Laserfiche WebLink
JDEDZ PROJECT REVIEW <br /> SEPTEMBER 2017 <br /> (estimated by ALH at just $681,000 per year). Including the category in a study of retail again <br /> serves to dilute the apparent impact of Costco. <br /> In future years, the JDEDZ is likely to include any number of eating and drinking establishments. <br /> This category, however, is generally analyzed separately from conventional retail with very good <br /> reason: food and beverage service is a service, not a retail sector, and operates in a market <br /> very different from storefront retail. <br /> As depicted in the Figure Figure 7 <br /> 7, restaurants have far RETAIL vs RESTAURANT MARKET CHANGES, 1997,29V <br /> outperformed retailers <br /> in recent years, while 50.0% — — — <br /> — <br /> brick and mortar <br /> retailers have lost 40.0% <br /> ground as a share of <br /> overall retail and even <br /> 30.0% <br /> relative to population • <br /> growth. As a result, <br /> mixing restaurants and 20.0% --- — <br /> bars into a retail <br /> dataset masks negative 10.0% - <br /> trends impacting retail <br /> stores. 0.0% I t <br /> Because the food and <br /> -10.0% — — <br /> beverage sector is Establishments Sales(Inflation Adjusted) Employees <br /> growing, it is of little <br /> concern that the 0 Brick and Mortar Retail 0AlI Retail Restaurants and Bars <br /> JDEDZ might introduce <br /> additional restaurant Source:US Census Bureau,Economic Census <br /> locations. And, as with smaller retail locations, restaurants could be developed in the EDZ <br /> without the expenditure of millions in infrastructure improvements. <br /> Future Demand Projections Ignore Current Retail Trends <br /> Having established an inflated retail demand estimate of 25% of household income, ALH carries <br /> that forward among all new households projected in the market area. Beyond the <br /> overstatement of household retail demand demonstrated above, Civic Economics questions the <br /> projection that any rate of household retail demand will be flat into the future, at least in regard <br /> to storefront retail demand. <br /> The ALH Economic Impact Study makes no reference to the rise of online retailing and its <br /> impact on the market for bricks and mortar retailers, ignoring the most discussed and studied <br /> aspect of retail economics of the last few years. <br /> Online retail is made up of non-store retailers like Amazon, as well as the online efforts of <br /> traditional retailers like Macy's and Home Depot. These sales generate little demand for local <br /> retail square footage, which is what the ALH study seeks to forecast. As Figure 8 reveals, <br /> forecasts of the market for local storefront retail must account for the ever-increasing diversion <br /> of sales from shops to distribution centers. <br /> Civic Economics 15 <br />