Retail Market Study Downtown Jackson, Michigan
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Retail Market Study Downtown Jackson, Michigan TABLE OF CONTENTS INTRODUCTION .................................................................................................................. 3 Executive Summary ............................................................................................................. 3 Background .......................................................................................................................... 4 Methodology ......................................................................................................................... 5 Trade Area ........................................................................................................................... 7 Demographic Characteristics ............................................................................................... 9 Tapestry Lifestyles ............................................................................................................... 10 Employment Base ................................................................................................................ 13 TRADE AREA CHARACTERISTICS ................................................................................... 16 Location ................................................................................................................................ 16 Access .................................................................................................................................. 17 Other Shopping Areas .......................................................................................................... 17 SUMMARY OF FINDINGS .................................................................................................... 19 2018 & 2023 Supportable Retail Table ................................................................................. 20 Retail Category Definitions ................................................................................................... 21 Shopping Center Definitions ................................................................................................. 24 Rationale ............................................................................................................................... 25 Limits of Study ....................................................................................................................... 25 APPENDIX ............................................................................................................................ 27 Exhibit A: Primary Trade Area Business Summary .............................................................. 27 Exhibit B: Primary Trade Area Community Profile ................................................................ 29 Exhibit C: Primary Trade Area Housing Profile .................................................................... 35 Exhibit D: Primary Trade Area Dominant Tapestry Map and Descriptions ........................... 37 INTRODUCTION W. Glick Hwy. Michigan Avenue S. Cooper Street 1st Street W. Franklin Street. Figure 1: Aerial photo of downtown Jackson. Downtown Jackson’s primary trade area can presently support an additional 108,400 sf of retail and restaurant development. Executive Summary This study finds that the downtown Jackson primary trade area can presently support up to 108,400 additional square feet (sf) of retail and restaurant development, generating almost $31.9 million in new sales. By 2023, income growth and continued economic development in the primary trade area could increase the estimated retail sales to just shy of $33.5 million. The demand could partially be absorbed by nearby businesses and/or with the opening of 35 to 50 new restaurants and stores. Additional development in downtown Jackson can provide needed goods and services for the existing surrounding consumer base of nearby residents, students, workers and visitors. Furthermore, bolstering the critical mass of retailers and restaurants downtown can increase the share of sales captured in the study area and improve the quality of life for the surrounding community. The leading categories of supportable retail growth are restaurants, grocery stores, apparel and shoe stores, department store merchandise, pharmacy and sporting goods. This study further finds that the downtown Jackson primary trade area has a population of 140,400 persons, increasing under current trends to 141,400 persons by 2023. Median household income in the primary trade area is $48,400, which is lower than state and national averages, and is expected to grow to $52,900 by 2023. Housing favors owner-occupied units, which comprise 61.8 percent of all housing, compared to 26.2 percent renter-occupied households; the vacancy rate is 12.0 percent. The primary trade area has a labor base of 70,800 employees. Downtown Jackson Market Study 3. Gibbs Planning Group, Inc. 12 January 2018 Table 1: 2018 Additional Supportable Retail Est. 2018 Est. 2018 Number Retail Category Supportable SF Retail Sales of Stores Retail Apparel Stores 9,300 sf $2,557,500 4-5 Beer, Wine & Liquor Stores 2,100 sf $640,500 1 Book & Music Stores 1,400 sf $315,000 1 Department Store Merchandise 11,600 sf $3,422,000 4-5 Florists 1,100 sf $236,500 1 Furniture Stores 2,100 sf $535,500 1 Grocery Stores 19,500 sf $6,337,500 1-2 Hardware Stores 1,700 sf $408,000 1 Home Furnishings Stores 3,400 sf $884,000 1-2 Jewelry Stores 1,900 sf $627,000 1 Lawn & Garden Supply Stores 800 sf $176,000 1 Miscellaneous Store Retailers 10,100 sf $2,575,500 4 – 6 Office Supplies & Gift Stores 1,400 sf $371,000 1 Pharmacy 6,000 sf $1,830,000 1-2 Shoe Stores 2,000 sf $560,000 1-2 Specialty Food Stores 3,100 sf $914,500 1-2 Sporting Goods & Hobby Stores 3,700 sf $925,000 1-2 Retailer Totals 81,200 sf $23,315,500 26-36 Restaurants Bars, Breweries & Pubs 5,200 sf $1,508,000 1-2 Full-Service Restaurants 7,900 sf $2,528,000 2-3 Limited-Service Restaurants 9,000 sf $2,970,000 3-4 Specialty Food Stores 5,100 sf $1,555,500 3-5 Restaurant Totals 27,200 sf $8,561,500 9-14 Retail & Restaurant Totals 108,400 sf $31,877,000 35-50 Table 1: The leading supportable retail categories are grocery stores, department store merchandise, and miscellaneous store retailers. Background Gibbs Planning Group, Inc. (GPG) has been retained by the Jackson Anchor Initiative to conduct a retail feasibility analysis as the first step in a comprehensive investigation of how to stimulate retail growth in downtown Jackson. GPG addressed the following issues in this study: • What is the existing and planned retail market in the study and trade area? • What is the primary trade area for downtown Jackson, Michigan? • What are the population, demographic and lifestyle characteristics in the primary trade area, currently and projected for 2023? • What is the current and projected growth for retail expenditures in the primary trade area, now and for the next five years? 4. Downtown Jackson Market Study Gibbs Planning Group, Inc. 12 January 2018 • How much additional retail square footage is supportable in the downtown Jackson’s primary trade area, Michigan study area, and what retail uses should be encouraged? What sales volumes can development achieve in or near the study area? Figure 2: Downtown Jackson is located approximately 35 miles south of Lansing and 35 miles west of Ann Arbor. Methodology To address the above issues, GPG defined a trade area that would serve the retail in the study area based on geographic and topographic considerations, traffic access/flow in the area, relative retail strengths and weaknesses of the competition, concentrations of daytime employment and the retail gravitation in the market, as well as our experience defining trade areas for similar markets. Population, consumer expenditure and demographic characteristics of trade area residents were collected by census tracts from the U.S. Bureau of the Census, U.S. Bureau of Labor Statistics and Esri (Environmental Systems Research Institute). Finally, based on the projected consumer expenditure capture (demand) in the primary trade area of the gross consumer expenditure by retail category, less the current existing retail sales (supply) by retail category, GPG projects the potential net consumer expenditure (gap) available to support existing and new development. The projected net consumer expenditure capture is based on household expenditure and demographic characteristics of the primary trade area, existing and planned retail competition, traffic and retail gravitational patterns and GPG’s qualitative assessment of downtown Jackson. Net potential captured consumer expenditure (gap) is equated to potential retail development square footage, with the help of retail sales per square foot data Downtown Jackson Market Study 5. Gibbs Planning Group, Inc. 12 January 2018 provided by Dollars and Cents of Shopping Centers (Urban Land Institute and International Council of Shopping Centers), qualitatively adjusted to fit the urbanism and demographics of the study area. Figure 3: Numerous retail stores and restaurants have recently opened in downtown Jackson, which has helped spur the area’s revitalization. For the purposes of this study, GPG has assumed the following: • Other major community retail centers may be planned or proposed, but only the existing retail is considered for this study. The quality of the existing retail trade in the study area is projected to remain constant. Gains in future average retail sales per sf reflect higher sales per sf in