Matthew O’Rourke, AICP American Structurepoint Planning and Economic Development Group Leader

In today’s ever-evolving municipal landscape, communities are often faced with the challenge of attracting the right businesses to serve their residents. Understanding whether a market can support new stores or services is critical for economic growth and sustainability. Matthew O'Rourke, a development expert with a deep understanding of the retail sector, recently shared his insights into how American Structurepoint helped the City of Crawfordsville, Indiana, tackle this challenge through a comprehensive retail gap analysis.

The Retail Gap Analysis: A Data-Driven Approach

At its core, a retail gap analysis assesses whether new retail establishments can be supported by residents alone by comparing how much residents are spending locally versus how much they are spending outside their community. O’Rourke explains that this analysis is centered around two key concepts: leakage and surplus.

• Leakage occurs when residents leave their community to spend money elsewhere. This indicates an unmet demand for certain products or services locally.
• Surplus, on the other hand, occurs when a community is attracting non-residents who are spending money within its borders. This suggests the area is offering more than its residents alone would support.

The retail gap analysis uses these data points to inform city planners, developers, and retailers whether the market can sustain additional retail outlets. It identifies opportunities and gaps, ensuring decisions are based on quantitative data rather than speculation.

Lessons from St. Charles, Illinois: The Importance of Understanding Data

O’Rourke’s journey with retail gap analysis began during his tenure in economic development for St. Charles, Illinois, a city that was struggling to revitalize a defunct mall. After a year and a half of attempting to attract retailers, he was confronted with a stark reality when a broker revealed that St. Charles did not meet the demographic criteria retailers were looking for. This experience underscored the importance of understanding the demographic and economic data that retailers rely on to make decisions.

“I learned two important lessons,” O’Rourke recalls. “First, you need to be very familiar with the data that’s driving retailers’ decisions. Second, if the data isn’t favorable, you need to figure out how to overcome that challenge.”

This setback in St. Charles led O’Rourke to dive deeper into retail gap analysis, recognizing it as a powerful tool for making informed decisions about economic development.

Crawfordsville’s Challenge: A Surplus That Did Not Exist

When O’Rourke and his team at American Structurepoint began their work with the City of Crawfordsville, they faced a unique challenge. The city was keen on attracting another grocery store, but the retail gap analysis showed a surplus in grocery spending, suggesting that Crawfordsville already had more grocery options than it needed.
However, a closer look at the data revealed that two local grocery stores had recently closed, and the analysis was based on outdated information. The surplus reflected in the report no longer existed, but it was still the data that potential retailers, such as ALDI, were using to make their decisions.

“This is the data that all the retailers are seeing,” O’Rourke emphasized. “If you want to talk to a retailer, they’re going to see these outdated numbers, and they won’t think there’s a need for another grocery store in your community.”

Problem-Solving with Data: Making the Case

Recognizing this challenge, O’Rourke and his American Structurepoint team took a proactive approach to correct the outdated information and make the case that Crawfordsville was, in fact, a viable market for additional grocery stores. They began by comparing Crawfordsville’s demographics and retail environment to similar communities that successfully supported multiple grocery stores, including Kroger and Walmart Supercenters.

After crunching the numbers and showing that Crawfordsville’s demographics aligned with those of comparable markets, O’Rourke and his team knew they had the data to support the Crawfordsville case. The next step was to ensure that potential retailers, particularly ALDI, were aware of this updated information.

“We said, ‘Alright, we need to get these numbers in front of them and show that this is a viable market,’” O’Rourke explains. “We needed to start saying, ‘Hey, this is a town you should be in. There’s a market here for you.’”

The Power of Public Engagement and Industry Connections

One of the key elements of American Structurepoint’s approach was its focus on public engagement. Through community outreach efforts, they discovered that ALDI was the most requested grocery store among Crawfordsville’s residents. Armed with this knowledge and the updated data, the team worked closely with city officials to craft a compelling narrative for retailers.

Crawfordsville’s leadership also took an active role in advocating for new grocery stores by attending industry events such as the International Council of Shopping Centers (ICSC) conference. This annual gathering in Las Vegas brings together retailers, developers, and brokers from across the country. Thanks to the updated data and the city’s persistent outreach efforts, Crawfordsville began to see tangible results in their pursuit of new grocery options.

Conclusion: Turning Data into Development

Thanks to the results of the study, today Crawfordsville, Indiana, offers a variety of grocery shopping options for residents. These stores ensure that Crawfordsville residents have access to a broad range of grocery options, from large supermarkets to locally focused markets.

The Crawfordsville case study serves as a powerful example of how retail gap analysis can be used to support economic development. By leveraging data to identify gaps and opportunities, cities can craft targeted strategies for attracting retailers, even when the initial analysis may seem discouraging.

As O’Rourke concluded, “Sometimes, the weight of the vision is just to think through the problem and look at the data. That’s really what retail gap analysis is all about – helping communities understand their market potential and solving the problems that stand in the way of growth.”

American Structurepoint’s work with Crawfordsville demonstrates the value of data-driven decision-making in economic development and the importance of adapting to changing market conditions. By staying proactive, engaging the community, and utilizing industry connections, cities can unlock new opportunities for growth and ensure their residents are well-served.