores, like Wal-Mart supercenters, that sell both groceries and non-food merchandise) remains in force. For more details, see “Irish Government Relaxes Big-Box Ban.”

In 2009, the department initiated a review of the Retail Planning Policy, noting, “Since the Guidelines came into force in 2001, Ireland has undergone considerable change in terms of economic and social development, particularly in relation to population expansion and settlement patterns.  Increased demand for retail outlets in existing and expanded towns and cities across the country, good planning and the need to reduce car dependency, and the need to ensure continued healthy competition in the retail sector are key considerations that will underpin the review.”

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.