Estimating space requirements

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To make an estimate of the overall sales space requirement for a new or expanded market necessitates an assessment of potential throughput using the method described in Chapter 12.

Care should be taken to ensure that an over-provision of space is not made. This can occur either because the peak trade by-passes the wholesale market system, typically because it is sold directly to traders at field level, or because climatic conditions during the peak season would allow produce to be temporarily sold in the open air or under lightweight covers, thus making provision of any additional sales space unnecessary. Nevertheless, the use of the peak factors is critical to the design of much of the engineering infrastructure, which is described in Chapter 14.

Spatial characteristícs of existing markets. The best basis for making projections of space requirements for new or improved markets is to compare them to how existing markets operate. Table 13.1 summarises the characteristics of selected markets in countries at different stages of economic growth. The retail structures in these countries vary from the highly developed system of supermarkets and chainstores in the USA, to the dominance of small-scale retailers and hawkers in Thailand.

Table 13.1 Wholesale markets operating in countries at different stages of economic development (1971 data)

Source Mittendorf H.J. 1976. Planning of wholesale markets for perishable food Rome FAO

Table 13.2 Average turnover at European wholesale markets (tons/m²)

Source: World Union of Wholesale Markets. 1969. Manual on wholesale markets, The Hague, Netherlands, International Union of Local Authorities.

Table 13.2 shows the average area and wholesale market turnover values for a range of city sizes in Europe. Figure 28 illustrates these values plotted as a graph, demonstrating that there is a reasonable relationship between city size and turnover. Table 13.3 gives an analysis of markets in the Near East, compared to European markets and, as well as turnover by sales space, includes other indicators such as city size and the overall site area. Figure 29 and Table 13.4 gives a similar set of values for typical Brazilian wholesale markets, indicating rather lower turnovers per m² of sales area and site area than in Europe or the Near East.

As well as providing a basis for making detailed space projections the data in these tables can be used to make a preliminary assessment of overall land acquisition requirements for a new market site. The figures, however, have to be used with some caution as they are both a reflection of different social and cultural factors and of methods of management that may occur between developed and less-developed countries.

Table 13.3 Through-put analysis of Near East wholesale markets

Source: FAO (1989 data)/ World Union of Wholesale Markets op cit.
Note n.a - not applicable

Figure 29 Relationship between turnover market area and sales area (Brazil)

Table 13.4 Comparative analysis of typical Brazilian wholesale markets

Source: SINAC, 1978. Brazilia.

Checking the adequacy of existing markets. Demand and demographic projections, plus average turnover data, can be used to estimate the adequacy of an existing market site.

This can be illustrated by projections made as part of an FAO study of wholesale markets in Chiang Mai in Northern Thailand. The existing Muang Mai wholesale market was overcrowded and unable to expand. The opening in 1990 of a new market, with a sales area of 6,400 m², at Kamtieng on the edge of the city allowed adjustments to be made in the wholesaling pattern of Chiang Mai city. It was assumed, as part of an overall marketing strategy, that trade at Muang Mai might in the future be restricted to largely serving the inner city (averaging around 150 tons per day) and that the balance of the metropolitan area would be served by Kamtieng. The potential throughput at Kamtieng was projected as follows:

· Metropolitan population in year 2000, including allowance for tourists:
= say 750,000
· Annual consumption of fruits and vegetables in the year 2000:
= 750,000 x 200 kgs. per caput (maximum)
= 150,000 tons per annum or average of 420 tons per day
· Potential throughput at Kamtieng Market:
= 420 tons per day minus 150 tons per day (at Muang Mai)
= 270 tons per day or 97,000 tons per annum
· Potential turnover using the presently constructed market sheds:
= 97,000 tons per annum/6,400 m² = 15 tons per m²

The calculation confirmed that Kamtieng market would provide sufficient floorspace in the short to medium-term to accommodate a reasonable average turnover of 15 tons/m².

Calculation methods for estimating floorspace at new markets. Projecting floorspace for a new market is a more difficult problem than assessing the adequacy of an existing market. It is very hazardous to build up floorspace figures from a series of too-elaborate assumptions about the potential shares of throughput that various facilities might be expected to achieve at a market. Very reliable survey data is required for such an approach, specific to the culture and matching exactly the management conditions that will apply in the market.

A better approach is to work from the whole to the part, firstly calculating the overall sales space and then making adjustments for additional facilities. Two simple calculation methods can be adopted, which may be used in parallel to check the basic assumptions.

The first method (Method A in Table 13.6) is an approach based on commercial criteria using, as the main parameter, an optimum overall annual turnover per square metre of sales area, which should usually range from 10 - 25 metric tons, including an allowance for main circulation areas (display/buyers' walk and loading platforms). These turnover figures conform with the data contained in Tables 13.1 - 13.4 and would represent reasonable average values for fruit and vegetable markets.

The second calculation method (Method B) is an ergonomic approach based on the ideal space requirement for various activities. This method uses the net area required to accommodate the average daily sales for each of the main commodities, plus allowances for overall circulation and for daily fluctuations in space requirements. The factors used in the calculation method would vary depending on the methods of display and level of sophistication of the market, which might range from traders sitting on the floor with their produce heaped in front of them to the selling from samples of produce which is already packaged, with mechanical handling before and after sales.

Table 13.5 Typical daily space requirements: Japan and Korea (tons/m²)

Source NIKKEN SEKKEI, Osaka, Japan & FAO Project GCP/CPR/008/BEL

Some typical values of space used for storage and sales, that might be used in Method B. are shown in Table 13.5. The Japanese values represent nearly optimum use of space, whilst those from Korea could be used as design targets for a new wholesale market. If aggregate areas are built up on such a basis the values will need to be adjusted, by applying a percentage weighting factor, to make allowance for the mix of functions and extent of usage that will occur in a main sales areas. Not all the produce, for example, may go through the auction hall and the storage needs at wholesalers' premises may be lower than the turnover implies because loads are transferred directly between lorries. (More elaborate methods for estimating space needs are contained in a publication of the Korea Rural Economics Institute. 1981. Project proposals on the new Seoul agricultural wholesale market and the national marketing master plan. Seoul, Ministry of Agriculture and Fisheries).

Table 13.6 demonstrates the application of the two calculation methods using turnover projections made for a new export-oriented wholesale market for the province of Chiang Mai, Northern Thailand. There is a reasonable degree of agreement between the two estimating methods; some variation is inevitable given the fundamentally different basis on which the projections are made. The estimates provide a basis on which to design market buildings, a medium-term target might be 4,000m², with a longer-term aim of 6,000m².

Table 13.6 Sansai Market Centre, Thailand: sales space projections

Source :FAO Technical Report TCP/THA/8958

Table 13. 7 Sansai Market Centre, Thailand: space requirements

Source FAO Technical Report - TCP/THA/8958

Table 13.7 shows how the build up of commercial floorspace could occur during a 20-year project period using the projections shown in Table 13.6 and based on some simple assumptions about the space requirements for ancillary spaces. These assumptions were:

· wholesalers' permanent stores (including chill stores) outside the main sale area would be equivalent to 40 percent of commercial sales space;
· washing, packing and grading facilities at 1m² per ton of through-put;
· offices for private enterprise, market management and for basic support facilities (weighbridge, public toilets and site security), each at 5 percent of commercial sales space; and
· other offices (banking and credit facilities, market information system, marketing extension and cooperative outlet) at 10 percent of commercial sales space.

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