Retail Market Demand and Impact Analysis – City of Elliot Lake, Ontario
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Retail Market Demand and Impact Analysis – City of Elliot Lake, Ontario Prepared for: The City of Elliot Lake November 22, 2012 November 21, 2012 Mr. Rob De Bortoli CAO, Elliot Lake Elliot Lake City Hall 45 Hillside Drive North Elliot Lake, ON, P5A 1X5 Dear Mr. De Bortoli: Re: Retail Market Demand and Impact Analysis – City of Elliot Lake, Ontario urbanMetrics inc. is pleased to submit our report, which details our analysis of the market opportunity for additional retail/service commercial space in the City of Elliot Lake. The Elliot Lake Economic Development Advisory Committee has engaged urbanMetrics to undertake a detailed analysis of the Retail Sector in the City of Elliot Lake in light of the Algo Mall tragedy and provide the Community with a formal assessment of the retail/service commercial growth prospects in the short, medium and long-term. As a result of the Algo Mall closure, almost 20% of the commercial capacity in the City of Elliot Lake has been eliminated. This report provides an assessment of the existing and future market demand for a full range of retail/service commercial and identifies the warranted additional space in each store category. It is also intended to provide Elliot Lake with a strategy for managing its retail and service commercial space to ensure that the appropriate balance of goods and services is available locally. The analyses and appendices in the attached report provide our detailed study findings and conclusions. Yours truly, urbanMetrics inc. Peter Thoma, MCIP, RPP, PLE Partner Market Demand and Impact Analysis – The City of Elliot Lake, Ontario TABLE OF CONTENTS 1 INTRODUCTION ........................................................................................................................ 3 1.1 STUDY APPROACH .......................................................................................................................................... 3 1.1.1 RETAIL MARKET ANALYSIS....................................................................................................................... 3 1.2 ASSUMPTIONS .................................................................................................................................................. 4 2 RETAIL AND SERVICE COMMERCIAL MARKET ANALYSIS .......................................... 5 2.1 TRADE AREA DELINEATION ...................................................................................................................... 5 2.2 MARKET CHARACTERISTICS ..................................................................................................................... 5 2.2.1 HISTORIC & FORECAST POPULATION .................................................................................................. 6 2.2.2 PER CAPITA INCOME .................................................................................................................................... 6 2.3 REVIEW OF RETAIL COMPETITION ........................................................................................................ 7 2.3.1 EXISTING TRADE AREA RETAIL FACILITIES ..................................................................................... 7 2.3.2 PROPOSED COMMERCIAL DEVELOPMENTS ..................................................................................... 8 3 RETAIL MARKET ANALYSIS .................................................................................................. 9 3.1 FOOD STORE RETAIL (FSR) ANALYSIS .................................................................................................. 9 3.1.1 FOOD STORE EXPENDITURES .................................................................................................................. 9 3.1.2 SUPERMARKET ANALYSIS ...................................................................................................................... 11 3.2 NON-FOOD STORE RETAIL (NFSR) ANALYSIS ................................................................................. 13 3.2.1 NON-FOOD STORE RETAIL EXPENDITURES .................................................................................. 13 3.2.2 BUILDING AND OUTDOOR HOME SUPPLY STORE ANALYSIS ................................................ 16 3.2.3 PHARMACY AND PERSONAL CARE STORE ANALYSIS ............................................................... 18 3.2.4 CLOTHING AND ACCESSORIES STORE ANALYSIS ........................................................................ 20 3.2.5 FURNITURE, HOME FURNISHINGS AND ELECTRONICS STORE ANALYSIS..................... 22 3.2.6 GENERAL MERCHANDISE STORE ANALYSIS ................................................................................. 24 3.2.7 MISCELLANEOUS RETAIL STOREANALYSIS ................................................................................... 26 3.3 PER CAPITA SPACE ANALYSIS ................................................................................................................ 28 3.4 RETAIL MARKET ANALYSIS CONCLUSIONS ..................................................................................... 30 4 COMMERCIAL STRATEGY .................................................................................................... 32 4.1 WARRANTED SPACE IN ELLIOT LAKE OUTSIDE PEARSON PLAZA ........................................ 32 4.2 SUMMARY OF MARKET DEPTH ............................................................................................................. 33 4.3 CONCLUSIONS ............................................................................................................................................... 36 APPENDIX A – ONTARIO MINISTRY OF FINANCE POPULATION PROJECTIONS ....... 40 APPENDIX B – RETAIL INVENTORY ........................................................................................ 45 APPENDIX C – NAICS CODES ...................................................................................................... 48 1 Market Demand and Impact Analysis – The City of Elliot Lake, Ontario APPENDIX D – RETAIL ANALYSIS BACKGROUND ............................................................... 52 APPENDIX E – CONSUMER SURVEY RESULTS ...................................................................... 56 APPENDIX F – RETAIL IMPACT ANALYSIS ............................................................................ 72 APPENDIX G – MARKET DEPTH STORE LIST ....................................................................... 81 2 Market Demand and Impact Analysis – The City of Elliot Lake, Ontario 1 INTRODUCTION urbanMetrics inc. has been retained by the City of Elliot Lake (‘the City’, ‘Elliot Lake’) to undertake an independent market analysis to determine the amount of additional retail/service commercial space need to serve the local market. In this report, urbanMetrics analyze local market conditions in Elliot Lake, and neighbouring jurisdictions, to quantify the amount of warranted, additional retail space that could be built in Elliot Lake, taking into consideration the space already exists, plus the space that is “tentatively proposed” as part of Pearson Plaza redevelopment project. 1.1 STUDY APPROACH 1.1.1 RETAIL MARKET ANALYSIS The following work plan has been undertaken to evaluate the retail market opportunity for the additional retail/service commercial space in the City of Elliot Lake: 1. Trade Area Delineation: A Trade Area has been defined for the project based on a number of factors including: existing and future competition in the local area, plus the anticipated drawing power of the Pearson Plaza. The Trade Area has been further divided into a Primary Zone (Elliot Lake) and a Secondary Zone (Spanish, Blind River, North Shore, Mississagi River IRI, and Serpent River IRI). 2. Retail and Service Commercial Inventory: An inventory of retail and service commercial uses has been undertaken in the Primary Zone of the defined Trade Area, including vacant floor space. 3. Determine the Dimensions of the Trade Area Market: The population in the Trade Area has been determined for selected years of the study period to 2031. Historic and current population levels are based on the Statistics Canada 2006 and 2011 Census data. Future population levels are based on the Ontario Ministry of Finance projections for the Algoma Census Division. In addition, income and expenditure levels have been determined for Trade Area residents for a variety of food store retail (“FSR”) and non-food store retail (“NFSR”) store categories and have been analyzed based on the expenditure approach. 4. Calculate Market Opportunity: Two types of analyses have been utilized to evaluate the market opportunity for retail and service space in the Trade Area: 1) expenditure based approach for FSR and NFSR space, and 2) per capita space analysis approach to determine the appropriate amount of service space. 5. Evaluate Impact: Based on our market analysis, any sales transfers required from existing and future potential competitive stores in the City of Elliot Lake have been determined. 3 Market Demand and Impact Analysis – The City of Elliot Lake, Ontario Specifically, our market analysis and impact assessment has identified (a) the amount of retail and service commercial space warranted in the City of Elliot Lake; (b) the amount of space which could be accommodated beyond the space currently proposed as part of Pearson Plaza; (c) whether it would result in transfers from existing in the Primary Zone; (d) the magnitude of sales transfers, if applicable; and (e) whether the sales transfers would impact the viability of