Market Q&A with Cllr Richard Beacham

Richard Beacham: Before we start, would it be O.K to explain the differing roles of a Councillor like me, and the people who work for the council?

SC: Yes.

RB: Thanks – it’s just to say that I firmly believe that councillors definitely shouldn’t get involved in the legal aspects of commercial property lettings at the council – that’s a role for a professional person who works for the council and I wouldn’t feel comfortable answering questions about arrangements for specific traders outside of what is already in the public domain.

As an elected councillor and Cabinet Member, I have tried to set some direction in the process. Our priorities as a Cabinet were: that we wanted as many of the existing traders to transfer over as possible, we wanted a fair and equitable application process, we wanted as many new traders to be from Cheshire West and Chester as possible, and we wanted a mixed panel of people, including a local independent person, to make the final decisions on applications. This vision for the process was based almost entirely on what I have picked up from residents and traders in conversations over recent years. So, the role of a councillor in this case has been to represent residents views in the design of a council process, if that makes sense.

SC: Given that many people expected that the old market would simply move into the new building, how will the new market differ ?

Well, like everyone else, I love Chester Market – I think it’s been a triumph for the city and we all obviously want to see as much of what has made it a success in the current building be in the new one too. I would say the success has come about as a result of some really passionate traders, a lot of really engaged customers who believe in the market and feel a sense of ownership over how brilliant it is, and finally as a result of a council that is prepared to put its hand in its pocket to fix issues in the building and be prepared to try new things like the food area and the alfresco area. We have also invested in our staff, and being a Market Manager is a tough job, ours is brilliant and of course won Market Manager of the year at a national awards recently. Those three things, the traders, the customers and the council all working together is what makes the market a success in my opinion, and that is what I want to see be the same in the new market.

Markets do change frequently so some things will be different. This is true of the current market too, where new traders have joined over the past few years – a new Seafood place opened just recently for example. Some people have also left for different reasons too. Over the years, the new market will undoubtedly change too, traders will come and go as fashions change and different people want a space to try new ideas.

What will certainly be different is the way in which we approach some of the issues that have arisen over recent years – the kind of unintended consequences of regenerating the market. For example introducing food traders has been a huge success, but because the market wasn’t built for this level of cooking we have had to deal with extraction issues, like the build-up of grease on things like your Lego display. The new market is purpose built so that traditional traders and hospitality businesses can co-exist in the same environment without the same kind of impact. Historically, things like who picks up the used plates, how do plates get back to the right stalls , how do we deal with opening hours when some traders want the market open late and others want to lock up and go home…all of these things that we have learnt through the process of growing the current market will be resolved in the new one. For example, as part of the rent, food retailers will be able to collect clean plates, bowls, cutlery and glasses from a shared pot wash area. A shared front of house team will clean down the tables, take used items for washing, clean them and re-provide them for traders as and when they need them. Things like this will make the new Market operate in a much more effective way. I have seen some negativity about the shared till systems too, but if you take a step back for a second and think about this logically, we are going to need to plan staffing around busy times and we are going to want to curate the market experience through the day so that is reflective of the reasons people are coming to the market. Being able to understand these things is paramount for modern market management. Hopefully, in time, people will come to see the Council’s approach as really innovative, but I understand why some might see the change as overwhelming or radical.

Actually, can I just add that only 35% of the stalls in the new market will be food and beverage operators. The rest will be other types of stalls, like butchers and bakers – maybe even a candle stick maker. The new Chester Market is not going to be like Altrincham market, which is all food, it is going to be a traditional market, with food – just like it is now.

SC: Local anger has been directed at the loss of several popular traders. Approx. 50% applied, what is it about the new market that made them chose not to apply? 

RB: It’s not for me to speculate why individual people have chosen to not apply for the new market. Speaking generally, some people are retiring , some people could have made the decision that the challenge of opening a new store after so many years of being in the current market simply isn’t for them – I have spoken to some of the traders I know personally, just to understand their reasons. I have the deepest respect for people who put themselves out there and have started a business, it must be equally hard to decide whether to move it, change it or end it. What I can say is that all the existing traders were encouraged to put in an application. 50% applied and out of those, 80% were successful. Of the ones that haven’t applied, the Markets Team are still working with some of these to see if there is a way we can support them further, and the Council also has a property team and a superb business support team should anyone from the market or anywhere else need this kind of support.

SC: People are also concerned at the loss of long standing businesses such as The Cheese Wedge, and newer members like Stile , all of whom have contributed to the award winning success of the market.  Has the council harmed people’s livelihoods, particularly new traders that joined with the understanding they would find a home in the new market?

RB: I was sad to see that Stile were moving out of the market, but I wish them all the best for their new venture. I think Watergate Street is absolutely amazing at the moment, the relaxing of alfresco licensing because of Covid has enlivened it – it’s a really great place to be and long may that continue. Having Stile there too really adds to this. Like others undoubtedly were, I was sad to read about them leaving and the reasons on social media, I don’t know the full details, but for Stile I can also see a real success story in all of this. Markets should be incubators for new businesses, providing a safe space for people to try their ideas and then when they’ve got their margins right and know their products are popular, when they know how to plan and budget for their product range, then I think people do take a leap like Stile have done. Stile is a trail-blazer in that respect – a true success story – and I wish them all the best of luck on Watergate street!

For Kevin (Cheese Wedge), he might not remember this, but he actually did the cheese for my wedding – it was lovely. I think he has really, really good products on his stall and is a really friendly face in the market. When I found out he hadn’t been successful, I spoke to the Markets Team to see if there was any more work we could do to support him in reapplying. My understanding is that there is now an ongoing discussion, but as I have said previously, I am not directly involved in specific letting arrangements because I don’t think there is a role for politicians in commercial negotiations.

SC: Have you harmed peoples livelihoods ?

RB: Sorry, I wasn’t trying to dodge that part of the question. That’s a tough question though. I guess all change is difficult, but the council has invested heavily in the current market, fitting extraction units, building the eating area, adding the alfresco area, re-doing the toilets, providing evening security, changing how we think about the roles of our staff – it’s a lot. At the moment, we still subsidise the general running costs too. We did all of this because we wanted to protect livelihoods, not harm them. A few years ago we will all remember when the market was in decline – then something happened. New traders entered, customers got behind it, and the council supported our staff, both professionally and with a budget to deliver change. It could have been that we simply said that it’s over, but we absolutely did not want to see that happen! We are a market borough, we manage markets across all of our market towns and Chester is no different from that. Instead we are investing in Chester’s market, so you could argue that we are protecting livelihoods, now and for the future generations of market traders. I hope most traders who have contacted me personally over the years have always felt like I have done my best to support them. I love the market and wouldn’t want to harm anyone’s livelihood.

Also, on the point about places being guaranteed in the market, I have asked about this and I am told there has never been anything written, like a contract, that guaranteed a place. With the implementation of new ideas like Foodie Friday, then Covid, plus challenges around toilets and opening hours, these past few years have been a bit of a rollercoaster for everyone involved, particularly traders and market staff, and in the course of all of these ups and downs I have no doubt that conversations will have been had about the new market and the future for different businesses. Like I say though, I have specifically asked the question to the markets team and they have told me there has never been a written agreement for an automatic place in the new market.

SC: At what stage did the council decide to operate its own bar ? Were drinks led businesses barred from application ?

RB: It has never been the intention of the council to run its own bar, we have lots of services that we do run, but selling beer is not a priority for the council. We have lots of things we must do, like looking after elderly and vulnerable people, taking care of children in care, working with schools, delivering regeneration programmes, keeping museums and libraries going, and dealing with all manner of problems caused by over a decade of underfunding from central government. So, whilst I can actually pull fairly decent pint, I can assure you that the bar will be run by a local independent operator. I would imagine the central bar will provide the majority of alcohol sales in the market, but there is scope for some traders to sell specialist alcoholic drinks if they complement the food offer. All traders can sell soft drinks if they wish.

SC: Were drinks led businesses barred from application?

RB: No, as I say all traders were encouraged to apply.

SC: Was it ever anticipated that there would be several bars or was the centralised bar always the plan ?

RB: It makes sense to have a central bar operationally, because it can be physically aligned with the front of house and some back of house services. This will keep tables clear and fresh plates, cutlery and glasses available for traders to use for their customers. If you have seen some of the recent designs, the central bar is a focal point as you walk in past the traditional market stalls. The team are still working with applicants on the number of bars there will be, there could be a smaller one too for example.

SC: Concerns have been expressed that the new market will be “chain led” . Can you allay the fears of a Trafford centre style food court?

RB: I will be very clear on this one. All the traders in Chester market will be independent and the vast majority will be local to Chester. There has never ever, ever, ever been any intention to have chains in there.

SC: So there won’t be a KFC ?

RB: No, and there is no McDonalds planned for Chester market either. On a serious note, Northgate as a development – the bits outside of the market – will have some recognisable restaurant brands in it. But we are also working hard to get independent, local businesses in this area too. We all recognise the massive growth in the number of independent eateries that is brightening up our city – its brilliant. Northgate Street is probably the best place in the world – a great mixture of businesses, passionate owners – it’s fantastic. This emergence of new and interesting independents is driving a whole new wave of interest for our visitor economy too. We want Chester to be a place where people come to experience interesting food in unique places. Obviously some people like to go to restaurants that they recognise so they know what to expect, that’s fine and totally up to them.  Personally, I like trying things that I can’t necessarily try anywhere else. The Northgate Development, will cater for those who know what they want and those who want to try something new – and those that will eat anything, like me!

SC: Two years ago traders asked how business rates were calculated for % revenue led models- were they calculated on square footage or on the % revenue. Why was this vital financial information withheld from applicants ?

RB: It is correct that we have been discussing a new revenue share rental model with traders for probably three years. However, the council does not set business rates, we just collect them on behalf of the Government, so actually I suspect we will have to wait until the Valuation Office has calculated the business rates before we could share specific information like this. So it’s not about withholding it, we just don’t have the information to give at this moment in time. The other complication is that different types of businesses have a different calculation, plus the market layout would need to be confirmed and possibly built before the Valuations Office can give us a figure.

SC: Will that have hindered traders applications if they didn’t have the information ?

RB: I hope not. I can understand why traders would want to know things like this as nobody likes an unknown quantity. I think maybe existing traders might have been able to make an estimate based on their rates in the current market – although I accept this might only be indicative. I also think the Markets Team tried to give people a bit of guidance on how they could estimate their rates to build into their business plans. Admittedly, this is not specific though. I hope people understand we have done the best we can with what information we have available.

SC: There are two rental models for the new market: fixed rent for retail traders  and  %r revenue for food traders.  If a benefit of the % revenue model is there is no barrier to fixed costs, why has this not been offered to retail traders and vice versa? Does the % model encourage high margin low quality offerings?

RB: Rents in Chester Market haven’t changed much since the days of Chester City Council in the early 2000’s.  Some of the newer traders are on flexible licences, some traders have proper tenancies and there is no consistency between different types of stall holders. In the new market, we want to rationalise this. If we take the percent of revenue or ‘the turnover model’ first and think back to what I was saying earlier about shared pot washing and front of house staff, then the more you sell, the more dirty dishes there will be, the more waste you will generate, the more staff time will be required to service your trade – therefore you pay a percentage share.  The other option would have been that all traders pay a service charge for shared staffing etc, but then this wouldn’t be a fair reflection on what a business might have used and it wouldn’t accommodate fluctuations in trade. I also think that for food traders, this makes the Council and the trader more like partners in making the market good, it’s a commitment from us that says ‘if you don’t get paid, then we don’t get paid’. In terms of low quality and high margins, it’s actually easier to budget for because you know that a certain percentage of every sale goes towards rent – it’s not like needing to sell a certain amount to pay your rent at the end of the month. The risk is basically a shared one.

If you don’t mind me saying so, I think the point about quality is a little offensive to be honest. Every market trader I have ever met is really proud of what they sell and the quality is a matter of significant personal importance to them. We all know that food and produce from independent businesses is generally better than from a supermarket for example.

For other types of traders, the non-food ones, their products are overwhelmingly likely to be consumed off site.  Their impact on the operational aspects of the market is vastly lower and therefore a standard letting arrangement that is based on a price per square meter seems more appropriate to me, but I am not an expert.

SC: If the intention is to provide a springboard for new businesses and novel ideas, why are places being given to traders with business plans that have the highest projected turnover ?

RB: Sorry but this simply is not true, we haven’t done that that. Applications were based on their trading history or their a business plan, also the applicants experience and their marketing plan – it wasn’t about how much money we could make from rent, it was about making the best experience we could create from the people that applied. Successful markets have to have a sustainable mix of traders that complement each other. This has to be curated and perhaps that’s one of the major benefits of the council being the landlord in the market, we can take different approach to a private provider who might only look for a financial return over social value, inclusivity, collaboration and experience.

SC: The Council’s annual budgeted income for the market hall was set at £1.15m. If 25 retail units are let at the maximum asking price that generates £353k, leaving a £797k gap and 11 food and beverage traders. If all the market income is rent then that would mean each trader would need to generate £72.4k rent. If this the expectation, if not how will you hit the £1.15m budget ?

RB: No, sorry that’s not strictly true either. Different traders will make different amounts of money and because of the turnover rent some will pay more and some would pay less. Like I said earlier though, the food and beverage operators can build their rent into each sale in a different way to how a high street business would have to consider rent as a fixed cost. The cost of running the market will also be determined by the turnover of traders and this will affect the budget. Our costs increase if their sales increase so the turnover and budget model is flexible to reflect this.

I mentioned this earlier, but we subsidise the current market and ideally the new one needs to cover its own costs. This means we can redirect the current subsidy to new regeneration projects or other service areas in the council. We are not here to ‘make a profit’ as I have seen proposed online.

The new rents were set using a benchmarking process across other similar markets around the country and the team positioned Chester’s rent structure in the middle of that range. The final rental revenue will only be known once all the market stalls are let and the tenant mix finalised.

SC: The council have stated they will support unsuccessful applicants/ non applicants . What is the package of support and when will it be offered to traders ?

RB: Every trader is different, I am not personally involved but I understand that we are currently supporting a number of traders with their future plans and anyone who wants assistance should contact the market manager in the usual way. In some cases when existing traders leases end, it will mean they are entitled to compensation so those discussions are ongoing too. As I said earlier, some people are still weighing up their options. As well as the market team we have a Business Support team at the council, Property Services team. The council is here to help anybody, not just market traders, anyone who wants to start a business.

SC: Why is tenant protection of the Landlords and Tenant act being removed from the new leases, and why are older traders being bought out of their leases ?

RB: We are required to close the old market when the new market opens, so in effect all leases in the old market will need to end. I would feel very uncomfortable if we weren’t offering compensation to people who have to give up their current lease.  ‘Bought out’ is not the right description – this isn’t like a take-over. This is about the council respecting people who had a legal right to be in the current market by offering them compensation because of the change.

It is totally true that the lease terms that have been offered in the new market are more flexible, but the world is very different now to how it was when the older style of leases were first issued – some of them over four decades ago. Even some high street landlords are moving to less rigid letting arrangements because of the nature of the economy and the way in which retail is changing. Most of the new traders that have come into the current market have been on more flexible leases and on the whole this has been a success, so the Market Team have learned from this.

SC: The panel of experts: are any of them from Chester and did they ever visit the market on Foodie fridays? How involved has the current market management been in the selection process ?

RB: There were local people on the panel, there were also non local members who were external advisors. Everyone on the panel had been to the market. The local business person provided an independent voice on the panel as they are not directly involved with the council or involved with the market commercially, but frequently attended Foodie Friday with their family. I wasn’t on the panel because I don’t think there’s a role for politicians in agreeing commercial deals between tenants and the council as a landlord, that’s why the Cabinet listened to feedback from residents and requested a local, independent person be added to the panel. The current market management was also obviously very involved in the process too.

The stuff on Twitter about “brown envelopes” being exchanged for a place in the market is depressing . Generally people run for elected office because they want to do good for their community, so I can assure you, anything I have ever collected in a brown paper bag from the market has had food in it, and I have paid for it myself.

SC: How are you going to ensure that the new market is attractive to the current  indie crowd AND the wider Chester community.

RB: The vision for the new market is entirely built on the values that have been expressed by the residents, traders and different groups of people that use and care about the current market in Chester. I think in essence, the market is at the heart of Chester, so we want the new market to be even better at being good for the planet, good for the people who live in our city, good for the businesses who trade in it and good for the community in terms of providing a space for events and activities that bring people together. The regeneration of the current market has been a triumph, and people are right to be nostalgic about that, there’s a great sense of pride about what has been achieved. While the new market will be different, I would ask people to keep an open mind. I would say, don’t judge it on what’s not in it, but what is in it.  The traders in the new market will still be local people, putting themselves out there and trying their ideas. They need our support as much as traders in all markets do.

I spoke before of the relationship between the council, the traders and the public – it’s like the Holy Trinity of a market’s success. It’s what creates the spirit of the place. We all have a role to play in carrying that spirit from one building to the next. I would hope that all of the people who have contributed to the success of the current market will be able to enter into the new market with an open mind, so we can all collectively do what we have done before and make it the best it possibly can be. Not just for us, but for people that come and visit our city too, so we can continue to have an award winning market in Chester, which we can talk about with pride, and share the experience of it with people who come from all over the world to see Chester’s history and beauty.

Thanks to Richard and all those that submitted questions