RETAIL MARKET ANALYSIS - Write My Academic Essay

Retail Market Analysis

Order Description
Prepare retail market analysis for the Lake Forest Mall site. For this assignment, you will need to review the following report:

CoStar Retail Report
SiteWise Retail Spending Report
(Note: Atached.)

Begin with a review of the number of households and employees in the market area. Create a table to clearly show the amount and type of customers with direct access to a retail opportunity on the Lake Forest Mall site.

Determine the amount of retail sales currently being generated by residents in the trade area. Assess what type of retail stores each sales category would support (i.e., eggs, bread, and poultry would be purchased at a grocery store (typically); whereas prepared foods might be purchased at a grocery store or sandwich shop). Begin to categorize sales into possible store types.
Prepare an expected capture rate for each retail category.
Create a table where total sales per retail category are divided by a healthy expectation of sales per square foot. For the purposes of your analysis, use $400/sf as an ideal sales figure for grocery and $350/sf as an ideal sales figure for all other types of retail.

How much retail can the market area support? Use this formula to find out:

Identify the estimated amount of retail supply currently in the market area. Document any plans for new retail development within five miles of Lake Forest Mall .For more information, visit the website, Development Activity Information Center for Montgomery County.
Conclude by identifying any unmet retail demand (total retail square footage based on supportable demand from residents, employees and visitors) in the market area for two time periods (current and 2020). Compare these figures to the retail supply in the three major retail categories (NG&S, F&B, and GAFO). Finally, provide your assessment of the Lake Forest Mall site as a location for retail development.

Answer and explanation

Retail Market Analysis for the Lake Forest Mall Site

The aim of this paper is to prepare retail market analysis for the Lake Forest Mall site. The Lake Forest Mall site is an attraction location for many middle-income households ($ 84,524 median household incomes). The current number of households is 59,354. The market area is along lower home prices at median value of $ 346,334. The average age of population for this market area is relatively young (35.8 years old). The number of employees in the market area is 98,114, which is projected to increase up to 98,998 in year 2020 (Montgomery County, 2017).

The Estimated Amount of Retail Supply Currently In the Market Area

More than half of the retail within the Lake Forest Mall site is general Merchandise, Furnishings, Apparel, and other (GAFO) (65 percent). Additionally, the most common shopping Centre types are neighborhood centers and hybrid centers (which typically consists of both Neighborhood Goods and Services (NG &S) and GAFO retailers). These hybrid centers and Lake Forest Mall contribute significantly to the amount of GAFO retail within this market area. The Lake Forest Mall site has various new town center developments, especially Kentland’s and RIO Washingtonian (Montgomery County, 2017). These attract customers from neighborhood beyond the trade area due to the concentration of restaurants and shops in a walkable setting. These developments also contain a significant amount of GAFO retail as well.

Document Any Plans for New Retail Development within Five Miles of Lake Forest Mall

The Lake Forest Mall site continues to be the home to two evolving retail environments at the Kentlands and Olde Towne Gaithersburg. The integration of residential and office uses at these locations has created a strong and reliable customer base for each neighborhood. As both developments continue to improve the conditions of their retail supply, these special commercial districts will find their footing in the market place (Montgomery County, 2017). In several circumstances, new retail development in the market area has been developed without redeveloping or repositioning old retail space in its own site.

As the Lake Forest Mall site continues to develop, it is recommended that retail within this market area be addressed by prioritizing the repositioning of aging and poor-performing retail space. The existing retail building stock serves the demand generated by each of the Lake Forest Mall’s trade area, and underperforming retail should be repositioned to decrease the total amount of GAFO square footage and increase both F&B and NG&S tenants over time.

Several older neighborhood centers in Lake Forest have already benefited from reinvestment in the form of significant capital investment and an improved tenant mix (Montgomery County, 2017). Following this lead in other centers throughout the Lake Forest Mall site would have a positive effect on the success and viability of other aging but still viable neighborhood-serving shopping centers.

There is an opportunity to accomplish this goal with the redevelopment of Lake Forest Mall by creating a pedestrian-friendly retail cluster that contains a mix of F&B and NG&S retail options within five miles of Lake Forest Mall. Once redeveloped, the existing 902,000 square feet of GAFO tenants at the mall can be repositioned to better fit the retail needs of the community (Montgomery County, 2017). The county can no longer support multiple regional, high-performing malls within miles of each other. Although GAFO retail retains its sense of sustainability and guaranteed success, the increasing influence of online sales suggests that large GAFO storefronts are more risky than ever. Co-tenanting GAFO with activating uses, like NG&S and F&B, and emphasizing smaller storefronts, are strategies that align with national shopping trends.

Conclusion

The Lake Forest Mall site has positioned itself as an attractive location for retailers. Consequently, this market area has a Tertiary Trade Area (TTA) due to the high amount of retail-occupied space. However, the immense competition in nearby trade area such as Rockville and Germantown, limits the capture rates and total demand for retail in the Lake Forest Mall site. The total retail currently demanded for this market area is approximately 2,950,000 square feet, split between the NG&S (55 percent), Food & Beverage (F&B) (17 percent), and GAFO (30 percent) categories (Montgomery County, 2017). As the population of the Lake Forest mall trade area increase over time, the retail demand is slated to increase by 151,640 square feet to a total of 3,099,660 square feet by 2020.