Small business losing battle against big boxes (AUDIO)

How can city’s increase their downtown shopping districts from the current average of two percent of sales?

By: Benjamin J. Gohs, News Editor
(231) 222-2119

How can city’s increase their downtown shopping districts from the current average of two percent of sales?

Planner Robert Gibbs gave a presentation on recent retail trends entitled “Sustainable Retail: Contemporary Principles and Practices” to local merchants and economic development officials on Monday Feb. 4 at the Boyne District Library.

“Shopping in downtown is very hard,” Gibbs said. “When you develop urban retail, even in small towns like Boyne City, you have to do three things: you have to get people to the downtown on a regular basis; you have to get them into the stores and you have to get them to buy something they don’t need.”

Gibbs said the challenge is that 91 percent of your paycheck is spent before you ever get it.

“You only have four percent leftover for clothing and only five percent leftover for dining out,” Gibbs said. “And, if gas prices go up or you don’t get overtime that week then people stop shopping.”

Gibbs said the average person has four years worth of clothing in their closet. This prompts retailers to resort to gimmicks to get people to shop.

According to Gibbs, Boyne City’s shopping district falls within the national average.

“All shopping malls and all shopping streets tend to be about a thousand feet long—Water Street, your shopping street, is about a thousand feet long,” Gibbs said.

Gibbs said a vibrant downtown needs what he called “anchor” businesses to help retain other businesses.

“In South Hampton they had a shopping street and they were anchored with a library, with a post office and with a grocery store,” he said. “When they lost those three anchors people stopped coming downtown on a regular basis; they drove out to the edge of town and sales dropped very quickly.”

Gibbs said whenever you researched the cause of the decline of a downtown it is almost always because they lost their anchors.

“Our philosophy is that downtowns should sell the goods and services desired and needed by their community,” he said. “Ideally we’d like you to do 70 to 80 percent of your shopping downtown.”

Gibbs said the downtown should sell the price point that meets the area’s demographics.

Gibbs said if Petoskey is going to remain sustainable, JC Penny needs to find a way to build a new store downtown and not out by Walmart.

“The most sustainable thing you can do is keep your stores downtown,” he said. “When we talk about what kinds of retailers you should have in the downtowns we conduct focus groups, and the focus groups always tell us the same thing: I do not want any national chains in my downtown. I want stores that nobody has ever heard of in my downtown.”

Big chain stores account for 37 percent of sales.

Malls account for 31 percent of sales.

Downtowns only account for two percent of sales.

“In 1960 downtowns had 80 percent of the market share. We are trying in the new urbanism to get that up to 25 percent,” Gibbs said. “They still have 80 percent in New Zealand and Australia—they still have car dealers and department stores and anything you need downtown.”

Gibbs said the average sales per square-foot per year is $275. This number is arrived at by dividing your store’s square-footage by its sales.

“Restaurants average at about $400, grocery stores at about $500,” Gibbs said. “The average main street retailer only averages $80.”

Gibbs said planners who design highly ornamental, colorful facades on shopping areas and stores see lower sales.

Gibbs said the ideal percentage of national stores is no more than 25 to 30 percent.

“The local retailers are generally under-capitalized,” he said. “And, by being closed by five o’clock at night they give up about 70 percent of sales—last year 75 percent of all retail sales occurred after 5 p.m.”

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