Do Economic Developers Attract Retail?

Do Economic Developers Attract Retail?
Is There a Disconnect in Expectations?
 
Yes and no and yes.
It depends on the community and the economic development organization. It also depends on the chambers of commerce and the municipalities.

There are small and rural communities that do not have adequate infrastructure or talent pools for industries such as manufacturing, aerospace or research for example. Communities may not have natural resources that attract tourism. These kinds of communities still need an economic development strategy of some kind. Often retail attraction is the most realistic course of action.

These communities still have adequate population and this population often travels outside of their own area to access retail and restaurants. Many residents of the community may travel outside their area for employment. The study that analyzes the percentage of loss of revenue a community suffers due to residents shopping and eating elsewhere is called a Retail Gap Analysis.

Economic development organizations, local government and chambers work together or separately to develop a strategy in some of these smaller communities. Often they hire retail recruitment experts to work a retail attraction plan. The town still needs adequate infrastructure to handle new retail. Retail and restaurant companies have criteria that must be met in order to locate in a particular area. Retail attraction is also very important in a tourist community. Tourists want choices for shopping and dining. All of this activity increases a community’s tax base.

When larger, more diverse communities have identified strengths and attributes and have designed a strategy to retain and attract businesses that match those characteristics, then economic development organizations must focus on the big picture. They must put their limited time, manpower and resources towards getting the most and best impact for their communities. This means helping to retain, expand and attract companies to their community that will create the best jobs for the most people.

While retail and restaurants add to quality of life and a sense of place, economic development organizations cannot do it all. It’s great news when a HomeGoods or an Olive Garden opens a new location. However, these are not high paying jobs. Yes, this store adds to the tax base and quality of life for residents. Yes, it offers jobs for segments of the populations such as those who want second jobs, those who want part time jobs, those who are starting out in the job market, etc.  But, these are not careers that lead to home-ownership or create wealth that add to the tax base even more.

Retail economic development experts can be hired contractually to do the necessary research and studies, create a retail recruitment plan and execute that plan. This is a category of economic development that requires knowledge and skills unique to the sector. It has a language all its own. Just as we see medical specialists in different categories, economic development also has specialists.

Many chambers and municipalities hire such specialists to work on retail attraction. They realize that their economic development organizations are trying to get the “most bang for the buck” so to speak. Small staffs and budgets and limited time means their economic development organizations need to focus on retention, expansion and attraction of companies that create higher wage jobs and invest higher amounts of capital into the community. By focusing on higher wage jobs, the community becomes more attractive to retailers who value certain income levels / buying power.