2012_0319_Packet - Laserfiche WebLink

Home

A GUIDE TO RETAIL IMPACT STUDIES 3. FORECAST OF MARKET CHANGES OVERVIEW: In the third phase of the study, the analyst examines how the existing retail economy will likely respond to the proposed development. The analyst will: market area, derived from either import substitution (reduced leakage) or nonresident spending, and how much will be drawn from existing merchants. Present this forecast in probable ranges, reflecting the medium, or most probable, scenario, as well as the high and low end of the forecast. GLOSSARY: Import substitution occurs when residents begin making purchases locally Nonresident spending that they previously made in other communities. refers to retail purchases made by people living outside the market area. DATA SOURCES: ESRI-BIS and/or Claritas; corporate annual reports. Forecasting Changes in Retail Sales in the Market Area Any new retail option in a community presents an opportunity to increase total retail activity through two outcomes. The first is import substitution, in which local residents begin making purchases locally that they previously made in other communities. No community, large or small, is entirely self-sufficient in retail activities. Residents of a town routinely make purchases across jurisdictional boundaries for a wide range of reasons, from convenience to preference to cost sensitivity. In rural Maine, for example, it is likely that many consumers incorporate shopping time into trips to Portland, dising strategies, might well induce residents to forego some of the shopping they do elsewhere. The second is nonresident spending, in which residents of other communities begin making purchases in the host community that they previously made elsewhere.The underlying effect is to strengthen or even expand the local retail market area, attracting residents of other communities due to the availability of new, more appealing, or cheaper goods. True n areas may, in fact, radically alter the ability of a given community to draw nonresidents. Nonresident spending may also grow through increases in tourist spending. It should be noted that spending by tourists presents analytical challenges. The values compiled for market area demand are based on residents and their anticipated spending habits. Areas with strong tourist activity, however, regularly show substantial surplus retail spending in lines of goods that 15