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the market area as a whole has attraction in all major retail categories. This suggests that recaptured leakage beyond the sales assumed to be recaptured from area club retail stores is not a likely source of demand for the Project's retail components. Project Sales and Store Impacts Recognizing that the market area is a sales attraction market, the analysis estimates that for the Project to be successful, all of its sales from market area residents would comprise sales diverted from existing retailers, excepting demand generated by new market area households, which is significant. Based on estimated household growth averaging just over 1.0% a year, this new demand is estimated to total $51.7 million in retail sales by 2018, an additional $171.1 million between 2018 and Full Buildout, for a cumulative total of $1.7 billion by Full Buildout, or 2028. Taking Project sales generated by market area households and new demand into consideration, Phase I Project's sales impacts are estimated to total $26.7 million for existing retailers, or 0.9% of existing market area sales. This is the amount of sales estimated to be diverted from existing market area retailers after new household demand is taken into consideration. Overall this is a nominal level of impact. However, the sales impact is anticipated in three retail categories, including $0.3 million in Gasoline Stations, $1.9 million in Home Furnishings & Appliances, and $23.2 million in Food & Beverage Stores. The sales impacts in Home Furnishings & Appliances and Gasoline Stations are nominal and given the size of the sales base are not deemed large enough to result in existing retail outlet closures. Moreover, these sales impacts are anticipated to be offset quickly following completion of Phase I, including a period of less than one year for the Gasoline Station impact and just over two years for the Home Furnishings & Appliances impact. Thus, these impacts are not deemed severe enough to result in existing outlet closures. The estimated Phase I sales impacts in the Food & Beverage Stores category are more substantial. At $23.2 million these impacts are equivalent to 7.4% of the existing sales base. This volume of sales could result in lower store sales performance among a number of existing Food & Beverage stores, which includes at least 17 more traditional food stores in the market area, as well as numerous ethnic and other small food markets. Or the sales impacts could be concentrated among just several retailers most comparable to the discounted or bulk food options available at a club retailer. Based upon average store sales performance, the estimated volume of diverted Food & Beverage Store sales is sufficient to support approximately 36,000 square feet of space. While this level of impact could suggest the potential for one existing grocery store in the market area to be at risk of potential closure following Phase I Project development, it is unlikely based on the outcomes experienced in similar jurisdictions after club stores opened. It is further unlikely because the nature of goods available at club retail stores are typically bulk in nature, with very limited variety, such that they do not lend themselves to the average household consumer who needs to stop by a grocery store once or twice a week for basic household needs or to round out the pantry and purchase ingredients for intimate family dinners. In addition, spread over just the more traditional market area food stores, the estimated level of impact is equivalent to less than $1.4 million in sales impact per store, which is likely not a sufficient sales volume loss to trigger store closure. Many stores can likely compensate for this loss through product repositioning and other operational changes. Further, some of these impacts will be offset over time as additional new demand is generated, averaging about $3.0 million a year after 2018. Johnson Drive EDZ Urban Decoy 3 ALH Urban 8 Regional Economics