Monday, February 15, 2016

Retail Cannibalization

In the February 10-16, 2016 issue of the Loudoun Times-Mirror, an article titled Cautionary Forecast for Retail in Loudoun outlined a 291-page report/study conducted for the County by Streetsense, a consulting group, that expresses caution about retail growth in one of the fastest growing counties. The submarkets studies were east of Route 15, but the cautionary tale is one we should take head of here in the west.



In sharp contrast to the LTM article, the Purcellville story about the study mentioned what the study was focused on but gave no indication as to the results.


 

The 6-month study stated that retail need is often over-estimated and can quickly result in a retail market that is over-supplied.  Of particular concern was the finding that "aging centers have been out-positioned by new and renovated retail options. Addressing issues related to vacancy and oversupply will be paramount in these neighborhoods."    

The Purcellville Plaza currently has many retail vacancies while the newer Purcellville Gateway is at full capacity.  With the construction and opening of Catoctin Corner and then the other proposed development being proposed north of Route 7 on the periphery of town, what then will happen to our Main Street?  

It's good to patronize and celebrate the new shopping centers to make sure they thrive, but we can't do it at the expense of the rest of Purcellville or it just becomes a swap -- the same stores at a different place. 


A Purcellville Retail Market Analysis was completed in March 2006 by Arnett Muldrow Associates through the Main Street Loudoun program for the Town of Purcellville.  In September of 2014, the study was updated (click here) to reflect the changes in demographics and the retail market since 2006, and to make broad recommendations on future actions as the town moves forward.  

The Retail Shares Analysis chart shows key areas where Purcellville underperforms. According to the study, 'Gasoline stations surprisingly represent less than their “fair share” in the county." As a layman, I read that as "build more gasoline stations!" 

The study did not focus on or ask the questions about what market forces cause the gasoline sales leakage out of town.  So I informally asked many where they purchase their gas and they either purchased it in Leesburg or near their work at locations further east of Loudoun.  Often, people use an app called Gas Buddy to determine where to buy their gas (pictured below). Here is the most recent snapshot of gasoline prices in Leesburg and Purcellville: 




The difference between the gas prices is $166.00 a year.  For many, seeking the lowest gas price is about getting a good deal or the psychological victory of coping with that pinch in the pocketbook that drives them to chase those low gas prices.  Since many who live in Purcellville do major shopping in Leesburg and points East or West, they may find themselves filling up on gas more frequently there instead of closer to home. 


 The Impact of Chain Stores on Community

Chain stores and chain restaurants have a place in our society and provide valuable services to our communities, and there is evidence that too much of a good thing is just that -- too much. 

Retail chain outlets may bring us lower prices and wider selection, but in the long run, we may lose competition. Those lower prices lead to shuttered mom and pop outlets and the money in our community goes to a smaller set of establishments and leaves our community.  Striking a good balance and creating policies which encourage small businesses can protect Purcellville's economy. 

Developers often present their developments as significant additions to the local economy,  noting the sales and revenue benefits and new jobs.  Overlooked is the fact that manufacturing facilities create real economic growth, and new retail stores often shift consumer spending from one area of town to another.  

It was predicted that the new Harris Teeter would contribute to a 30 percent rise in grocery sales. In reality, folks shifted their spending habits and grocery sales at Food Lion and Giant went down while grocery sales as a whole increased moderately.  Households have incomes that are finite and unless they have a substantial increase in income or there is a large increase in population, we can't make such optimistic predictions.   

The first meeting for the new comprehensive plan took place recently, and the keywords used to describe Purcellville were "friendly, quaint, small town."  We are losing our small-scale pedestrian shopping areas, like 21st Street and much of Main St.  In its place are massive, impersonal shopping centers and some which may only be accessible by car. 

Purcellville is a gateway to wineries and agro-tourism companies in Western Loudoun. Our Town is still an excellent reflection of its history and still retains a distinct flavor.  Our local gems like Nichols and Purcellville Diner are a source of community pride and attraction to visitors. Magnolias draws people from all over the county and beyond.  The new West End Wine Bar & Pub has brought back to use a building which had long ago operated as a restaurant.  The Wine Kitchen inhabits the old Cole Farmhouse and brings in folks looking for a unique experience, and our incomparable Catoctin Creek Distillery has become the crown jewel of Purcellville.  


Recommended Strategies from the Purcellville Market Study

Recommendation One: Continue to pursue infill development per the prior plans. Infill development and not additional sprawl are critical to the success of Purcellville. This development should be highly sensitive to the design aesthetic of the community and not try to impose a false “theme” to what remains a charming rural feeling town in spite of the significant growth that has occurred. 

Recommendation Two: There are several uses along Main Street that could easily locate to other parts of the town where commercial real estate does not come at such a premium. While these owners should be encouraged to stay as long as they desire, the community should explore ways to discuss plans along the corridor with existing owners. This would allow for the expansion of quality retail along Main Street between downtown and Purcellville Gateway while allowing for the existing uses such as car repair and dealerships to migrate to industrial areas in town such as Hirst Road. 

Recommendation Three: From a policy standpoint, the Town of Purcellville should be proactive in addressing “small box” development. Design guidance that specifically addresses box stores should be provided in the zoning code to ensure that these stores preserve and enhance the character of Purcellville. To date, the community has had excellent results with new retail development being sensitive to the community aesthetic. “Small box” general merchandise stores are likely to be exploring the market in a robust way and the community should be prepared. 

Recommendation Four: Continue promotion efforts in partnership with other entities. The opportunity exists for Purcellville to “cement” its role as “In the Heart of DC’s Wine Country” with a gathering place for wine enthusiasts that may have both a tourist and an education component. The community also can take the Shop Purcellville campaign to a new level of participation with non-profit or private sector partners that engage with local merchants and restaurants on a consistent marketing effort. 

Recommendation Five: Continue to work on hotel development. A hotel is likely to be independent and smaller than a chain hotel but would be a great contributor to the community.

As we embark on our Comprehensive Plan Review, please visit planpurcellville.com to stay informed.  An old saying, "If you don't know where you're going, any road will take you there" rings true. Citizens and stakeholders know where they want to go.  We leaders are here to open the door to widening citizen participation.  Our comprehensive plan will identify our community priorities and strategies to utilize our assets and address local challenges.  Our plan will be the map for the future and a benchmark for Purcellville's progress. 

The future of every community lies in capturing the passion, 
energy and imagination of its own people.  
-Dr. Ernesto Sirolli