Retail Market Analysis

ESRI’s Retail MarketPlace data was used to measure retail activity by trade area and to compare retail sales to consumer spending by NAICS industry classification. The retail marketplace analysis is based on three trade areas: 5-minute, 30-minute and 45-minute drive times from the middle of Downtown Independence. The 5-minute travel time encompasses the entire community of Independence, while the 30-minute drive time includes part of the City of Waterloo and other nearby rural communities. The 45-minute travel time reaches two of the region’s larger metros, Cedar Falls/Waterloo and the north part of the Cedar Rapids area.

Based on this analysis, there are some areas of the retail market that have a local demand (customers spending money on that type of retail) that is not met in the area and leaking to other areas outside of Independence (customers going to other areas to spend money on retail). There is an estimated $15 Million in retail trade and food & drink that is being spent by area residents outside of the City of Independence.

Some examples of retail that is in short supply in the City of Independence are: •Furniture Stores •General Merchandise Stores •Miscellaneous Retail Stores (i.e. florist, office supply etc.)

The table (on the right) summarizes the supply vs. demand for various retail categories.

The Retail Gap represents the difference between retail potential and retail sales. The Leakage/Surplus Factor presents a snapshot of retail opportunity (supply vs. demand), ranging from +100 (total leakage) to -100 (total surplus). A positive value indicates there is more demand than supply in the area (i.e. consumers are “leaking” outside the trade area to acquire goods and services). A negative value indicates there is a surplus of retail services (i.e. consumers are drawn in from outside the trade area and demand within the trade area is being met)

Retail Market

(Industry Summary)

5 minute Drive Time 30 minute Drive Time 45 minute Drive Time

Retail Trade (NAICS 44-45) Demand (Retail Potential) $69,471,963 $702,709,007 $3,581,859,826 Supply (Retail Sales) $55,503,500 1,028,571,515 $4,383,848,961 Retail Gap $13,968,463 -$325,862,508 -$801,989,135 Leakage/Surplus Factor 11.5 -18.8 -10.1 Number of Businesses 36 354 2,979

Food and Drink (NAICS 722) Demand (Retail Potential) $6,502,958 $64,661,436 $346,833,443 Supply (Retail Sales) $5,337,352 $73,802,667 $380,849,270 Retail Gap $1,165,606 --$9,141,231 -$34,015,827 Leakage/Surplus Factor 9.8 -6.6 -4.7 Number of Businesses 13 145 656

Retail Trade and Food & Drink (NAICS 44-45, 722) Demand (Retail Potential) $75,974,921 $767,370,443 $3,928,693,269 Supply (Retail Sales) $60,840,851 $1,102,374,181 $4,764,698,231 Retail Gap $15,134,070 $335,003,738 -$836,004,962 Leakage/Surplus Factor 11.1 -17.9 -9.6 Number of Businesses 49 574 2,285

The graphs below indicate mismatches between supply and demand for retail industry sub sectors within Independence. As shown below there are only a few industry types that are being met. Those that are met have great opportunity to expand and get closer to 100 percent.

Spending Habits

There are three main tapestries or groups of consumers that are spending money in the Independence area. The top tapestry segments of Middle Constants, Rustbelt Traditions, and Heartland Communities make up the majority of the consumer groups in the Independence area. These groups are anticipated to grow in the area, of note is the median age looks to be dropping with a younger demographic moving into the area and a median Household Income anticipated to rise from $59,603 to $68,000 over a five year period. As shown below, consumers in Independence in each category are high in the spending potential index, 100 is the high end of the index and all but one category for Independence is 80 and above. This means that consumers are buying products consistently in all categories and will continue to do so in the future.