Boise Retail Potential Prepared for Boise Redevelopment Agency

              JUN 1983
BOISE REDEVELOPMENT AGENCY
BOISE RETAIL POTENTIAL
Prepared for
BOISEREDEVELOPMENT
AGENCY
Keyser Marston Associates, Inc.
Reproduced from the Boise State University Library, Special Collections. MSS 250
BOISE RETAIL POTENTIAL
Prepared for
BOISE REDEVELOPMENT AGENCY
June 1983
Keyser Marston Associates, Inc.
230 California Street, Suite 601
San Francisco, California 94111
and
617 South Olive Street, Suite 707
Los Angeles, California 90014
Reproduced from the Boise State University Library, Special Collections. MSS 250
TABLE OF CONTENTS
Summary of Findings and Conclusions
Introduction
Section I
Section II
Appendix
Trade Area
Retail Market Potential
iv
1
5
Reproduced from the Boise State University Library, Special Collections. MSS 250
SUMMARY OF FINDINGS AND CONCLUSIONS
This analysis was prepared for the Boise Redevelopment Agency.
It assesses the market potential for department stores and mall
shop space in Boise.
Department Store Opportunities
1. The trade area consists of 342,500 persons. Of this,
181,500 persons or 53% reside in the primary trade area,
which is Ada County. The primary trade area population is
heavily concentrated in the metropolitan Boise area, and
represents 80% of the sales potential available to depart-ment
stores and mall shop space in Boise.
2. The sales potential available to department stores in Boise
is estimated to be $131 million in 1983, increasing to $149
million by 1990. This would support 820,000 sq. ft. of
department store space in 1985 and 930,000 sq. ft. in 1990.
3. Department stores that currently serve the market are The
Bon, Sears, and Penney's, a total of 215,000 sq. ft., as
well as other smaller department stores and discount stores
such as The Mode, Bazaar and K-Mart stores. Based upon this
inventory, the market is currently underserved.
In assessing the opportunities for the development of new depart-ment
stores in regional centers in Boise, several alternatives
were examined to ascertain what effect each would have on the
Boise market. The alternatives were:
1) A downtown center with The Bon, Nordstrom and a third store,
totaling approximately 320,000 sq. ft. The sales area now
in The Bon is 79,000 sq. ft., so the new square footage is
241,000 sq. ft.
2) A downtown center with The Bon, Nordstrom and two additional
stores, totaling approximately 420,000 sq. ft.
3) A suburban center with Phase I opening by 1985 with Pen-ney's,
Sears and ZCMI, totaling approximately 445,000 sq.
ft., and three additional stores totaling 225,000 sq. ft.
with Phase II opening by 1990.
Based upon this analysis, a four department store center would
make the downtown the principle retail focus in the metropolitan
area and pre-empt the threat of a major suburban center. It
would receive 50% of the 1985 department store sales potential
and 45% of the 1990 potential. The retail drawing power of such
a center could provide the incentive for existing major downtown
i
Reproduced from the Boise State University Library, Special Collections. MSS 250
retailers, such as Sears, to stay in the downtown if they do not
relocate into the center. This would increase the share of
downtown department store sales in major stores to over 60% of
the potential in 1985 and 55% in 1990. With a center of this
size, new department stores entering the Boise market will iden-tify
the downtown as the preferred location because it is the
principal retail focus. Also, all four department stores do not
need to be built at one time, but three of the four stores should
be in the first phase.
If a downtown center has three department stores with approxi-mately
320,000 sq. ft. and is not designed for expansion, there
will be adequate department store sales potential by 1990 to
support three and possible four more stores. This is sufficient
to justify another center. In effect, what would exist would be
a retail environment with multiple regional shopping nodes with
neither being the principal focus. This is the case with many
California markets, such as the Los Angeles metropolitan area.
Finally, if a suburban center is developed first with site pads
for six department stores, the analysis indicates that by 1990
over 70% of the department store sales would be spent at this
center. Thus, even if the center is developed in phases, re-tailers
will recognize the ultimate retail dominance of this
center when it is fully developed. This dominance would preclude
the downtown as a principal retail center and cause the proposed
regional center not to be feasible due to lack of interest by
department stores to make a major investment in a new store in
the downtown.
Mall Shop Opportunities
Concerning the apparel and specialty retail mall shop space in
regional centers, it is our experience in a market the size of
the one served by Boise that there is market support to serve no
more than 350,000 sq. ft. There are several reasons including:
1) This much space would receive an estimated 50% of the
1985 sales potential for such space, which is a sub-stantial
share when it is considered that this sales
potential serves all apparel and specialty retail
stores throughout the total Boise market; and
2) There is a limited number of mall shop tenants that can
afford the occupancy costs, as evidenced by the-many
mall shop tenants that are national chains and are seen
repeatedly in centers throughout the country.
Thus there is sufficient sales potential to support one super-regional
center or two smaller centers. However, a regional
shopping center developer will use his best efforts to maximize
the mall shop space as well as department stores to eliminate
future competition. This not only protects but enhances the
value of his investment.
ii
Reproduced from the Boise State University Library, Special Collections. MSS 250
Summary
The recommended square footage in order to have downtown be the
principal retail focus in the metropolitan area and to maximize
the opportunity for success of a new center is to have four
department stores. The gross leaseable area of the center should
be at least 700,000 sq. ft., which includes about 250,000 sq. ft.
for mall shop space. Three of the four stores should be built in
the first phase. If the center has three stores and is not able
to expand at a later date, there will be sufficient department
stores sales potential by the late 1980's to support another
center. A four store center in the downtown substantially re-duces
the risk of a competitive center. Furthermore, with this
size center, existing major stores in the downtown, such as
Sears, would have the incentive to continue operating their
store, if they do not relocate to the center, instead of building
a new store in the suburbs. In conclusion, a four department
store center ensures a strong downtown retail.
iii
Reproduced from the Boise State University Library, Special Collections. MSS 250
INTRODUCTION
This report was prepared for the Boise Redevelopment Agency and
assesses the market opportunities for department store space and
mall shop space in Boise.
The organization of the report is as follows:
I. Trade Area
This section discusses the principal source of market sup-port
for department store and mall shop space in Boise. The
trade area is divided into primary and secondary zones to
reflect the differing penetration levels retail facilities
have within the region.
II. Retail Market Potential
This section discusses the sales available to department
stores and mall shops in Boise. Based on this potential and
current retail activities, conclusions are made in regard to
the development opportunities for department store and re-gional
center mall shop space in Boise.
iv
Reproduced from the Boise State University Library, Special Collections. MSS 250
SECTION I
TRADE AREA
The following section presents a summary of the trade area used
to determine market opportunities for department store and mall
space in Boise. Department stores usually draw trade from a
relatively large geographical area since shoppers tend to compare
quality and the price of merchandise. Because of this the deter-mination
of the trade area is based upon many factors such as:
population distribution and concentration, distance in driving
time, convenience of access, and the strength of existing compe-titive
retail facilities. Based on these factors the trade area
is divided into primary and secondary trade areas to reflect the
differing penetration levels retail facilities have within the
region.
Primary Trade Area
The primary trade area for department stores in Boise is Ada
County. Almost 80% of the population in Ada County is concen-trated
in the metropolitan Boise area constituting the largest
source of market support for department stores in Boise.
Population
The 1983 population in the primary trade area, as shown below in
Table 1, is estimated to be 181,560 persons. The total popula-tion
of the primary trade area is expected to continue to grow
but at a slower pace than the 4.7% annual rate experienced since
1970. By 1990, the population is projected to be 223,740 per-sons,
which represents a 3.3% annual increase over the next seven
years. Approximately 75% of the population increase is in the
metropolitan Boise area.
Ada County
Source:
Table 1
Population Projections
Primary Trade Area
1970 - 1990
1970 1983 1985
112,230 181,560 206,220
Bonneville Power Administration
Ada Planning Association 1980 Census
Keyser Marston Associates, Inc.
-1-
1990
223,740
Reproduced from the Boise State University Library, Special Collections. MSS 250
Per Capita Income
Table 2, shows the comparative 1983 per capita income levels for
the trade area and for the State of Washington. These per capita
income levels represents a preliminary step in computing the per
capita retail expenditures since these vary approximately in
proportion to income. The per capita income level for the State
of Washington is being used because 1) expenditure data is readi-ly
available, 2) the per capita income levels are similar with
the State of Idaho, and 3) Washington and Idaho have similar
expenditure patterns for retail goods.
Table 2
Estimated
Per Capita Income
State of Washington
State of Idaho
Primary Trade Area
Sources: Urban Decision Systems
Shorett and Reily
Keyser Marston Associates, Inc.
1983
$ 9,980
$ 9,690
$12,115
Index
100
97
122
As the table indicates the per capita income levels for Washing-ton
and Idaho are similar, $9,980 and $9,690 respectively. The
primary trade area, Ada County, shows a sharp increase in the per
capita income at $12,115, due to the highly urbanized metropoli-tan
Boise area.
Secondary Trade
The secondary trade area incorporates the seven counties that
surround Ada County, the primary trade area. For the purpose of
this analysis, three secondary trade areas have been identified.
These trade areas have been separately identified due to dif-fering
geographic location and trade area penetration. Occa-sional
support could be expected from shoppers residing beyond
the secondary trade area. However, due to the physical distance,
they are excluded in this analysis.
Population
The 1983 population in the secondary trade area, shown in Table
3, is estimated to be 160,990 persons.
-2-
Reproduced from the Boise State University Library, Special Collections. MSS 250
The total population of the secondary trade area is expected to
continue to grow but at a slower pace than the 3.0% annual rate
experienced since 1970. By 1990, the population is projected to
be 180,450 persons, which represents a 1.7% annual increase over
the next seven years. Canyon County adjacent directly west of
the primary trade area, accounts for over 50% of the secondary
trade area population. In fact, 80% of the secondary trade area
population is to the north and west of Boise, in Canyon, Gem,
Payette and washington Counties.
Table 3
Population Projections
Secondary Trade Area
1970 - 1990
1970 1983
Secondary (A) Trade Area 61,290 88,000
Canyon County 61,290 88,000
Secondary (B) Trade Area 19,240 26,210
Boise county 1,760 3,210
Elmore County 17,480 23,000
Secondary (C) Trade Area 35,840 46,780
Gem County 9,390 12,000
Owyhee County 6,420 8,800
Payette County 12,400 16,400
washington County 7,630 9,580
Secondary Trade Area 116,370 160,990
Sources: Bonneville Power Administration
Shorett and Reily
Keyser Marston Associates, Inc.
Per Capita Income
1990
90,870 99,100
90,870 99,100
27,375 29,275
3,350 3,400
24,025 25,875
48,250 52,075
12,125 14,500
9,150 9,575
16,875 17,775
10,100 10,800
166,495 180,450
Table 4, on the next page, shows the comparative 1983 per capita
income levels for the three secondary trade areas and for the
State of Washington.
As stated before, these per capita income levels represent a pre-liminary
step in computing the per capita retail expenditure
-3-
Reproduced from the Boise State University Library, Special Collections. MSS 250
since these vary approximately in proportion to income. Expendi-ture
data for Washington is being used for the reasons mentioned
in the primary trade area section.
Table 4
Estimated
Per Capita Income
State of Washington
Secondary (A) Trade Area
Secondary (B) Trade Area
Secondary (C) Trade Area
Sources: Urban Decision Systems
Shorett and Reily
Keyser Marston Associates, Inc.
1983 Index
$9,980 100
$9,537 96
$8,451 85
$8,176 82
As the table indicates the per capita income levels for the three
secondary trade areas are below that of the State of Washington.
The secondary trade areas, A, B, and C have per capita income
levels of $9,537, $8,451 and $8,176 respectively compared to
$9,980 for washington.
Summary
The population in the trade areas is expected to increase at an
annual rate of 2.5% during the next seven years, representing a
increase from, 342,490 to 404,195 persons. Approximately 70% of
this increase will be in the primary trade area.
Comparing per capita income levels between the primary and secon-dary
trade areas, there is a substantial difference. The primary
trade area income level is $3,150 above that of the secondary
trade area. This sizeable difference is due to the metropolitan
Boise Area, a highly urbanized area in comparison to the sur-rounding
counties.
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Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 5
ESTIMATED 1983 DSTM
PER CAPITA EXPENDITURES
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM
Per Capita Income (4/83)
DSTM % of Income
State of
Washington
$ 510
110
215
195
380
$1,410
$9,970
14.1%
Source: State Board of Equalization
Urban Decision Systems
Keyser Marston Associates, Inc.
(5)
State of
California
$ 520
40
220
185
455
$1,420
$9,910
14.3%
Reproduced from the Boise State University Library, Special Collections. MSS 250
SECTION II
RETAIL MARKET POTENTIAL
In this section, the sales potential available to department
stores is estimated, followed by a determination of the amount of
department store square footage that can be supported by the
trade area. Sales potential for apparel and specialty retail is
also examined with emphasis placed on mall shop space found in
regional centers. Based upon these findings conclusions are then
drawn as to the development opportunities for department store
and regional center mall shop space in Boise.
Per Capita DSTM Expenditures
DSTM refers to department store-type merchandise, or the major
merchandise lines carried in department stores including all the
apparel lines, furniture, appliances, household items, and a
range of other specialty items such as jewelry, gifts, books, and
sporting goods. These same lines are also carried in more spe-cialized
stores such as junior department stores (which carry
only the soft lines- no furniture or appliances), discount and
catalog stores (which are strong on small appliances), and, of
course, clothing stores, furniture stores, etc.
The 1983 DSTM expenditures for the trade area are estimated by
using DSTM expenditures for the State of Washington shown in
Table 5. The State of Washington is used because of readily
available data and because of similar retail expenditure pat-terns.
As a further crosscheck, the DSTM expenditures for Wash-ington
and California are compared in the table, and they are in
agreement, $1,410 and $1,420.
The per capita expenditures are then adjusted to reflect the
income differential between the trade area and Washington.
Table 6
Per Capita DSTM Expenditures
Primary and Secondary Trade Areas
1983
State of washington $1,410
Primary Trade Area $1,720
Secondary (A) Trade Area $1,340
Secondary (B) Trade Area $1,200
Secondary (C) Trade Area $1,155
Source: Keyser Marston Associates, Inc.
-5-
Index
100
122
96
85
82
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 7
ESTIMATED DSTM
EXPENDITURE POTENTIAL
(In constant 1983 dollars)
1983
Primary Trade Area<l (000's)
General Merchandise
Department Stores $112,565
Other General Merchandise 24,510
Apparel 47,205
Furniture and Appliances 43,575
Specialty Retail 84,425
Total $312,280
Secondary Trade Area<2 (000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total
Total Trade Area (000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total
1) Appendix Table 1.
$73,725
15,810
31,075
28,090
54,700
$203,400
$186,290
40,320
78,280
71,665
139,125
$515,680
2) Appendix Tables 2, 3, and 4.
Source: Keyser Marston Associates, Inc.
(6)
1985
$129,920
28,870
54,650
50,525
97,955
$361,920
$77,905
16,800
32,965
29,880
57,405
$214,955
$207,825
45,670
87,615
80,405
155,360
$576,875
1990
$147,670
32,440
62,645
57,055
111,870
$411,680
$88,585
19,120
37,550
34,205
65,440
$244,900
$236,255
51,560
100,195
91,260
177,310
$656,580
Reproduced from the Boise State University Library, Special Collections. MSS 250
As seen in Table 6, the estimated 1983 per capita expenditure for
the residents of Washington is $1,410. Applying a factor of 122%
to $1,410 for a higher level of income results in a 1983 per
capita DSTM expenditure for the primary trade area of approx-imately
$1,720. The 1983 per capita DSTM expenditure for the
three secondary trade areas are $1,340, $1,200 and $1,155, using
a 96%, 85%, and 82% income adjustment factor.
Trade Area Retail Potential
Total retail sales potential in the trade area is the product of
population and the estimated per capita expenditures as discussed
above. Table 7 indicates the total potential retail expenditures
by residents of primary and secondary trade areas. The expendi-tures
set forth in the table includes spending to be done in
existing and new stores located both in and beyond the trade
area.
The total DSTM expenditures are estimated to be over $515 million
in 1983, increasing to over $656 million by 1990. These esti-mates
are in constant 1983 dollars.
Potential Available to Department Stores
The potential department stores expenditures that are available
to stores in Boise are estimated in Table a. The market shares
of the expenditure potential projected to be spent in the trade
area are estimated and they are based upon population distribu-tion
and concentration in the trade areas, convenience of access
to Boise and the relative strength of competing department stores
serving the primary and secondary trade areas. In estimating the
available expenditures, an 80% market share was used for the
primary trade area. The reason is that the primary trade area
will continue to experience some leakage of sales to other major
retail centers such as Portland and Salt Lake City. The popula-tion
residing in the secondary trade area due to the greater
distances and driving times, and the presence of other retail
locations, will be somewhat less influenced by retail estab-lishments
in Boise. As a result, the market shares for the three
secondary trade areas range from 25% to 40%.
As can be seen in Table 8, the 1983 sales potential available to
department stores is estimated to be $131 million in 1983. The
potential expenditure is expected to increase to $149 million by
1990, in constant 1983 dollars.
Department Store Market Opportunities
In determining the support available for department stores, a
residual analysis is used. This analysis calculates the total
square footage of department store space that can be supported
which is derived by dividing the sales potential by a sales
productivity level of $160 per square foot, the industry standard
for new department store space. The resulting number is the
-6-
Reproduced from the Boise State University Library, Special Collections. MSS 250
1985 Potential (000's)
Primary Trade Area
Secondary Trade Area
(A)
(B)
(C)
Total
1990 Potential (000's)
Primary Trade Area
Seoondary Trade Area
(A)
(B)
(C)
Total
1) Table 7
Table 8
ESTIMATED AVAILABLE
DEPARTMENT STORE POTENTIAL
(In constant 1983 dollars)
Estimated capture
Potential (1 Rate
$129,920 80%
44,980 40%
12,180 33%
20,745 25%
$207,825
$147,670 80%
51,535 40%
13,615 . 33%
23,435 25%
$235,955
Source: Keyser Marston Associates, Inc.
(-7-)
Estimated Available
Expenditure Potential
$103,935
17,990
4,020
5,185
$131,130
$118,135
20,615
4,490
5,860
$149,100
Reproduced from the Boise State University Library, Special Collections. MSS 250
square footage that could be supported. Then from the square
footage supported, deductions are made for alternative develop-ment
scenarios. These scenarios evaluate three, four and six
department store centers and how much of the demand (residual
demand) there is for additional department space, which includes
stores in possibly another regional center or a free-standing
store, such as a discount store, or a store such as The Mode.
The residual demand provides an indicator of the level of compe-tition.
The alternative plans are:
1) A downtown center with The Bon, Nordstrom and a third store,
totaling approximately 320,000 sq. ft.
2) A downtown center with The Bon, Nordstrom and two additional
stores, totaling approximately 420,000 sq. ft.
3) A suburban center with Phase I opening by 1985 with Pen-ney's,
Sears and ZCMI, totaling approximately 445,000 sq.
ft., and three additional stores totaling 225,000 sq. ft.
with Phase II opening by 1990.
The sales potential available to department stores in Boise is
estimated to be $131 million in 1983, increasing to $149 million
by 1990. Using $160 per square foot sales productivity level,
the trade area can support 820,000 sq. ft. of department store
space in 1985, and 930,000 sq. ft. in 1990. Under alternative
no. 1, shown in Table 9, a 320,000 sq. ft. downtown center will
leave enough residual support for 500,000 to 600,000 sq. ft. of
department store space by the late 1980's. This will be adequate
support for another center of at least three and possibly a four
department stores by 1990. This means that there would ul-timately
be two centers and they will create a bi-nodal effect,
with neither the downtown nor the suburban center achieving
retail dominance. A four department store center may achieve
actual dominance depending upon the strength of the major stores.
Alternative no. 2, shown in Table 10, indicates enough demand to
support 400,000 to 500,000 sq. ft. of department store space by
the late 1980's. Taking into consideration that this demand also
serves discount store space, it is possible that there will be
enough support for a two, and possibly a three, department store
center by 1990 with a total gross leaseable area of 400,000 to
500,000 sq. ft. However, a four department store center, which
would have 700,000 sq. ft. of gross leaseable area, will have the
effect of creating a major retail identity for downtown and be
the major retail center in the urban area.
Under alternative no. 3, shown in Table 11, a suburban center
with 670,000 sq. ft. will achieve retail dominance in the Boise
area and be perceived as the principal retail center. The ulti-mate
dominance of this center by 1990 will discourage department
stores from being interested in locating downtown. A suburban
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Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 9
RESIDUAL ANALYSIS
OF DEPARTMENT STORE SPACE
ALTERNATIVE 1: Downtown Center with The Bon,
Nordstrom and a third store
Total Trade Area
Expenditure Potential(l ($000's)
Square Footage Warranted
@ $160/SF(2
Less: Three Department
Store Center
Square Footage of Department Store
and Discount Store Space Supported
by the Remaining Sales Potential
1) Table 8
1985
$131,130
820,000 SF
320,000 (3
500,000 SF
1990
$149,100
930,000 SF
320,000 (3
610,000 SF
2) Based on industry sources for new department store centers.
3) 320,000 sq. ft. is 39% of 1985 total and 34% of 1990 total.
Table 10
RESIDUAL ANALYSIS
OF DEPARTMENT STORE SPACE
ALTERNATIVE 2: Downtown Center with The Bon,
Nordstrom and a two additional stores
Total Trade Area
Expenditure Potential(l ($000's)
Square Footage Warranted
@ $160/SF(2
Less: Four Department Store Center
Square Footage of Department Store
and Discount Store Space Supported
by the Remaining Sales Potential
1) Table 8
1985
$131,130
820,000 SF
420,000 (3
400,000 SF
1990
$149,100
930,000 SF
420,000 <3
510,000 SF
2) Based on industry sources for new department store centers.
3) 420,000 sq. ft. is 51% or 1985 total and 45% of 1990 total.
Source: Keyser Marston Associates Inc.
(-8-)
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 11
RESIDUAL ANALYSIS
OF DEPARTMENT STORE SPACE
ALTERNATIVE 3: Suburban Center with Phase I opening by 1985 with
Penney's, Sears and ZCMI and Phase II by 1990 with
three additional stores.
Total Trade Area
Expenditure Potential (l($000's)
Square Footage Warranted
@ $160/SF(2
Less: Suburban Center
Square Footage of Department Store
and Discount Store Space Supported
by the Remaining Sales Potential
1) Table 8
1985 1990
$131,130 $149,100
820,000 SF 930,000 SF
44 5 ,000 (3 670,000 <4
375,000 SF 260,000 SF
2) Based on industry sources for new department store centers.
3) Store sizes are: Penney's 125,000 sq. ft., Sears 120,000
sq. ft. and ZCMI 200,000 sq. ft.
4) 670,000 sq. ft. is 72% of the 1990 total.
Source: Keyser Marston Associates Inc.
-8-
Reproduced from the Boise State University Library, Special Collections. MSS 250
1985 Potential (000's)
Primary Trade Area
Secondary Trade Area
(A)
(B)
(C)
Total
1990 Potential (000's)
Primary Trade Area
Secondary Trade Area
(A)
(B)
(C)
Total
1) Table 7
Table 12
ESTIMATED AVAILABLE
APPAREL AND SPECIALTY RETAIL POTENTIAL
(In constant 1983 dollars)
Estimated capture Estimated Available
Potential(! Rate Expenditure Potential
$152,605 80% $122,085
52,250 40% 20,900
14,235 33% 4,695
23,885 25% 5,970
$242,975 $153,650
$174,515 80% $139,610
59,955 40% 23,980
15,955 33% 5,265
27,080 25% 6,770
$277,505 $175,625
Source: Keyser Marston Associates, Inc.
(-9-)
Reproduced from the Boise State University Library, Special Collections. MSS 250
center will leave demand for only 260,000 sq. ft. which, after
taking into consideration existing discount stores, leaves insuf-ficient
potential to support a downtown enclosed regional mall.
In summary, the recommended approach to creating a retail center
downtown is a four department store center. A four department
store center will have two effects: 1) it will create the criti-cal
mass necessary to make downtown the major retail center in
Boise and 2) it will prevent the threat of a major suburban
center.
Mall Shop Apparel and Specialty Retail Support
In calculating potential for mall shop space, a market share
analysis is used. The analysis differs from that of a residual
analysis by using projected sales for the mall space to calculate
a market share. This market share is then evaluated based upon
current retail conditions as to whether it is achievable.
As seen in Table
residents have a
million in 1985.
million by 1990.
12, the primary and secondary trade area
combined expenditure potential of over $153
The potential is expected to increase to $175
using these expenditure potentials, we have calculated market
shares that a downtown mall and a suburban mall would need to
achieve. Based on industry average, we estimate that approxi-mately
80% of the mall space will be devoted to apparel and
specialty retail use. To calculate their sales volume, a sales
productivity level of $225 per square foot is used, which is
based upon industry sources for new mall shop space.
we estimate that a downtown mall will have approximately 250,000
sq. ft., of which 200,000 sq. ft. (80%) will be used for apparel
and specialty retail. For this increment of space, the market
share requirement for $45 million in sales is estimated at 29% of
total potential in 1985, and 26% by 1990. A suburban mall with
350,000 sq. ft., of which 280,000 sq. ft. will be used for ap-parel
and specialty retail, will have estimated sales of $63
million. At this sales volume, a 41% market share will be needed
in 1985, declining to 36% by 1990. If both centers are con-structed,
480,000 sq. ft. of apparel and specialty retail mall
shop space will require a market share of 70% in 1985.
The market shares for either the downtown or suburban mall, but
not both, are achievable in a market the size of this one. In
our judgment, this market will support approximately 350,000 sq.
ft. of regional center mall shop space for apparel and specialty
retail tenants. There are several reasons for this conclusions,
such as:
1) This much space would receive an estimated 50% of the 1985
sales potential for such space (350,000 sq. ft. at $225 per
-9-
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 13
APPAREL AND SPECIALTY RETAIL
ESTIMATED MARKET SHARE
1985
Total Available
Expenditure Potential(! ($000's) $153,650
Downtown Center Mall 200,000
Estimated Sales @ $225/SF(2 ($000's) $45,000
Market Share 29%
Suburban Center Mall 280,000
Estimated Sales @ $225/SF(2 ($000's) $63,000
Market Share 41%
Total Mall Space 480,000
Estimated Sales @ $225/SF(2 ($000's) $108,000
Market Share 70%
1) Table 12
2) Industry average for mall shop space.
Source: Keyser Marston Associates, Inc.
(-10-)
1990
$175,625
SF 200,000 SF
$45,000
26%
s F 280,000 SF
$63,000
36%
SF 480,000 SF
$108,000
61%
Reproduced from the Boise State University Library, Special Collections. MSS 250
square foot is $78,750,000 and this is 51% of the
$153,650,000 of sales potential shown in Table 12). A 50%
market share is a substantial share when it is considered
that this sales potential serves all apparel and specialty
retail stores throughout the total Boise market; and
2) There is a limited number of mall shop tenants that can
afford the occupancy costs, as evidenced by the many mall
shop tenants that are national chains and are seen repeated-ly
in centers throughout the country.
Thus there is sufficient sales potential to support one super-regional
center or two smaller centers. However, a regional
shopping center developer will use his best efforts to maximize
the mall shop space as well as department stores to eliminate
future competition. This not only protects but enhances the
value of his investment.
-10-
Reproduced from the Boise State University Library, Special Collections. MSS 250
APPENDIX
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 1
DSTM POTENTIAL
PRIMARY TRADE AREA(!
(In Constant 1983 Dollars)
Per Capita Expenditure
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTf>I(2
Trade Area Population
1983
$ 620
135
260
240
465
$1,720
181,560
Total Sales Potential ($000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
1) Trade area is Ada County.
$112,565
24,510
47,205
43,575
84,425
$312,280
1985
$ 630
140
265
245
_ ___!li
$1,755
206,220
$129,920
28,870
54,650
50,525
97,955
$361,920
1990
$ 660
145
280
255
500
$1,840
223,740
$147/670
32,440
62,645
57,055
111,870
$411,680
2) Department store type merchandise. In 1983 dollars, increased
at 1% per year to reflect increases in real income.
Source: Keyser Marston Associates, Inc.
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 2
DSTM POTENTIAL
SECONDARY {A) TRADE AREA(l
(In Constant 1983 Dollars)
Per Capita Expenditure
General Merchandise
Department stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
Trade Area Population
1983
$ 485
105
205
185
360
$1,340
88,000
Total Sales Potential ($000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
$42,680
9,240
18,040
16,280
31,680
$117,920
1) Trade area is Canyon County.
1985
$ 495
110
210
190
365
$1,370
90,870
$44,980
9,995
19,080
17,265
33,170
$124,490
1990
$ 520
115
220
200
385
$1,440
99,100
$51,535
11,395
21,800
19,820
38,155
$142,705
2) Department store type merchandise. In 1983 dollars, increased
at 1% per year to reflect increases in real income.
Source: Keyser Marston Associates, Inc.
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 3
DSTM POTENTIAL
SECONDARY (B) TRADE AREA(l
(In Constant 1983 Dollars)
Per Capita Expenditure
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM{2
Trade Area Population
Total Sales Potential ($000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
1983
$ 435
90
185
165
325
$1,200
26,210
$11,400
2,360
4,850
4,325
8,520
$31,455
1985
$ 445
90
190
170
330
$1,725
27,375
$12,180
2,465
5,200
4,655
9,035
$33,535
1) Trade area is Boise and Elmore Counties.
1990
$ 465
95
200
180
345
$1,285
29,275
$13,615
2,780
5,855
5,270
10,100
$37,620
2) Department store type merchandise. In 1983 dollars, increased
at 1% per year to reflect increases in real income.
Source: Keyser Marston Associates, Inc.
Reproduced from the Boise State University Library, Special Collections. MSS 250
Table 4
DSTM POTENTIAL
SECONDARY (C) TRADE AREA(l
(In Constant 1983 Dollars)
Per Capita Expenditure
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
Trade Area Population
Total Sales Potential ($000's)
General Merchandise
Department Stores
Other General Merchandise
Apparel
Furniture and Appliances
Specialty Retail
Total DSTM(2
1983
$ 402
90
175
160
310
$1,155
46,780
$19,645
4,210
8,185
7,485
14,500
$54,025
1985
$ 430
90
180
165
315
$1,180
48,250
$20,745
4,340
8,685
7,960
15,200
$56,930
1990
$ 450
95
190
175
330
$1,240
52,075
$23,435
4,945
9,895
9,115
17,185
$64,575
1) Trade area is Gem, Owyhee, Payette and washington Counties.
2) Department store type merchandise. In 1983 dollars, increased
at 1% per year to reflect increases in real income.
Source: Keyser Marston Associates, Inc.
Reproduced from the Boise State University Library, Special Collections. MSS 250