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A GUIDE TO RETAIL IMPACT STUDIES tourists purchase while visiting. The ability of a new retailer to attract additional tourist spending is, therefore, more difficult to estimate. Moreover, in some cases, the presence or design of a large format retailer may ultimately reduce tourist spending and even nonresident spending by damaging the appeal of the downtown or other establish shopping areas. A small and short-lived increase in local retail sales may also occur due to induced spending, in which consumers make purchases that they previously would not have made. Only the most novel and attractive retailers, though, can induce completely new retail spending. Moreover, the relatively inflexible nature of the typical household budget suggests that such spending will be a brief indulgence or will be offset by reduced spending on other items. Presenting the Forecast in Probable Ranges Humans are a fickle species, never more so than when we act as consumers. Our tastes change with the seasons, fads and trends come and go, and retailers are perpetually reacting to those changes. Indeed, many retailers seek to drive those changes, creating demand where there was none. As a result, forecasting the impact any proposed retailer may have in a given retail market is not an exact science. However, careful and data-driven analysis can provide public officials with a reasonable guide for what they may anticipate. Often, presenting forecasts within a range from a low impact scenario to a high impact scenario can provide decision makers with enough information to make their votes from an educated stance. It should be noted that, barring truly extraordinary circumstances, a new large-scale retailer will not, by its very presence and in the near term, reduce 1 total retail sales in the area.The basic question for the FORECAST RANGE analyst, then, is by what amount the proposed store would increase sales. LOW: The new retailer generates minimal new sales with more of New retailers with the least positive impact are those its revenue diverted from existing that offer goods already widely available and price merchants. competitive in the impact and market areas. Those with the most positive impact tend to introduce new, MEDIUM: Most likely mix of new and diverted sales. more attractive, or cheaper goods to the market or to merchandise those goods in compelling ways. These HIGH: The new retailer generates impacts will also vary among different lines of goods. A maximum newsales with less of new supercenter, for example, may dramatically its revenue diverted from existing broaden local offerings in electronics or sporting goods, merchants. 1 Research by economist Kenneth Stone suggests that, over the long-term, towns that gain large-format stores may experience declines in overall retail sales if the surrounding region becomes saturated by similar outlets. See, for example, "The Impact of 'Big-Box' Building Materials Stores on Host Towns and Surrounding Counties in a Midwestern State," by Kenneth Stone and Georgeanne M. Artz, Iowa State University, 2001. 16