TENNESSEE RETAIL ACADEMY PARTNERS
10% of overall Retail Sales are conducted Online
US Census Bureau Q4 2018 retail is not dying
it’s changing
The high level of confidence reflects a sturdy economic Consumer Confidence expansion in the U.S. that’s about to turn nine years old. Job openings are at a record high and unemployment is at a record low.”
18 Year High
The Conference Board Consumer Confidence Index® The Real Story Retail Decline
Plans for 2018 Retail Stores Decline
Rite Aid
Stripes C-Stores
Toys R Us
Mattress Firm
Best Buy
Radio Shack
The Bon Ton
Sears/Kmart
Signet Jewelers
Ascena Retail
Charming Charlie
Gymboree
Payless Shoesource
The Children’s Place
Orchard Supply
Perfumania Source: IHL Group, CompanyReports
• Many of these Retailers Have been Shrinking for a Decade • Outdated Business Models or Market Issues?
Source: Lee Holman & Greg Buzek, IHL Group, Beyond the “Retail Apocalypse” to a bright Future, August 2018 Retail Growth
Plans for 2018 Retail Store Count Growth
Walgreens
7-Eleven
Dollar General
Couche-Tard
Dollar Tree
O’ Reilly
Great Clips
Autozone
Fantastic Sam’s
Five Below
Ulta Beauty
Sherwin Williams
MINISO
Marathon Oil
Harbor Freight
Tractor Supply Source: IHL Group, CompanyReports
• Fastest Growing Retailers: Dollar, C-Stores, Beauty, and Specialty Hardgoods • What’s Growing Mirrors the Incomes of Consumers: • More Discounters • Less Mid-Range Luxury
Source: Lee Holman & Greg Buzek, IHL Group, Beyond the “Retail Apocalypse” to a bright Future, August 2018 Every 5 Hours in America a New Dollar Store Opens
Twitter: @BeasleyLacy [email protected] Retail is Growing
% Net Opening Stores vs Net Closing
Superstores/WH Clubs 17% 83 Bar / Restaurants 21% 68% % Convenience Stores 3% 85% For each company Specialty Softgoods 36% 40% closing stores Specialty Hardgoods 23% 49% 2.7 Fast Food 16% 54% are opening stores Mass Merchandisers 24% 44% Drug Stores 30% 34% Source: IHL Group, Company Reports Department Stores 36% 26% Food / Grocery 14% 34% % Banners Closing Stores % Banners Gaining Stores
Source: Lee Holman & Greg Buzek, IHL Group, Beyond the “Retail Apocalypse” to a bright Future, August 2018 $$$ Grocery or Restaurant $$$$ RESTAURANT
3.2%
Average Systemwide Sales Growth of Top 200 Chains
Source: Nations Restaurant News Source: Nations Restaurant News Restaurants
Source: Nations Restaurant News
Fast Casual Growing Brands Quick Service Restaurants QSR [Quick Service Brands] Growing Expanding Restaurant Brands in TENNESSEE
Twitter: @BeasleyLacy [email protected] 22 19 BRANDS OF FOCUS OPENED IN 41% OF RA COMMUNITIES
Why should a community invest in retail?
Goals
Challenges We surround your community with the resources and actions needed to create the desired results. Within the Retail Academy participant communities, the June 2017 – June 2018 economic impact has created
576 new jobs
$1.7M local tax revenue
$4.5M state tax revenue 889,319 Jobs Supported by Retail
78,608 Retail Establishments
$51.5 Billion in Total GDP Impact
Retail is 15% of National GDP
Source: National Retail Federation National Overview of Restaurant Trends QUIZ
LARGEST RESTAURANT CHAIN BY SYSTEMWIDE SALES? TOP 25 BY SYSTEMWIDE SALES Rank 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 StarbucksCoffee McDonald's Chain Popeyes Louisiana Kitchen Panda Express IHOP Chili's Grill & Bar Box Jackin the Queen Dairy Arby's Little CaesarsPizza Buffalo Wild Wings Olive Garden Grill & Bar Neighborhood Applebee's Chipotle Mexican Grill Drive Sonic KFC Pizza Hut PaneraBread Domino's Donuts Dunkin' Chick Wendy's BurgerKing Taco Bell Subway - fil - A - In (Millions) $ 3,036 $ 3,115 $ 3,148 $ 3,416 $ 3,468 $ 3,628 $ 3,634 $ 3,672 $ 3,751 $ 4,044 $ 4,117 $ 4,397 $ 4,408 $ 4,417 $ 5,511 $ 5,538 $ 5,925 $ 8,459 $ 8,965 $ 9,342 $ 9,624 $ 9,790 $ 10,800 $ 18,995 $ 37,639 $ Systemwide Sales QUIZ
LARGEST RESTAURANT CHAIN BY NUMBER OF LOCATIONS? Rank Chain Number of Units 1 Subway 25,908 2 McDonald's 14,036 3 Starbucks Coffee 13,932 4 Dunkin' Donuts 9,141 5 7-Eleven 7,963 6 Pizza Hut 7,522 7 Burger King 7,226 8 Taco Bell 6,446 9 Wendy's 5,769 10 Domino's 5,587 11 Circle K 4,463 12 Dairy Queen 4,413 13 Little Caesars Pizza 4,301 14 KFC 4,109 15 Sonic Drive-In 3,593 16 Papa John's Pizza 3,314 17 Arby's 3,283
18 Jimmy John's Gourmet Sandwiches 2,755 19 Baskin-Robbins 2,538 20 Chipotle Mexican Grill 2,363 21 Jack in the Box 2,250 22 Chick-fil-A 2,234
23 Popeyes Louisiana Kitchen 2,201 TOP 25 BY 25 TOP NUMBER OF UNITS OF NUMBER 24 Casey's General Store 2,041 25 Panda Express 2,011 QUIZ
LARGEST RESTAURANT CHAIN BY AVERAGE SALES PER UNIT? Average Annual Chain Sales Per Unit (000) Del Frisco’s Double Eagle Steak House $ 14,136 Mastro's Steakhouse/Ocean Club $ 13,871 Dave & Buster's $ 11,599 The Cheesecake Factory $ 10,496 Rainforest Cafe $ 9,454 Cooper's Hawk Winery & Restaurant $ 8,793 Portillo's $ 8,763 Yard House $ 8,232 Maggiano's Little Italy $ 7,977 Bubba Gump Shrimp Co. $ 7,807 The Capital Grille $ 7,793 Fogo de Chão $ 7,655 Legal Sea Foods $ 6,926 Bahama Breeze $ 6,224 Seasons 52 $ 6,015 BJ’s Restaurant & Brewhouse $ 5,374 Ruth's Chris Steak House $ 5,264 Miller's Ale House $ 4,986 Texas Roadhouse $ 4,972 Saltgrass Steak House $ 4,876 Olive Garden $ 4,789 Hard Rock Cafe $ 4,578 Cracker Barrel Old Country Store $ 4,555
ANNUAL SALES PER UNIT PER SALES ANNUAL Cheddar's Scratch Kitchen $ 4,407 TOP 25 BY 25 TOP Fleming's Prime Steakhouse & Wine Bar $ 4,380 TOP 15 BY % OF UNIT GROWTH Rank 15 14 13 12 11 10 8 7 6 5 4 3 2 1 9 FogoChão de TropicalCafeSmoothie CafeRioMexican Grill Cane’sRaising Chicken Fingers Freddy's Frozen Custard& Steakburgers Zoës & RestaurantHawkWinery Cooper's Burger HabitThe Grill FirstWatch Pret Black Diner Bear Fuzzy’sTaco Shop Blaze Fast Shake Shack PizzaMOD Chain a Manger Kitchen - Fire'd Pizza # Units 465 250 177 166 142 140 105 29 87 20 65 74 86 49 92 % Increase% 16% 16% 16% 17% 19% 19% 20% 21% 21% 22% 23% 25% 37% 41% 59% Growth Leaders
37 Growth Leaders
38 TOP 15 BY 15 brands units new2,879 # OF UNIT GROWTH Rank 15 14 13 12 11 10 8 7 6 5 4 3 2 1 9 StarbucksCoffee Chain TropicalCafeSmoothie Marco's Pizza Wingstop JimmyGourmet Sandwiches John's PizzaMOD PandaExpress PopeyesKitchen Louisiana Chick Jersey Mike's Subs MexicanChipotle Grill TacoBell CircleK Domino's Donuts Dunkin' - fil - A # New Units 105 108 110 118 134 149 156 165 168 192 216 313 760 88 97 15-30 BY 15 brands units 826 new # OF UNIT GROWTH Rank 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 Firehouse Subs Chain Wawa FirstWatch Panera Bread Freddy's Frozen Custard& Steakburgers Cinnabon Arby's Bojangles' FamousChicken Biscuits 'n Cane’sRaising Chicken Fingers 7 Zaxby's Casey's GeneralStore Blaze Fast Burger King King Smoothie - Eleven - Fire'd Pizza # New Units 41 42 42 45 46 46 48 50 59 61 63 64 70 72 77 Shown Brands Shown Previously 20 Brands for+ 3,225 UnitsNew = 20 brands - Net = Loss TOP 15 BY 1,893for # OF CLOSING Rank 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Ruby Tuesday Famous Dave's EvansBob Restaurants PolloTropical TGIFridays Silver's John Long Romano's Macaroni Grill Bruegger's Tim Hortons Company& Noodles Queen Dairy Papa Murphy'sTake Bake 'N' Pizza KFC Sam's Cafe(Walmart stores) CrabJoe's Shack Church'sChicken Applebee's Neighborhood Grill & Bar McDonald's PizzaHut Subway Chain Bagels Net Loss ------119 167 836 21 27 28 31 31 33 37 41 50 52 52 54 58 59 60 61 76 Site Selection Criteria Homerun Real Estate
Convenience High visibility / Strong signage High Traffic counts Excellent Access Ample Parking
43 7 FRANCHISE QSRs EXPANDING IN TN
ASK FOR PRESENTATION FROM RURAL DEVELOPMENT CONFERENCE
"Lacy and her team at Retail Strategies has become a constant resource for our development team. Currently, we leverage their insights and relationships along with their tech savvy approach and local market knowledge. This give us the advantage we need across a number of difficult markets.“ -Brian L. Peterson, Director of Real Estate & Development, FOURTEEN FOODS, Diary Queen Franchisee with 200+ units Retail in Athens, TN Community Input & Survey
Get to Know Your Community: A local survey using social media to target what you wish to know. • Report was conducted March 2019 • This report will contains 1,948 responses. • 5 Questions asked to residents of McMinn County TN via Facebook • A prize was sent to a randomly selected local voter (beats headphones)
Used by some of the biggest names in real estate. Discover
State of Tennessee Population 6.65 Million
Athens, TN Population 14,173
Prepared for Athens_TN by Retail Strategies 47 Discover: Drive Time & Radius
3-Mile 5-Mile 10-Mile 5-Minute Drive 10-Minute 15-Minute Drive Radius Radius Radius Time Drive Time Time
Current Year Estimated 15,208 22,660 43,439 8,804 19,593 28,753 Population
Number of Households 6,341 9,202 17,402 3,650 8,074 11,628
Projected Annual Growth (5 YR) 4.76% 4.51% 3.78% 3.06% 4.64% 4.25%
Median Income $32,207 $37,823 $39,498 $22,940 $36,537 $39,579
Average Age 40.1 40.6 41.3 40.2 40.4 40.9
Average Home Value $157,779 $167,398 $170,797 $118,155 $166,854 $168,838
% Bachelor's Degree 20% 19% 15% 9% 21% 18%
Daytime Population 24,448 28,883 44,536 12,638 28,325 33,809
Labor Force 6,570 10,111 19,192 2,004 8,629 12,943
Prepared for Athens_TN by Retail Strategies * Demographics pulled from city center as identified by internal GIS 48 Discover
Prepared for Athens_TN by Retail Strategies 49 Current Retail Overview
Prepared for Athens_TN by Retail Strategies 50 People Drive to Athens from a Larger Region to Shop
Mobile Data Collection This mobile tracking service uses data collected from cell phone users who enable location services. By drawing a polygon around a specific business or location we are able to gather valuable data about the customer base that has visited the location. This tool allows us to see where customers are coming from to shop in your market. This information is used to optimize your trade area, analyze business locations, compare frequency of visitors, and assist retailers in site selection. This is intended to support the trade area but does not solely define the trade area. The location tracked was Athens Walmart
for the time period of November 2016 to November 2017
Prepared for Athens_TN by Retail Strategies 51 Discover: Custom Trade Area
Customized Trade Each Arearetailer has a specific formula of market criteria they use to determine if they will have a profitable store. Understanding your trade area is extremely important because it sets the parameters for measuring demographic criteria and spending potential sought by retailers.
Municipal boundaries, radius rings, and drive times are a start to evaluating this information. However, these predefined boundaries are unable to take into account the unique aspects affecting the pulling power and local geography of your community. For these reasons, a customized trade area is the next step to analyzing a market.
A trade area is the geographic area from which a community attracts the majority of its customers. We define your primary trade area by the base of consumers likely to shop and eat in the market at least once a month. Your primary trade area has been created by combining mobile tracking data with other factors such as: current retail mix in your community, traffic patterns, destination attractions, and proximity to competing markets.
The time and distance consumers are willing to travel to shop is not “one size fits all.” Retailers will analyze trade areas differently by accounting for existing store locations, competition within their retail category, and convenience. Prepared for Athens_TN by Retail Strategies 52 OurDiscover: Research Custom Trade Area for Athens, TN 100,503 2018 Estimated Population Custom Trade Area
104,357 3.8% projected 2022 population projected growth rate 2017-2022
40 42 average male age average female age
Prepared for Athens_TN by Retail Strategies 53 Demographic of Respondent on Crowdsourcing Survey
Respondents from McMinn County, TN 1,948 Votes from 546 Voters Majority female age 18-24 March 2019
54 Summary of Top Requests Top 15 Brands Top Brands Not Likely
Each retailer has a specific formula of market criteria they use to determine if they will have a profitable store. Most retailers report to investors which drives decisions on new store expansion.
Due to the current expansion plans and site selection criteria not matching, it is unlikely these three brands will open in Athens in the near future unless something changes with the brand on a national level.
Retail Strategies has been hired by the City of Athens to proactively recruit retailers and restaurants. The feedback from this report will help Retail Strategies when marketing to these brands. The demand is clear from the shopping trade area that the brands would be supported. When asked What may NOT surprise you is that consumers from Athens are driving to Nashville, Knoxville and “How Chattanooga to shop. would you rank Athens What MAY surprise you, is the low ranking people gave for local shopping shopping and dining options. The and dining citizens ranked Athens at a 5.34 for options shopping and dining options on a from 1/10” scale of 1-10. Let’s compare Athens retail shopping the average ranking options by category to other similar was 5.34/10 retail nodes based on 10 minute drive times in Walmart Supercenter.
Analysis from 500 national brands Discover: Peer Analysis
Retail Node Comparison Report – 10 Minute Drive Time Residential Daytime Median HH City State Market Supply Population Population Income
Athens TN 22,219 30,333 $36,537 $671,365,049
Douglas GA 21,910 16,732 $34,339 $683,527,260
Wilkesboro NC 21,830 17,822 $34,757 $667,613,258
Dublin GA 22,411 17,148 $33,876 $653,644,576
Forest City NC 22,334 13,791 $34,284 $524,871,030
Waycross GA 23,148 14,907 $32,648 $463,860,686
Tifton GA 27,197 44,711 38,597 $1,015,526,699
Prepared for Athens_TN by Retail Strategies 59 Discover: Peer Analysis
Peer Report by Category Among the 500 national brands, this report suggests Athens can support more retail stores.
3 General 2 Hardware 26 2 Clothing 3 Electronics & Garden Merchandise 22 4 Restaurants
1 Shoe Store
15 4 Grocery 12 11
8 6 6 5 5 5 4 4 5 3 3 2 2 2 1 1 1 1 1 1 1 0 1
Athens Peer Average
Prepared for Athens_TN by Retail Strategies 60 Although Athens is Number One Requested Restaurant only 4 restaurants short compared to other similar retail nodes,
The Food and Drink category received 54% of requests for this report.
This is very high compared to the national median of 25% for the Food and Drink category. Other requested restaurant brands mentioned repeatedly When asked “Do you leave Athens to shop and eat? If yes where?”
1. Cleveland 2. Chattanooga 3. Knoxville
63 The most popular answer was, kid's/children activities. When asked “What goods and services are not Other answers included: more restaurants, entertainment concepts, and clothing stores. currently provided in Athens that you would like to see?” Discover: Consumer Demand & Supply
Customized Retail Category GAP Analysis
Building Material & Supplies Dealers $19,400,085
Furniture Stores $15,728,817
Other General Merchandise Stores $11,572,065
Beer, Wine & Liquor Stores $10,250,912
Full-Service Restaurants $10,242,621
Automotive Parts, Accessories, & Tire Stores $9,367,702
Shoe Stores $9,144,308
Health & Personal Care Stores $8,699,441
Sporting Goods, Hobby, & Musical Instrument Stores $8,483,424
Jewelry, Luggage & Leather Goods Stores $4,546,264
Prepared for Athens_TN by Retail Strategies 65 Top Requested Brands When asked to name a business or entertainment experience needed downtown, the most popular response was:
skating rink arcade mini golf laser tag children related events We started in 2011, when we saw communities who needed a retail advocate, someone who understood real estate and could negotiate connecting retailers and brokers. We now serve over 200 communities, maintaining a 5 client to 1 employee ratio. 11 RS TN Partners Athens Martin Bartlett Oak Ridge Economic Dev. Cookeville Portland East Ridge Pigeon Forge Johnson City Tullahoma Lebanon
69 Partnerships Retail Strategies was founded in 2011 to assist communities seeking economic and retail growth. Retail Strategies exists to give communities across the United States an advantage in attracting businesses. Our mission is to provide the real estate expertise, tools and human effort that position deserving towns as alluring locations for national businesses. With confidence, we pursue this mission by delivering unparalleled customer service as a unified team with unmatched real estate expertise.
70 JOHNSON CITY, TN- Population of 66,000
$38MM Annual Sales and 200 jobs from First Watch, Captain D’s, Five Below, Freddy’s Frozen Custard & Steakburgers, East Coast Wings & Grill, Publix, Maple Street Biscuit Company, Panda Express, Jo Ann Fabrics & Crafts, Petro’s Chili & Chips www.retailstrategies.com/webinar/ OPPORTUNITY ZONES
Rationale for Location of Size of Source of Investment Investor Investment Investment
Make a Primarily Varies by Varies by Difference Local to OZ Community Community Location
Make a Primarily Varies by Likely Not Difference National Investor Capital Gains Impact
Make a Local or Primarily Varies Profit National Large $ Opportunity
Profit / Tax Local or TBD Capital Gains Benefits National Tax Benefit Discount
Rose’s Bargain Hunt Dirt Cheap Ollie’s Bargain Outlet Dollar General Family Dollar
74 Other Farmers Furniture PetSense Planet Fitness Harbor Freight Workout Anytime
75 Estimated Economic TN Expanding Brands Your successes grow from partnerships. Impact MARTIN, TENNESSEE Martin, Tennessee was quickly identified as a prospective city for Farmers Furniture. Our team worked with the Director of Economic and Community Development for Martin, TN,. $3M Attempts to lease out this shopping center had been made before with a previous owner to no avail. The day that a buyer purchased the shopping center Retail Strategies had him Sales Estimate introduced to the Farmers Furniture broker. After 5 months of deliberation the parties came to an agreement and executed a lease. Farmers Furniture opened fall of 2017.
$65,000 Local Sales Tax Collection
115 Estimated Job Creation
76 Tentative: RETAIL ACADEMY - JULY 22, 2019 NASHVILLE
APPLICATIONS WILL OPEN END OF APRIL
It's not just about what we are going to give to you, it's about what we are going to build together.
We need you to be a part of that journey.
~ Robert Jolly, CEO Retail Strategies retail IS economic invest time & development resources in retail Retail’s Impact 1 in 4 jobs are retail
Source: National Retail Federation Source: National Retail Federation Why Should a Municipality Invest Resources in Retail?
Retail builds on retail. Retail economic impact adds up quickly. Retail attracts the workforce that attracts the primary jobs. Retail influences executives looking to locate their company in your community. Retail enhances quality of life that brings your children home.
Retail builds tax base. --- Retail adds jobs from entry level to managerial. --- Retail builds communities. September 12 – 13, 2018| Franklin, TN Within the Retail Academy participant communities, the June 2017 – June 2018 economic impact has created
576 new jobs
$1.7M local tax revenue
$4.5M state tax revenue 56 Retail Academy Communities 2016-2017
Alamo Kingston Springs Selmer Ashland City Lafayette Smithville Bolivar Lebanon Sneedville Brownsville Lexington South Pittsburg Carthage Linden Sparta Caryville Livingston Spencer Collinwood Lobelville Spring City Covington Maynardville Tiptonville Dresden McKenzie Tracy City Elizabethton Mountain City Trenton Erin Newport Unicoi Erwin Oneida Wartburg Gainesboro Parkers Crossroads Waynesboro Hohenwald Parsons Whitwell Humboldt Pegram Woodbury Huntingdon Pikeville Huntsville Pleasant View Jamestown Ripley Jellico Rutledge RETAIL ACADEMY CLASS OF 2018 RA 101 White Bluff Somerville Pulaski Portland Mosheim McMinnville Loudon Jefferson City Jasper Humboldt Henderson Greeneville Dyersburg Dunlap Decatur Dickson Bolivar Alamo RA 201 Athens Whitwell Waynesboro Tullahoma Tracy City Spring City Ripley Mountain City McKenzie Maynardville Lexington Jamestown Erwin Erin Cheatham Co. Sammie Arnold
Brooxie Carlton
Logan McCoy
TN Department of Economic & Community Development
Kim Denton TCED Director, CIS UT Institute for Public Service
Kim Denton serves as the Tennessee Certified Economic Developer (TCED) Director for the University of Tennessee Center for Industrial Services. The TCED Program provides quality training, continuing education and professional development opportunities for economic and community development practitioners and community leaders. Stephen Surles Senior Manager, Global Business Tennessee Valley Authority, TVA
Stephen Surles oversees management of the regional development and technical services team to ensure all goals meet or exceed agency standards throughout the seven-state TVA service area. These goals include assisting prospective and existing industries, facilitating financial services and helping communities support and grow local businesses. His regional development team also works with TVA partners to implement community preparedness programs, deliver resources and technical assistance and coordinate TVA’s marketing and business development efforts. This event is recognized by the International Economic Development Council (IEDC) as a professional development event that counts towards the recertification of Certified Economic Developers (CEcDs). Terry Bobrowski Executive Director East Tennessee Development District Chris Craig Executive Director First Tennessee Development District Michael Skipper Executive Director Greater Nashville Regional Council Ralph Moore Executive Director Memphis Area Association of Governments John Bucy Executive Director Northwest Tennessee Development District Jerry Mansfield Executive Director South Central Tennessee Development District Beth Jones Executive Director Southeast Tennessee Development District Joe Barker Executive Director Southwest Tennessee Development District Mark Farley Executive Director Upper Cumberland Development District Q&A
103 120 18th Street South, Suite 120, Birmingham, AL 35233 205.314.0386 retailstrategies.com