An Analysis of Cities and Villages With Populations of 2,500 - 15,000
Bill Ryan, Jerry Braatz, and Aaron Brault*
What can we do to increase business activity in our downtown? Are there certain types of stores that make economic sense downtown given changes in consumers and competition? How significant is retail sprawl on the outskirts of our town?
One way to begin to answer these questions is to analyze the types of downtown retail businesses that are operating in other similar sized Wisconsin communities. The number and mix of businesses in comparable communities provides a snapshot of retail activity and offers a way to stimulate ideas about business expansion and recruitment.
This study analyzes the number and types of retail establishments in Wisconsin's small cities and villages. The data in this report can be used to analyze retail expansion and recruitment possibilities at the local level by comparing the current local retail mix with that of comparison communities. The analysis is useful for chambers of commerce, economic development practitioners, businesses, and local governments. Once these opportunities are identified, a community can develop a marketing plan to encourage appropriate retail development.Methodology
The first step in this analysis was to identify 125 Wisconsin cities and villages with populations between 2,500 and 15,000. Population estimates for 1997 from the Wisconsin Department of Administration were used to identify these communities. These cities and villages were then segmented into four groups:
Next, a private business database was used to identify the number and types of retail establishments in the zip code area of each of these communities. Business data was purchased from American Business Information, Inc. (ABI) that reflects 1998 estimates of retail businesses currently in operation. The ABI data was chosen for this analysis because it is updated annually, geographically coded to a specific location, and because it provides precise descriptions of the primary business category by six-digit SIC code.
Using geographic information systems (GIS), the businesses located downtown were isolated from businesses located elsewhere in the zip code area (non-downtown). For purposes of this analysis, downtown businesses were assumed to be all of those retail operations located within a 1/4 to 1/2 mile ring of the middle of the central business district. (ranging from 1/4 mile for the 2,500-5,000 communities, 3/8 mile for 5,000-7,500 7,500-10,000 communities, and 1/2 mile for the 10,000-15,000 communities).
The map that follows illustrates how downtown vs. non-downtown businesses were defined for one of the 125 communities using this ring method.
Based on the total number of retail businesses within the downtown and non-downtown areas, an average number of stores by Standard Industrial Classification (SIC) code for each population category was calculated. For example, the 63 communities in the 2,500-5,000 population category had 194 downtown restaurants or 3.1 establishments per downtown area. While some communities had more that others, the average provides a beginning for comparison.Retail Mix Analysis
Presented on four tables (Click here to see the tables) are summaries of the retail mix analysis which are tabulated by city/village population range. Retail operations have been divided into 34 general categories as defined in Appendix A. The average number and percent of total businesses are presented for the downtown and non-downtown areas represented by each of the population groups.
The downtown retail mix in all four of the population ranges tend to be concentrated in the retail categories presented below. These categories represent roughly half of all retail establishments in the downtown areas studied.
As a Percent of Total Number of Businesses
The data also provides an indication of how concentrated retail activity is in the downtown areas relative to the outlying areas of each community. In all four community size categories, the number of retailers downtown was less than half the number in the overall zip code area as presented in the following chart.
How Can the Retail Mix Analysis Benefit Your Downtown?
The retail mix analysis is a useful tool for comparing communities of similar size with each other. The retail mix analysis proves useful for chambers of commerce, economic development practitioners, businesses, and local governments to identify possible expansion and recruitment opportunities. Once these opportunities are identified, a community can develop a marketing plan to encourage appropriate retail development.
The retail mix analysis is also a useful tool for helping communities focus on potential niches. For example, a group of entrepreneurs in the City of Murphysboro, Illinois (population 9,166) identified a niche for antiques. Over a period of time, these entrepreneurs converted a group of empty storefronts in the downtown into antique shops. These businesses created a niche and developed a successful marketing effort. As a result, collectors travel from throughout the Midwest to visit the antique shops.
Businesses in the downtown area that have an interest in diversifying their retail sales will find the analysis is useful in generating ideas for product expansion. The information from the analysis will provide these retailers some idea about the types of retail to further study and potentially pursue to diversify and enhance their business.
Furthermore, the analysis will benefit individuals with an interest in starting a business. The information can provide a first step for these individuals and help them study and learn more about what types of stores exist in other towns. Property owners can also utilize this same information to help them market their empty storefronts by sharing the information from the analysis with potential businesses that are interested in a downtown location.
When using the analysis it proves important to remember that each community is unique and different. The analysis is not a perfect science. It only indicates what other downtown communities look like, from a retail mix perspective, and not what is optimal. The retail mix analysis does not include the service businesses which are important for many downtown's. In addition, location, community attractions, and market size all have an impact on the types of retail businesses that are located in a community.
The first step in this type of analysis is to conduct an inventory of the different types of retail establishments within a 1/4, 3/8, or 1/2 mile ring of the middle of downtown. Appendix A provides detailed descriptions of all of the retail categories used. The next step is to use the worksheet on the following page to compare the number of stores and percent mix in the community's downtown with downtown averages from communities of similar size throughout the state. Comparison averages are presented on the "Retail Stores Per Community" tables presented earlier. The results of the analysis should generate some discussion and help a community identify some of their needs and begin the process of formulating goals, objectives, and recommendations to enhance the retail mix downtown.
Building Materials and Supply (SIC 521,523) This category includes establishments primarily engaged in selling lumber, or lumber and a general line of building materials, to the general public. While these establishments may also sell to contractors, they are known as retail in the trade, even if sales to contractors account for a higher proportion of the sales. Hardware is often an important line of retail lumber and building materials dealers. Also included in this group are home centers. These are retail establishments that sell both lumber and building materials and hardware. These establishments are engaged in selling paint, glass, and wallpaper, or any combination of these lines, to the general public. Also included are plumbing supplies, concrete, and insulation materials for lumber yards.
Hardware Stores (SIC 525) This category includes establishments primarily engaged in selling a number of basic hardware lines, such as tools, builders' hardware, locks and other security hardware, paint and glass, housewares, household appliances, cutlery, and building materials, no one of which accounts for 50 percent or more of the sales of the establishments.
Lawn/Garden Shops (SIC 526) This category includes establishments primarily engaged in selling trees, shrubs, other plants, seeds, bulbs, mulches, soil conditioners, fertilizers, pesticides, garden tools, and other garden supplies to the general public. This classification also includes lawn and garden equipment, garden centers, landscaping supplies, lawn mowers, sprinklers, snow removal equipment, and small gas engines.
Mobile Homes (SIC 527) This category includes mobile home dealers and equipment and parts sales.
Department, Variety and Miscellaneous General Merchandise Stores (SIC 531,533,539) This category includes retail stores with a diverse product line, having sales of apparel and soft goods combined amounting to 20 percent or more of total sales, and selling each of the following groups of merchandise: household linens, dry goods, furniture, home furnishings, appliances, radio and TV sets; and a general line of apparel for the family. Also included are establishments primarily engaged in the retail sale of a variety of merchandise in the low and popular price ranges and establishments primarily engaged in the retail sale of a general line of apparel, dry goods, hardware, housewares or home furnishings, groceries, and other lines in limited amounts.
Food- Grocery Stores (SIC 541) This category includes full-line food establishments primarily selling food items for consumption at home. This also includes delicatessens for carryout or take home consumption.
Food-Convenience (SIC 541103) Many convenience stores operating in conjunction with a gas station will be coded here. Establishments selling convenience store items but primarily selling gasoline are classified under 554130.
Specialty Food Stores (SIC 543, 544, 545, 546, 549) This group contains specialty food stores that focus on one or a combination of the following: meat and fish, fruits and vegetables, candy and nuts, dairy products, retail bakeries, miscellaneous foods such as spices, coffee, health foods, Mexican and oriental food, espresso, etc.
Auto/Truck (SIC 551-552) This category includes both new and used auto and truck dealerships.
Auto/Home Supply Stores (SIC 553) This category includes establishments primarily engaged in the retail sale of auto supplies such as automotive batteries, parts, accessories; and sundry supplies such as polishes, paint, and decorative items. Also included are establishments primarily engaged in the retail sale of new automotive tires and tubes and establishments primarily engaged in selling a combination of lines such as tires, batteries and accessories; household appliances; sporting goods; housewares and hardware. These differ from tire, battery, and accessory stores in that, although the largest merchandise line sales may be in automotive parts, accessories, and repairs, a considerable amount of sales also are made in nonautomotive lines.
Gasoline Service Stations (SIC 554) This category includes establishments primarily engaged in selling gasoline and automotive lubricants. These establishments frequently sell other merchandise such as tires, batteries, accessories, and other automobile parts or perform minor repair work. Gasoline stations combined with other activities such as grocery stores, convenience stores, or car washes are classified based on primary activities as determined by sales. Gasoline/Convenience food stores that are primarily engaged in selling of gasoline are included in this category. Other such establishments are truck stops that operate a motel and are normally open on a 24-hour basis.
Apparel Stores and Accessories (SIC 561 562 563 564 565 569) This category includes retail stores primarily engaged in selling clothing of all kinds and related articles (except footwear) for personal wear and adornment. Not included are establishments which meet the criteria for Department Stores (SIC 531) or Miscellaneous General Merchandise Stores (SIC 539) even though most of their receipts are from the sale of apparel and apparel accessories. This includes Army and Navy goods, bridal shops, surplus & salvage merchandise, furs, & boutique items. Additionally, riding apparel, wigs & toupees, and formal wear is included.
Shoe Stores (SIC 566) This category includes establishments primarily engaged in selling men and boys' shoes, women and girl's shoes, children and infants' shoes, and other footwear. Frequently, they also sell accessories such as hosiery, gloves, and handbags. Establishments primarily engaged in selling athletic shoes for activities such as tennis, jogging, baseball, softball, basketball, boxing, racquetball, football, volleyball, etc.
Furniture Stores (SIC 5712) This category includes establishments primarily engaged in selling new household furniture, beds, mattresses, springs, and other sleep equipment. Also included in this classification are establishments selling household appliances, phonographs, radios, television sets, and floor coverings, provided the receipts from sales of furniture and sleep equipment exceed those from sales of other merchandise. Furniture warehouse showrooms, sleep shops and waterbed stores, and specialty furniture stores such as baby furniture stores, are classified here.
Home Furnishings/Floor Covering/Drapery (SIC 5713 5714 5719) This category includes establishments primarily engaged in the retail sale of rugs, carpets, linoleum, floor tile, and related products. Also included are establishments primarily engaged in selling draperies, curtains, slipcovers, and upholstery materials; and, establishments primarily engaged in the retail sale of miscellaneous home furnishings such as china, glassware, and metalware for kitchen and table use; bedding and linen; brooms and brushes; lamps and shades; mirrors and pictures; and venetian blinds and window shades.
Household Appliance Stores (SIC 572) This category includes establishments primarily engaged in the retail sale of electric and gas refrigerators, stoves, microwave ovens, home freezers, and other household appliances such as electric irons, percolators, hot plates, and vacuum cleaners, sewing machines, dehumidifiers, and self contained room air-conditioners, washers & dryers, dishwashers, garbage disposals and fans included. Many such stores also sell radios and television sets.
Radio/TV/Computer/Music Stores (SIC 573) This category includes establishments primarily engaged in the retail sale of radios, television sets, compact disc players, record players, high fidelity (hi-fi) sound reproducing equipment, and other consumer electronics equipment. Such establishments also may sell additional lines such as household appliances, computers, computer peripheral equipment, software, musical instruments, or records. Also included are establishments primarily engaged in selling phonograph records, compact discs, and prerecorded audio and video tapes and discs and establishments primarily engaged in selling musical instruments such as organs, pianos, horns, stringed instruments, and percussion instruments; sheet music; and similar supplies.
Eating Places (SIC 5812) This major group includes restaurant establishments engaged in selling prepared food and drinks for consumption on the premises. Also included are caterers, which serve prepared food other than at the place of business and lunch counters and refreshment stands selling prepared foods and drinks for immediate consumption. Cafeterias would be included in this industry, as well as ice cream & frozen yogurt shops and coffee shops.
Drinking Places (SIC 5813) This group includes businesses engaged in the retail sales of alcoholic drinks, such as beer, ale, wine, and liquor, for consumption on the premises. The sale of food frequently accounts for a substantial portion of the receipts of these establishments. Meals may or may not be served.
Drug Stores (SIC 591) This category includes establishments primarily engaged in the retail sale of prescription drugs. They may carry a number of related lines such as cosmetics, toiletries, tobacco, and novelty merchandise and may operate a soda fountain or lunch counter.
Liquor Stores (SIC 5921) This category includes establishments primarily engaged in the retail sale of packaged alcoholic beverages such as beer, ale, wine and liquor for consumption off the premises. Drinking establishments are not included in this category.
Antiques/Used Merchandise Stores (SIC 5932) This category includes establishments primarily engaged in the retail sale of used merchandise, antiques, and secondhand goods such as clothing and shoes, furniture, books, musical instruments, office furniture, etc. This category ranges from antique shops to flea markets to pawnshops. Used automobiles are not included in this category.
Sporting Goods/Bicycle Shops (SIC 5941) This category includes establishments primarily engaged in selling a general line of sporting goods, bicycles, and equipment for hunting, camping, fishing, skiing, riding, tennis, golf, and other sports; and gymnasium and playground equipment.
Book Stores (SIC 5942) Book Stores include establishments primarily engaged in selling new books and periodicals. Stationary and related items may also be sold. The subclassifications are general, specialty, and college book stores.
Office supplies (SIC 5943) This category includes office supply, stationary, stamp and map dealers.
Jewelry (SIC 5944) Establishments primarily engaged in the retail sale of any combination of the lines of jewelry such as diamonds and other precious stones; rings, bracelets, and brooches; silverware; and watches and clocks.
Hobby, Toy, Game Shops (SIC 5945) This category includes establishments primarily engaged in the retail sale of toys, games, and hobby and craft kits and supplies. Establishments primarily engaged in selling artists' supplies or collectors' items such as coins, stamps, and autographs are classified in SIC 5999.
Camera, Photographic Supply (SIC 5946) This category includes establishments primarily engaged in the retail sale of cameras, film, and other photographic supplies and equipment. Establishments primarily engaged in the retail sale of video cameras are classified in SIC 5731.
Gift, Novelty, Souvenirs Stores (SIC 5947) This category includes establishments primarily engaged in the retail sale of combined lines of gifts and novelty merchandise, souvenirs, greeting cards, holiday decorations, and miscellaneous small art goods. Included also would be collectibles, invitations, Indian goods, gift shops, and party supplies.
Luggage, Leather Goods (SIC 5948) This category includes establishments primarily engaged in the retail sale of luggage, trunks, and leather goods, except apparel.
Sewing, Needlework (SIC 5949) This category includes establishments primarily engaged in the retail sale of sewing supplies, fabrics, patterns, yarn, and other needlework accessories.
Florists (SIC 5992) This category includes establishments primarily engaged in the sale of flowers and growing plants.
Miscellaneous Stores (SIC 5993-5999) Included here are all other stores not classified elsewhere.
*Ryan is a Business Developoment Specialist with the UWEX Center for Community Economic Development. Braatz is a Community Development Educator with UWEX in Calumet County. Brault is a Geography student at UW-Madison.