How to Get the Retail Chains You Want

By Amber Lester Kennedy Tuesday, June 07, 2011

Residents often mention wanting a P.F. Chang's restaurant in the Historic Triangle.

But for some reason, some of the most desired chain businesses never seem to settle in the area, and WYDaily wondered: What does it take to get these wish list businesses?

Economic development directors say that attracting desirable chain business completely depends on having the right numbers to match each company’s formula. Businesses look at the population, the spending power of that population, the existing infrastructure and what other businesses have come into the area. Some retailers won’t even enter a market with a population below 100,000, while others might have a rule that all locations need to be at least 50 miles apart.

Jim Noel, economic development director for York County, said most localities would prefer to court manufacturing businesses that will create wealth, but tax revenue is important and for that reason, it’s worth it to court desirable retail and restaurants.

Localities do their part to attract such businesses by designating some land for retail business, then bringing infrastructure – water, sewer, stormwater and power – to the area. They also help troubleshoot any development problems that occur, and assist in marketing the business to residents. If a site seems particularly well-suited to a specific business, the economic development department will prepare a package of information about the population, household incomes, traffic counts and more.

“Businesses are trained to focus on the numbers,” said Russell Seymour, director of economic development for James City County. “You can talk the best game in the world and have the most outstanding option for them, but if the customer base is not there, then they’re not interested.”

York County has a website geared toward showcasing available development locations called Site Selector. A real estate office representative for a company like P.F. Chang’s could do a search for a building or development that would suit its needs, and find information about everything from nearby subdivisions to traffic data. York can boast the highest per capita income per household, and a location right off the interstate, while James City County and Williamsburg can point to tourism as a draw and many residents with high discretionary income.

But that’s about as far as localities can get in their effort to persuade big businesses. “Every major retailer has a real estate department and they have a formula,” Noel said. “They point to a location and draw a ring around it, or they want to see x number of people.”

When they decide to expand, the business’s real estate office often works with retail developers or commercial real estate brokers to find their next location. Many deals happen far from the future location, at events like the annual Las Vegas convention of the International Council of Shopping Centers. “It is a frenzy for a week in deal-cutting,” Noel said. “Every major retailer and every major developer is there.”

In the retail industry, some businesses step forward and a pack follows. If a company like Target or Home Depot chooses to locate in a new spot, several retailers are almost guaranteed to come, too, such as Lowe’s, Kohl’s, Best Buy or Dick’s Sporting Goods.

Some other retailers, such as IKEA, seem to manage their growth so strategically that it might take a regional effort to attract one. The Swedish home goods retailer has 39 stores in the United States, most in metropolitan areas. While Hampton Roads as a region might meet its requirements, the localities alone might not. If IKEA considered coming to Hampton Roads, the localities would likely compete to create the best business climate in hopes of reaping the benefits of its tax revenue. Noel said that's what happened when Nordstrom entered the area over a decade ago, ultimately choosing to become an anchor store at the MacArthur Center.

While local development offices might not have much sway over major retailers, they still try to make residents’ shopping fantasies become realities. Noel said that last week, he was thinking about the recently vacated grocery section of the Kiln Creek Super K-Mart and thought it could be a good spot for Whole Foods. He already sent some information about York County to their office, he said.

Both Noel and Seymour recommend residents take the same initiative and let businesses know there might be a customer base in the Triangle. “Most major retailers will have a ‘Contact us’ page on their websites where you can submit suggestions,” Noel said.

Seymour said he hears from people every day, including his own children, about what businesses they’d like to see in the area.

“We will go aggressively after a particular brand,” he said, adding that the Triangle’s retail market has fared better than other parts of the country. “We are very fortunate in our reach, and to be in an area that people want to locate. It’s up to us to convey that message.”