Tesco Stores Limited, R (on the application of) v Stockport Metropolitan Borough Council & Anor

This was a supermarket planning dispute with a very practical point behind it. Lidl wanted permission for a new food store in Heaton Norris, Stockport. Tesco objected and later challenged the permission in court.

The proposed Lidl site was outside any designated town centre. That meant it was out-of-centre retail development, so the council had to apply the retail sequential test in national planning policy.

The basic idea of the sequential test is town centre first. Main town centre uses should go into town centres if suitable sites are available there. If not, edge-of-centre sites are considered. Only if suitable central sites are not available, or are not expected to become available within a reasonable period, should out-of-centre sites be considered.

Tesco argued that Lidl should not be allowed to proceed because there were more central alternatives. The council looked at several sites and focused particularly on two. One was Unit 4B at the Peel Centre. The other was land at Water Street.

The important point is that the council accepted both of those sites could accommodate food stores similar in format and scale to Lidl’s proposal. So the main fight was not really about physical suitability. It was about whether those sites were still available by the time the council made its decision.

By then, the commercial position had changed. The owners of Unit 4B were in negotiations with a proposed occupier intending to open a food store there. The Water Street site was already subject to a legally binding agreement with Aldi, which intended to occupy that site as a food store if planning permission was granted.

The planning officer concluded that neither site should be treated as available for Lidl’s proposed development. The committee resolved to approve Lidl’s scheme on 17 October 2022, and planning permission was granted on 9 November 2022.

Tesco brought judicial review proceedings. It lost in the Planning Court and then appealed to the Court of Appeal. Permission to appeal was granted only on one issue: whether the council had misunderstood the meaning of "available" in the sequential test.

The legal issue was narrow but commercially important. Tesco said the council had interpreted the sequential test wrongly.

Tesco’s argument was that a site can still be "available" for the sequential test even if another person controls it, or another retailer is lined up to occupy it, so long as the site is available for the type of retail development proposed. On that approach, the Peel Centre and Water Street sites should still have counted against Lidl’s out-of-centre proposal.

Tesco relied heavily on earlier case law warning that the sequential test must not be distorted by the preferences or commercial attitudes of a particular retailer. That principle remains important. A retailer cannot usually say a central site should be ignored just because it does not suit its own trading model or competitive position.

The council and Lidl argued for a more fact-sensitive approach. They said availability is judged when the planning decision is made, not frozen at the date of the application or the date objections were lodged. If a site has effectively been taken up, committed, or is off the market in commercial reality, the council may be entitled to treat it as unavailable.

The Court of Appeal therefore had to separate two different questions. First, what does the policy mean as a matter of law? Secondly, once the policy is interpreted correctly, did the council lawfully apply it to the facts before it?

The court stressed that this distinction matters. Judges interpret planning policy. Councils apply it to the facts using planning judgment, subject to public law review.

The Court of Appeal dismissed Tesco’s appeal.

It held that the council had not misunderstood paragraph 87 of the July 2021 National Planning Policy Framework. The court said the policy uses ordinary language. Words such as "suitable" and "available" should generally be given their ordinary meaning in context, without adding a technical gloss.

The court also made clear that suitability and availability are different concepts. A site may be suitable but not available. Equally, a site may be available but not suitable. Both questions involve fact and judgment.

The timing point was central. The court said availability must be assessed when the planning decision is made, not at some earlier fixed date. The policy itself recognises that circumstances can change while an application is live, because it refers to sites that are expected to become available within a reasonable period.

That means councils can, and often must, look at the up-to-date commercial position. A site can become available or cease to be available between application and determination. The policy is flexible, not prescriptive.

The court rejected the idea that a site remains available until a new store is fully built and trading. It said the policy does not require a council to withhold permission for an out-of-centre site until that stage has been reached.

Applying that approach here, the court held that the council could reasonably conclude that neither Unit 4B nor Water Street was available by the time Lidl’s application was decided. Unit 4B was the subject of active legal negotiations. Water Street was already subject to a legally binding agreement with Aldi. On those facts, the sites could properly be seen as committed for retail use and not truly alternative sites for Lidl’s proposal.

The court also accepted the council’s point that this was not a case where Lidl’s identity or preferences had shaped the result. The officer had been careful to disregard the identity of the applicant. The conclusion was based on the sites being effectively taken up, not on Lidl saying it did not want them.

The judgment also explained how the sequential test fits with the separate retail impact assessment. Even if more central sites are no longer available because they are being taken up by other retailers, the council must still consider whether another out-of-centre store would cause significant adverse impact on town-centre vitality, viability or investment.

In this case, the officer had considered cumulative impact, including the Peel Centre and Water Street commitments, and concluded that significant adverse impact was unlikely. That part of the planning assessment was not successfully challenged.

The judgment is especially useful because it shows the kinds of evidence that can matter in a retail planning dispute.

For Unit 4B at the Peel Centre, the officer relied on information that the owners were in "legals" with another food operator. The applicant said the deal was moving forward and both parties had instructed solicitors. The council’s retail planning adviser then discussed the position with Peel to verify the statement. The site owners confirmed that they were in legals with another food operator for the unit.

For Water Street, the officer relied on Aldi’s letter stating that it had reached a deal in principle with the landowner and had entered into a legally binding agreement for occupation of the proposed food store. The officer treated that as evidence that, if planning permission was granted, Aldi would occupy the store and the site could no longer be considered available for Lidl’s proposed development.

The court treated these facts as enough to support the council’s planning judgment that the sites had been taken up and were not truly available for additional retail development of the kind proposed by Lidl.

For businesses, the practical point is not that every negotiation will be decisive. It is that councils may place real weight on verified evidence showing where a site sits on the spectrum from open market opportunity to committed occupation.

This is also a reminder that planning arguments are often won or lost on the quality of the paper trail. A bare assertion that a site is tied up may not carry much weight. Confirmation from the landowner, evidence that solicitors are instructed, or a binding agreement can be much more persuasive.

For business owners, this case is really about evidence, timing and commercial reality.

If you are promoting a retail scheme, objecting to a competitor’s application, or negotiating for a central site, the planning result may turn on what can be proved about site availability on the day the council decides the application. An early sequential assessment may not be enough if the market position changes before committee.

The decision does not let applicants bypass central sites simply because they prefer another location or because a different format suits their trading model better. The court repeated that the sequential test is not driven by one retailer’s identity or preferences. That remains an important limit.

But the case does recognise that planning decisions should reflect the market as it actually stands. If a central or edge-of-centre site is already tied up in serious legal negotiations, or subject to a binding arrangement for another food store, a council may be able to treat it as unavailable.

That can materially change the planning position for an out-of-centre proposal. It also means planning and property workstreams cannot be treated as separate. A live deal on an alternative site may affect whether another scheme passes the sequential test.

The judgment is especially useful for businesses because it shows the difference between a site that is merely theoretically suitable and a site that is genuinely open in commercial reality. Those are not always the same thing.

It also shows the limits of relying on older authority without looking closely at the facts. The court distinguished earlier comments about availability because this case was not about a retailer trying to avoid a site for its own commercial reasons. It was about whether the sites were, in reality, still open to anyone else at all.

If your business is involved in a retail planning application, use this case as a reminder that the sequential test is a live evidence exercise, not a one-off report.

Availability can change while an application is being processed. Councils may rely on the latest verified position. That means your planning team, property team and commercial team should stay aligned throughout the application timetable.

If you are promoting an out-of-centre store, you may need current evidence showing why more central sites are not available by the decision date. If you are objecting to a rival scheme, you may need to show that an alternative site remains genuinely open and has not moved into binding commitment or advanced legal negotiations.

Stale evidence is risky on either side. A site that looked open months earlier may no longer be open when the committee meets. Equally, a site that appears tied up may still need careful evidence before a council can lawfully treat it as unavailable.

Do not forget the separate impact assessment either. Even if the sequential test is passed because central sites are being taken up by other retailers, the council still has to consider whether another store elsewhere would cause significant adverse impact on town-centre vitality, viability or investment.

In practice, businesses should think about planning strategy and deal strategy together. A commitment on one site can affect the planning prospects of another. That is true whether you are the applicant, an objector, a landowner or a competing operator.

The Court of Appeal gave judgment on 9 May 2025 and dismissed Tesco’s appeal. The appeal had been heard on 18 February 2025.

The court was considering the July 2021 version of the National Planning Policy Framework, particularly paragraph 87. The judgment notes that the same policy wording appears in the December 2024 version of the framework at a later paragraph number.

That means the case is not just about a past wording that has disappeared. Its discussion of how to read "available" remains relevant to the current national policy wording referred to by the court.

The decision also sits alongside local development plan policies. In this case, similar policy appeared in Stockport’s Unitary Development Plan and Core Strategy, and the court treated the national and local policy context together when looking at the council’s reasoning.