While I cannot speak to the specific reasons why companies have one what they have done, I can speculate based on my experience.
To begin, Rainbow did not build the store at 29th and Dupont. Rainbow attained it as a part of the package when they acquired Applebaums. Applebaums operated before the larger box format existed and was more of a traditional neighborhood grocery store. The store does not fit very well into the actual Rainbow concept and I doubt if that store was performing as the other larger format stores did. The market potential equation includes, as you can imagine, measures of both demand and supply and the locational relationship between them within a generally defined trade area. Trade areas are contiguous geographic areas where people will generally shop within. (People don't normally and regularly pass 2 or 3 grocery stores to go to one that offers a similar level of product or quality.) Demand is based on per capita expenditures on groceries that are primarily driven by household size, age of household members, and income. In short, the more people you have in an area, the more demand. But that demand is calculated by small units called block groups. Therefore, each block group is a geographic unit plotted in an area that represents a dollar value. Supply is calculated by measuring the volume of retail sales for each retailer serving the trade area. Some of these sores could be operating within the trade area, or on the edge of the trade area. These volumes are traditionally attained through the experienced field work and survey work of professional grocery market researchers. For each store, there is a modeling process that determines the block group cells from which they are drawing their supply. It has to come from existing customers based on the characteristics of the store. Some stores draw in tight and have a small trade area. Others, like the warehouse format or supercenters, draw from a broad area. Once the model allocates the market share for each block group to each store, the market model is "balanced". Considering new stores involves inputting a series of factors into the proposed site, such as size of store, product offerings, strength of the retailer's brand, operational issues, such as hours, service levels (bagging, etc). A series of alternative sites and store formats are often used to determine feasibility. Feasibility must cover the costs of building, upgrading an existing store, and operating the store. I am not familiar with the Elliot Park market study, its results or methodology. While it may have potential value in attracting retailer interest, if the study was not performed on behalf of a specific retailer, there are limits to its utility. I can speak to that first hand from being on both sides of that fence. I think you are right on your last point. If (or when) there is enough unmet demand (created by numbers of people), the retailers who are comfortable with operating in urban locations will come. But just two follow up points. Grocery sales are primarily driven by per capita expenditures and families with children will create more demand than single households or households without children. Second, not all retailers are comfortable with urban locations, given that most market growth has occurred in the outer ring suburbs and the formats that have proven to work for those retailers primarily serve those market characteristics, simply because they've got the formula down.) Steve Kotvis Kenwood > Thanks for your input. I would like to know more. How > was it decided that Rainbow would build a store at > 29th and Dupont in Lowry Hill East and at 27th and > Lake in Longfellow instead of Nicollet and Lake, Park, > Portland, Chicago, Bloomington or Cedar or Hiawatha > and Lake? What statistics go into the development of > the equation that justifies locating a business in a > particular area? Knowing this might help educate me > and others about just how these decisions are made. > > Elliot Park spent NRP funds doing a market study to > prove that there was a population to sustain a grocery > store in the neighborhood. I believe the outcome of > the study showed that the necessary elements were > present to attract a grocer. While Elliot Park has > been extremely successful in turning the tide in that > neighborhood through strategic development > partnerships, they have yet to attract a grocer. I > wonder how quickly that will change now that there is > a large infusion of market rate condos and apartments > being developed in the area. > > Barb Lickness > Whittier > > ===== > "Never doubt that a small group of thoughtful, committed citizens can change > the world. Indeed, > it's the only thing that ever has." -- Margaret Mead > > __________________________________ > Do you Yahoo!? > Yahoo! SiteBuilder - Free, easy-to-use web site design software > http://sitebuilder.yahoo.com > REMINDERS: > 1. Think a member has violated the rules? Email the list manager at > [EMAIL PROTECTED] before continuing it on the list. > 2. Don't feed the troll! Ignore obvious flame-bait. > ________________________________ > > Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy > Post messages to: mailto:[EMAIL PROTECTED] > Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls -- Steve Kotvis REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
