Consumer consulting firm finds $500M ‘opportunity gap’ in Spokane Valley market
As Spokane Valley continues to support development of high-wage manufacturing jobs with construction of Katerra Inc.’s cross-laminated timber facility, it’s also coming up with a plan to bring more retail businesses to the city.
Spokane Valley earlier this year contracted with Alabama-based consumer consulting firm, Retail Strategies, to assist with increasing the city’s retail footprint by studying the city’s commercial landscape and marketing the area to brokers, developers and retailers across the nation.
“In the early stages of the economic development program, it was recognized that none of our partners – including Greater Spokane Incorporated – focused on retail, and we felt that was very important, considering the city’s budget and reliance on sales tax,” said Mike Basinger, economic development manager for Spokane Valley at a City Council meeting last week.
Basinger said the city introduced efforts to boost retail recruitment by updating its comprehensive plan and development regulations to allow increased density along commercial corridors and new opportunities for neighborhood commercial developments.
Retail Strategies – who contracts with more than 200 municipalities across 27 states for retail recruitment – found there are about 100 retailers that would fit the Valley’s market.
The firm conducted a study earlier this year using mobile GPS data collected from phone users who agreed to enable location services and other methods to identify where consumers are traveling from to shop in Spokane Valley.
The firm was able to identify the Valley’s core consumer trade area – where the community generates a majority of its customers – by studying the travel distance of consumers to large traffic generating stores, such as Walmart, Lowe’s, Eddie Bauer and Home Goods.
The study indicated there’s more than $500 million “opportunity gap” in the city – meaning more people are purchasing items outside of the Valley’s trade area – so it’s integral to find specific markets to meet those needs and capture revenue, according to the retail study.
Because Retail Strategies has relationships with property owners, brokers and developers with a database of more than 10,000 industry contacts, it can easily identify property availability, square footage, price and market conditions, said Scott VonCannon, COO for Retail Strategies.
“We’re the Match.com of the retail real estate industry,” he said. “We’re trying to tee up deals and we’re matching individuals together. We’re able to move the needle and actually assist some of these brokers.”
Spokane Valley’s retail vacancy rate is about 5 percent, according to a 2018 report by commercial real estate brokerage NAI Black.
The firm met with Spokane-based commercial real estate brokerage Kiemle Hagood, who leases space to retailers at the Spokane Valley Mall, to discuss prospective tenants for 25,000 square feet of space near Hobby Lobby, an arts and crafts store.
VonCannon said the firm monitors tenants with a high-risk of shuttering and finds tenants to fill potential vacant spaces.
“If and when another retailer decides to shut their doors, we already have some retailers interested in back-filling that space,” he said. “What’s really important to understand is we’re identifying retailers that are active and in growth mode. There’s a handful of restaurants that aren’t here that we’ve identified that should be here.”
Spokane Valley officials will consider continuation of its partnership with Retail Strategies for retail recruitment as it develops its 2019 budget.