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A GUIDE TO RETAIL IMPACT STUDIES
<br />The next step is to compare supply with demand: for each line of goods, how much do actual
<br />retail sales exceed or fall short of expected sales? This analysis involves a rather simple
<br />process of subtraction. Actual sales for a given line of goods are compared with potential
<br />demand in the market area and the difference is expressed as either a surplus (indicating strong
<br />local sales and attraction of shoppers from outside the area) or a deficit (indicating weak local
<br />sales and leakage to other jurisdictions).
<br />Although e-commerce sales can affect retail activity for certain lines of goods, there is no
<br />reliable data on internet sales by location. In situations where the presence of internet sales is
<br />skewing the results in a meaningful way, the analyst may estimate these sales to correct the
<br />problem or provide some discussion of the issue in the analysis.
<br />Similar retail surplus/deficit analyses may also be prepared for nearby communities with retail
<br />market areas. These analyses will provide very clear indications of where residents in the
<br />impact area are making various purchases and, conversely, how successful the impact area is
<br />in attracting nonresident spending.
<br />The following is an example of a retail surplus/deficit analysis, adapted from an actual rural
<br />community:
<br />Retail Supply and Demand Analysis
<br />CITY TRADE AREA SURPLUS /
<br />SALESDEMANDDEFICIT
<br />NAICSLINES OF GOODS
<br />$70,094$2,784,584$2,714,490
<br />4431Electronics and Appliance Stores
<br />$3,711,557$7,239,125$3,527,568
<br />448Clothing and Clothing Accessories Stores
<br />$3,960,259$4,333,791$373,532
<br />451Sporting Goods, Hobby, Book, and Music Stores
<br />$5,238,087$2,538,029
<br />$2,700,058
<br />452General Merchandise Stores
<br />$9,153,619
<br />Available Deficit in the Market: General Merch.
<br />$29,566,236$26,858,876$2,707,360
<br />445Food and Beverage Stores
<br />$344,065$3,073,249$2,729,184
<br />4461Health and Personal Care Stores
<br />$21,824
<br />Available Deficit in the Market: Grocery/Drug
<br />Source: ESRI-BIS, Civic Economics
<br />This is a another example of a retail surplus/deficit analysis, from a 1993 study prepared on
<br />behalf of the state of Vermont for a proposed retail development in St. Albans.
<br />It should be noted here that, for the typical rural community, deficits or leakage will be the rule
<br />rather than the exception and leakage, in an of itself, is no cause for alarm. Even urban areas
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