1

Finding the Retail Niche

Finding the Retail Niche

October 2004

2

AgendaAgenda

Who is Buxton?

Why recruit retail?

How do you currently sell your

community?

How should you be selling your

community?

3

Customer research firm specializing in retail site selection

Over 400 years of retail experience

Analyzed virtually every type of retail concept

Over 2.5 billion square feet of analysis in 2003

Over 1,000 clients including retailers, restaurants, developers and communities

We Speak Retail!

4

EconomicDevelopment

EconomicDevelopment

6

Only recruit companies that export goods and services such as:

ManufacturingDistributionWarehousingCall CentersTourism

Traditional Economic DevelopmentTraditional Economic Development

7

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,000

Manufacturing Retail

196019701980199020002002

11.7

% o

f al

l jo

bs

11.5

% o

f al

l jo

bs

Manufacturing and Retail Trade

“Tradition” is Making Way for Reality“Tradition” is Making Way for Reality

In 1960, there were nearly three manufacturing jobs for every retail job.In 2004, retail employment now exceeds manufacturing employment.

8

Just 16 randomly selected Buxton retail clients…

Represent over 6,000 potential new locations nationwide,

Generating more than $10 billion in sales,Creating over 108,000 jobs,With a payroll exceeding $3 billion.

Retailers have to grow to survive

Reality is RetailReality is Retail

9

Increase sales and property taxes

Create new, permanent jobs

Bring new dollars into the community

Retain dollars that are currently spent outside the community

Satisfy citizens desires to shop at home

Retail is RevenueRetail is Revenue

Are you getting your fair share?

Traditional Retail Recruitment

The focus is on people, not customers

Traditional Retail Recruitment

The focus is on people, not customers

11

Age 2004 PROJ ECT ION 335,270 203,595 180,704 38,737 1999 EST IMATE 317,227 191,531 171,169 33,401 1990 CENSUS 288,000 168,911 155,053 25,170 1980 CENSUS 251,960 124,794 130,920 19,579 GROWTH 1980 - 1990 14.30% 35.35% 18.43% 28.56% 2004 PROJ ECT ION 112,977 70,933 61,090 13,189 1999 EST IMATE 106,024 66,197 57,315 11,341 1990 CENSUS 95,664 58,156 51,452 8,688 1980 CENSUS 80,666 40,242 39,015 6,626 GROWTH 1980 - 1990 18.59% 44.52% 31.88% 31.12%1999 EST IMATED POPULAT ION BY RACE 317,227 191,531 171,169 33,401 WHITE 38.25% 50.97% 35.23% 74.57% BLACK 48.93% 41.02% 58.74% 13.50% ASIAN & PACIFIC ISLANDER 0.90% 1.96% 0.74% 0.38% OTHER RACES 11.92% 6.05% 5.29% 11.55%1999 EST IMATED POPULAT ION 317,227 191,531 171,169 33,401 HISPANIC ORIGIN 18.41% 11.30% 8.96% 17.93%OCCUPIED UNITS 95,664 58,156 51,452 8,688 OWNER OCCUPIED 61.02% 62.99% 62.58% 63.00% RENTER OCCUPIED 38.98% 37.01% 37.42% 37.00% 1991 PERSONS PER HH 2.98 2.88 2.98 2.811999 EST . HOUSEHOLDS BY INCOME 106,024 66,197 57,315 11,341 $150,000 OR MORE 4.03% 7.21% 4.10% 3.78% $100,000 TO $149,999 8.57% 11.61% 9.41% 6.71% $ 75,000 TO $ 99,999 13.07% 15.67% 13.86% 10.85%

Comparative

Population

Growth

0.00%

50.00%

20

15-MinuteCustomTradeAreas

1997 Population By Race

0.00%

100.00%

His

pan

ic*

15-MinuteCustomTradeAreas

Sex 2004 PROJ ECTION 335,270 203,595 180,704 38,737 1999 ESTIMATE 317,227 191,531 171,169 33,401 1990 CENSUS 288,000 168,911 155,053 25,170 1980 CENSUS 251,960 124,794 130,920 19,579 GROWTH 1980 - 1990 14.30% 35.35% 18.43% 28.56% 2004 PROJ ECTION 112,977 70,933 61,090 13,189 1999 ESTIMATE 106,024 66,197 57,315 11,341 1990 CENSUS 95,664 58,156 51,452 8,688 1980 CENSUS 80,666 40,242 39,015 6,626 GROWTH 1980 - 1990 18.59% 44.52% 31.88% 31.12%1999 ESTIMATED POPULATION BY RACE 317,227 191,531 171,169 33,401 WHITE 38.25% 50.97% 35.23% 74.57% BLACK 48.93% 41.02% 58.74% 13.50% ASIAN & PACIFIC ISLANDER 0.90% 1.96% 0.74% 0.38% OTHER RACES 11.92% 6.05% 5.29% 11.55%1999 ESTIMATED POPULATION 317,227 191,531 171,169 33,401 HISPANIC ORIGIN 18.41% 11.30% 8.96% 17.93%OCCUPIED UNITS 95,664 58,156 51,452 8,688 OWNER OCCUPIED 61.02% 62.99% 62.58% 63.00% RENTER OCCUPIED 38.98% 37.01% 37.42% 37.00% 1991 PERSONS PER HH 2.98 2.88 2.98 2.811999 EST. HOUSEHOLDS BY INCOME 106,024 66,197 57,315 11,341 $150,000 OR MORE 4.03% 7.21% 4.10% 3.78% $100,000 TO $149,999 8.57% 11.61% 9.41% 6.71% $ 75,000 TO $ 99,999 13.07% 15.67% 13.86% 10.85% $ 50,000 TO $ 74,999 21.87% 23.51% 23.03% 21.28% $ 35,000 TO $ 49,999 16.16% 15.04% 15.81% 13.18% $ 25,000 TO $ 34,999 11.44% 9.95% 10.81% 13.82%

Comparative

Population

Growth

0.00%

50.00%

20

15-MinuteCustomTradeAreas

1997 Population By Race

0.00%

100.00%

His

pan

ic*

15-MinuteCustomTradeAreas

Race 2004 PROJ ECTION 335,270 203,595 180,704 38,737 1999 ESTIMATE 317,227 191,531 171,169 33,401 1990 CENSUS 288,000 168,911 155,053 25,170 1980 CENSUS 251,960 124,794 130,920 19,579 GROWTH 1980 - 1990 14.30% 35.35% 18.43% 28.56% 2004 PROJ ECTION 112,977 70,933 61,090 13,189 1999 ESTIMATE 106,024 66,197 57,315 11,341 1990 CENSUS 95,664 58,156 51,452 8,688 1980 CENSUS 80,666 40,242 39,015 6,626 GROWTH 1980 - 1990 18.59% 44.52% 31.88% 31.12%1999 ESTIMATED POPULATION BY RACE 317,227 191,531 171,169 33,401 WHITE 38.25% 50.97% 35.23% 74.57% BLACK 48.93% 41.02% 58.74% 13.50% ASIAN & PACIFIC ISLANDER 0.90% 1.96% 0.74% 0.38% OTHER RACES 11.92% 6.05% 5.29% 11.55%1999 ESTIMATED POPULATION 317,227 191,531 171,169 33,401 HISPANIC ORIGIN 18.41% 11.30% 8.96% 17.93%OCCUPIED UNITS 95,664 58,156 51,452 8,688 OWNER OCCUPIED 61.02% 62.99% 62.58% 63.00% RENTER OCCUPIED 38.98% 37.01% 37.42% 37.00% 1991 PERSONS PER HH 2.98 2.88 2.98 2.811999 EST. HOUSEHOLDS BY INCOME 106,024 66,197 57,315 11,341 $150,000 OR MORE 4.03% 7.21% 4.10% 3.78% $100,000 TO $149,999 8.57% 11.61% 9.41% 6.71% $ 75,000 TO $ 99,999 13.07% 15.67% 13.86% 10.85% $ 50,000 TO $ 74,999 21.87% 23.51% 23.03% 21.28% $ 35,000 TO $ 49,999 16.16% 15.04% 15.81% 13.18% $ 25,000 TO $ 34,999 11.44% 9.95% 10.81% 13.82%

Comparative

Population

Growth

0.00%

50.00%

20

15-MinuteCustomTradeAreas

1997 Population By Race

0.00%

100.00%

His

pan

ic*

15-MinuteCustomTradeAreas

Income 2004 PROJ ECTION 335,270 203,595 180,704 38,737 1999 ESTIMATE 317,227 191,531 171,169 33,401 1990 CENSUS 288,000 168,911 155,053 25,170 1980 CENSUS 251,960 124,794 130,920 19,579 GROWTH 1980 - 1990 14.30% 35.35% 18.43% 28.56% 2004 PROJ ECTION 112,977 70,933 61,090 13,189 1999 ESTIMATE 106,024 66,197 57,315 11,341 1990 CENSUS 95,664 58,156 51,452 8,688 1980 CENSUS 80,666 40,242 39,015 6,626 GROWTH 1980 - 1990 18.59% 44.52% 31.88% 31.12%1999 ESTIMATED POPULATION BY RACE 317,227 191,531 171,169 33,401 WHITE 38.25% 50.97% 35.23% 74.57% BLACK 48.93% 41.02% 58.74% 13.50% ASIAN & PACIFIC ISLANDER 0.90% 1.96% 0.74% 0.38% OTHER RACES 11.92% 6.05% 5.29% 11.55%1999 ESTIMATED POPULATION 317,227 191,531 171,169 33,401 HISPANIC ORIGIN 18.41% 11.30% 8.96% 17.93%OCCUPIED UNITS 95,664 58,156 51,452 8,688 OWNER OCCUPIED 61.02% 62.99% 62.58% 63.00% RENTER OCCUPIED 38.98% 37.01% 37.42% 37.00% 1991 PERSONS PER HH 2.98 2.88 2.98 2.811999 EST. HOUSEHOLDS BY INCOME 106,024 66,197 57,315 11,341 $150,000 OR MORE 4.03% 7.21% 4.10% 3.78% $100,000 TO $149,999 8.57% 11.61% 9.41% 6.71% $ 75,000 TO $ 99,999 13.07% 15.67% 13.86% 10.85% $ 50,000 TO $ 74,999 21.87% 23.51% 23.03% 21.28% $ 35,000 TO $ 49,999 16.16% 15.04% 15.81% 13.18% $ 25,000 TO $ 34,999 11.44% 9.95% 10.81% 13.82%

Comparative

Population

Growth

0.00%

50.00%

20

15-MinuteCustomTradeAreas

1997 Population By Race

0.00%

100.00%

His

pan

ic*

15-MinuteCustomTradeAreas

Demographic MethodologyDemographic Methodology

Traditionally, locations were selected based on:

12

City Limit Trade AreaCity Limit Trade Area

Demographics City Limit

2003 Est. Population

27,365

Population Growth, 1990-2000

10.49%

2003 Est. Households

9,947

2003 Average Household Income

$61,537

2003 Residential Property Value

$207,057

13

Ring Trade AreaRing Trade Area

8 Mile Ring

Households 15,715

Retail Potential

$750 million

Restaurant Sales

$64 million

Automobile Sales

4,522 vehicles

14

Truth of Traditional MethodologyTruth of Traditional MethodologyDemographic data is too general and too stale

Identifies people not customers

Does not explain what people like to buy

Does not define a true trade area

Retailers have this information… for free

Retailers may have already “passed” on your community

Does not differentiate you from other communities

Retail RecruitmentToday

The focus is on customers, not people

Retail RecruitmentToday

The focus is on customers, not people

16

Retailers no longer decide by “location, location, location”-Keynote speaker at 2004 ICSC

Location decisions are based on the density of customers

In the next two years, only 11 new malls will open

ICSC statistic

Age and mobility dynamics keep customers close to home

Understand the MarketUnderstand the Market

17

Understand the RetailerUnderstand the Retailer

Retailers have to open new stores comp store gains do not satisfy revenue requirements

Retail development has changed dramaticallylifestyle centers, neighborhood shopping…convenience

Retailers typically plan new stores two years in advancepermitting, construction, staffing, advertising, inventory

18

Understand the TechnologyUnderstand the Technology

Sophisticated computer technologies

Multiple databases

GIS mapping systems

Online satellite photos

How To Identify Trade

Areas

How To Identify Trade

Areas

20

Retailers Locate Near CustomersRetailers Locate Near Customers

Shortest route is

calculated in minutes for each customer

1 Min

2 Min

2 Min

3 Min

Customers think in terms of time and convenience… they “think” drive time.

21

Drive Time Trade AreaDrive Time Trade Area

Variable: City Limit15-Minute Drive Time

2003 Est. Population

27,365 71,483

Population Growth,

1990-200010.49% 19.47%

2003 Est. Households

9,947 25,583

2003 Average

Household Income

$61,537 $62,119

2003 Residential

Property Value

$207,057 $218,544

City Limit vs. Drive Time

22

Drive Time Trade AreaDrive Time Trade Area

Variable:8 Mile Ring

15 MinuteDrive Time

Households 15,715 25,583

Retail Potential

$750 million

$1 billion

Restaurant Sales

$64 million$100

million

Automobile Sales

4,522 vehicles

6,968 vehicles

Ring vs. Drive Time

How To Identify Customers

How To Identify Customers

24

Now, customers can be identified based on:

Lifestyles

Purchase behavior

Media habits

Psychographics, not DemographicsPsychographics, not Demographics

It’s Customers, not People

25

20 terabytes of data on over 100 million households

Customer DataCustomer Data

Managed in-house

26

Telecommunications

Consumer Profiles

Shopping Centers

Trade Potential

Restaurant Data

Automobile Data

Business DataSegmentati

onDemographi

cs

Consumer Data

Street Data

Over 185 Databases In-HouseOver 185 Databases In-House

27

Current Affairs/Politics Cycling Diet/Weight Control Do-It-Yourself Domestic Travel Electronics Electronic Games Fashion Clothing Financial Investing Fishing Fitness/Exercise Foreign Travel Gardening Golf Grandchildren Health/Natural Foods Health/Vitamins Home Decorating Home Entertainment Home Furnishings Home Improvement

Lifestyle DataLifestyle Data

Astrology Automotive Work Baking Bird Feeding Bird Watching Boating/Sailing Books - Non Fiction Books - Fiction Bowling Camping/Backpack Career Goals Casino Gambling Charities Collect Art/Antiques Collect Stamps/Coins Collectibles Cooking Crafts Crossword Puzzles Cultural/Art Events

Home Video Home Workshop Horseback Riding Hunting Hunting - Shooting Internet Usage Money Making Motorcycles Movie Going Music/Dance Nation’s Heritage Needlework Personal Computers Photography Play Sports Pre-Recorded Videos Quilting Racquetball Recipes Records/Tapes/CD’s Recreational Vehicle

Running/Jogging Science/New Tech. Self-Improvement Sewing Snow Skiing Soccer Swimming Symphonies, Attend Tennis Travel TV - Watch Cable TV - Watch PBS TV - Watch Sports TV - Shop Via Vacation Cruises Video Viewing Volunteer Work Walking for Health Wildlife/Environment Wines Woodworking

28

Electronics

ELECTRONICSBuy Any TVBuy Any Video Game SystemBuy Blank Audio TapesBuy Blank Video TapesBuy Computer System Buy Computer SystemBuy Home PC at Computer StoreBuy Stereo Equipment Buy TV for $300+ Make Internet for Purchase for BusinessMost Recent TV Set is Large (27"-35"Own 2+ Video Cassette Recorders Own 3+ Television Sets Own Any Video Game SystemOwn CamcorderOwn Cassette Recorder/PlayerOwn CD-Rom Drive for PC Own DVD PlayerOwn Electronic Personal Organizer Own Entertainment/Games SoftwareOwn Fax Machine Own Home Theater SystemOwn Large/Projection Screen TV (27+") Own Laser Printer Own Laserdisc Player Own PC Speakers Own Pocket-Sized Radio/Cassette Own Portable CD Player Own Portable Radio/Tape Player Own Receiver Own Satellite DishOwn Speakers Own Standard CD Player Own Stereo TV Own TV Monitor with Input/Output Jacks

ELECTRONICSBuy Any TVBuy Any Video Game SystemBuy Blank Audio TapesBuy Blank Video TapesBuy Computer System Buy Computer SystemBuy Home PC at Computer StoreBuy Stereo Equipment Buy TV for $300+ Make Internet for Purchase for BusinessMost Recent TV Set is Large (27"-35"Own 2+ Video Cassette Recorders Own 3+ Television Sets Own Any Video Game SystemOwn CamcorderOwn Cassette Recorder/PlayerOwn CD-Rom Drive for PC Own DVD PlayerOwn Electronic Personal Organizer Own Entertainment/Games SoftwareOwn Fax Machine Own Home Theater SystemOwn Large/Projection Screen TV (27+") Own Laser Printer Own Laserdisc Player Own PC Speakers Own Pocket-Sized Radio/Cassette Own Portable CD Player Own Portable Radio/Tape Player Own Receiver Own Satellite DishOwn Speakers Own Standard CD Player Own Stereo TV Own TV Monitor with Input/Output Jacks

Purchasing Behavior DataPurchasing Behavior Data

290

1

2

3

4

5

6

7

8

9

10

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

IdentificationIdentificationAll U.S. households fall into 1

of 50 psychographic segments

300

1

2

3

4

5

6

7

8

9

10

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Typically are married with few if any children

Live primarily in the suburbs

Have above average incomes

Are likely to lease their most recent vehicle

Tend to have a great deal invested in their homes

Segment 10 - Home Sweet Home

Psychographics focuses on

Customer Lifestyles

Media Habits

LifestylesLifestyles

310

1

2

3

4

5

6

7

8

9

10

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Item # Lifestyle Characteristics Index1 Own laser printer 1352 Own DVD player 1323 Own four or more TVs 1304 Own laptop PC 1265 Own home theater system 125

Over 1500 individual categories available

Psychographics focuses on

Customer Lifestyles

Media Habits

Purchasing Behavior

Segment 10 - Home Sweet Home

Purchase BehaviorsPurchase Behaviors

How To Identify Matching Retailers

How To Identify Matching Retailers

33

0%

5%

10%

15%

20%

25%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

0%

5%

10%

15%

20%

25%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Trade Area ProfileTrade Area Profile

Dominant Segments

These eight dominant segments represent 81

percent of all households in the trade area

Trade area

City Lim its

Potential Site

0 3 6

miles

Shopping CentersGLA in thousands

100 to 500

Below 100

340%

5%

10%

15%

20%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

0%

5%

10%

15%

20%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Retailer ProfileRetailer ProfileApplebee’s

35

Trade Area Matches RetailerTrade Area Matches Retailer

Trade Area Comparison

Applebee’s Average

Trade Area

Anytown, USA

Site Trade Area

Total Population

63,975 71,483

Total Households

25,219 25,583

Applebee’sDominant Segment

Count

13,205 15,211

Dominant Segments

Trade area

City Lim its

Potential Site

0 3 6

miles

Shopping CentersGLA in thousands

100 to 500

Below 100

36

Trade Area Does Not Match RetailerTrade Area Does Not Match Retailer

Trade Area Comparison

AutoZoneAverage

Trade Area

Anytown, USA

Site Trade Area

Total Population

63,260 71,483

Total Households

22,269 25,583

AutoZoneDominant Segment

Count

9,595 4,361

Dominant Segments

Trade area

City Lim its

Potential Site

0 3 6

miles

Shopping CentersGLA in thousands

100 to 500

Below 100

In Partnership With

The National League of Cities

In Partnership With

The National League of Cities

Retail Recruiting Program

Retail Recruiting Program

38

What is CommunityID?

Matches the specific retail and restaurant concepts to the buying habits and lifestyles of the consumers living in your trade area

Is the only program of its kind that can factually identify exactly which concepts should be in your community

39

Where is CommunityID?

CommunityID

Over 100 Communities in 27 States

40

Response to CommunityID

“Be advised we are very interested in this town and would be happy to talk as to what is available. If you have others in these parameters we would be willing to look as well.”

Roy Saunders,

Vice President of Development

Fastrip Food Stores

“With the results of CommunityID, I have been able to put together a great package of information that is timely, detailed and strongly supports the opportunity for business growth in this area… One retail broker told me that he had never seen the support and knowledge about a city that we have.”

Linda Little

Director of Business Retention & Expansion,

McKinney Chamber of Commerce

41

Match Trade AreasMatch Trade AreasWe identify retailers with existing locations in trade areas like yours

Customers

Existing Location Your Trade Area

42

Major Categories – Consumer ProductsDollars/Trade

Area

Children’s Apparel $18,927,218

Men’s Apparel $23,887,995

Women’s Apparel $37,058,263

Personal Services and Household Items $129,886,940

Groceries $18,402,005

Alcohol $103,006,107

Restaurants and Bars $16,137,765

Tobacco Products $22,380,366

Home Improvement and Household Services $41,948,249

Furniture, Appliances and Décor $14,412,147

Automotive $45,488,177

Fuel $54,030,857

Electronics $43,761,382

Recreation $42,108,206

Entertainment $30,455,139

Other $522,993,222

TOTAL $1,201,521,318

Sample Trade Area DemandSample Trade Area Demand

43

Sample Tenant MatchSample Tenant MatchRetailer and Restaurant Preferred GLA

Applebee's Neighborhood Grill 5,000

Baskin-Robbins Ice Cream 1,500 – 2,500

Blimpie's Restaurant 500 – 2,500

Blockbuster Video 2,500 – 4,800

Crescent Jewelers 1,100

Dollar Tree 6,000 – 12,000

Foot Locker 1,800 – 10,000

General Nutrition Center 1,000

International House Of Pancake

4,200 – 5,000

Payless Shoe Source 2,400 – 3,000

Pier 1 Imports 9,000 – 20,000

Play It Again Sports 2,500 – 3,200

Ross Stores Inc 30,000

Sally Beauty Supply 1,200 – 1,800

Staples The Office Superstore 10,000 – 25,000

Sunglass Hut 150 – 4,000

Target 126,000 – 175,000

Victoria’s Secret 3,900 – 4,500

Wienerschnitzel 700 – 2,000

44

Sample Score SheetSample Score Sheet

45

Sample Score SheetSample Score Sheet

46

SummarySummary

Differentiate your community’s retail recruitment approach

Sell your trade area, not your community

It’s about customers, not people

Be proactive in your community’s economic future

47

Trade Area “A”

Remember: Customers, Not PeopleRemember: Customers, Not People

Trade Area “B”

Total households

Pier 1 Customer Count: 14,672

Pier 1 Customer Count: 14,396

Customers

Total Households: 25,982

Total Households: 109,930

48

Retailer Recruiting PackagesRetailer Recruiting Packages

Just as you would prepare data to market your community to the industrial sector, you need the type of data retailers use to make location decisions.

49