Downtown Beaufort Retail Market Analysis: PHASE I

Downtown Beaufort, South CarolinaRETA I L MARKET ANALYS I S : P HASE I

AUGUST 2 0 1 4

Table of Contents

1.1: Purpose 31.2: Planning Process 31.3: Acknowledgments 3

2.1: Stakeholder Roundtables & Interviews 42.2: Online Survey 52.3: Observations 9

3.1: MarketDefinition 103 . 1 . 1 : Z I P C o d e R e s u l t s

3 . 1 . 2 : Tr a d e A r e a D e f i n i t i o n

3.2: Trade Area Demographics 133 . 2 . 1 : M a r k e t S e gme n t a t i o n

3.3: Market Analysis 213 . 3 . 1 : R e t a i l L e a k a g e i n t h e Tr a d e A r e a s

3 . 3 . 2 : D e t a i l e d R e t a i l M a r k e t P o t e n t i a l Ta b l e s

3.4: Downtown Retail Opportunities 243 . 4 . 1 : C l u s t e r i n g O p p o r t u n i t i e s

3 . 4 . 2 : E x p a n s i o n O p p o r t u n i t i e s

3 . 4 . 3 : O ve r a l l O b s e r v a t i o n s & N ex t S t e p s

R E T A I L M A R K E T A N A LY S I S , P T. I | Downtown Beaufort, SC 3

1. Introduction1.1: PurposeIn May 2014, Main Street Beaufort, USA hired Arnett Muldrow & Associates of Greenville, South Carolina to conduct a retail market analysis and strategy for Downtown Beaufort, South Carolina. The goals of this project are as follows: to listen closely to community stakeholders and conduct relevant retail market-based research; to provide useful economic and demographic data to Main Street Beaufort as well as local businesses and potential investors; and to outline retail development strategies and specific recommendations to facilitate retail growth and development of Downtown Beaufort in the coming years.

1.2: Planning ProcessThe Consultants conducted this project using the following process:

Community Engagement: The Consultants conducted a series of one-on-one interviews and roundtable meetings to gather stakeholder input on June 10-12, 2014.

Retail Market Analysis: The Consultants conducted retail market research based on real customer visits recorded by local merchants, an online consumer opinion survey, and data derived from various sources, including Claritas Site Reports, the US Census Bureau, and the Urban Land Institute.

Public Presentation: The Consultants conducted a public presentation on July 9, 2014 to detail market analysis findings.

Retail Development Strategy: The Consultants are currently developing a series of strategies and recommendations based on stakeholder input and retail market analysis processes. These will be presented and produced as a companion document to this report.

1.3: AcknowledgmentsThis project would not have been possible without the cooperation and enthusiasm of Main Street Beaufort, USA and the downtown Beaufort retail community. A special thank you goes out to Main Street Beaufort, USA Executive Director LaNelle Fabian and Events/Membership Manager Beth Caron for their ongoing assistance with this project.

Downtown Beaufort, SC | R E T A I L M A R K E T A N A LY S I S , P T. I4

2. Community EngagementA robust public input process is critical to any successful planning project. Direct community engagement provides an opportunity to hear ideas and perspectives that cannot be learned from data alone, and also allows the consultant team to better tailor its recommendations to the needs of the community.

This chapter describes the community engagement process and outcomes of this project. It is divided into three sections:

Section 2.1 details the ideas and opinions provided by community stakeholders. This section also describes major themes that emerged based on stakeholder interviews and the views of the project Steering Committee and the consultant team.

Section 2.2 presents a summary of responses collected from an online survey instrument. These responses describe commonly-held perceptions of the current retail climate in Beaufort with a special focus on the Downtown district.

Section 2.3 summarizes the consultant teams observations on gathered stakeholder input. This section also offers thoughts on how this qualitative data may shape future retail growth in Downtown Beaufort.

2.1: Stakeholder Roundtables & InterviewsIIn June 2014, the Consultants hosted five theme-based roundtable meetings plus one public meeting as well as sixteen one-on-one conversations with community stakeholders. These individuals included business and civic leadersincluding every member of City Councilas well as interested residents. This section organizes the input gathered from these sessions into four general categories: strengths, weaknesses, opportunities, and threats.

The following ideas may be characterized as what we heard.

Strengths

The history, architecture, beauty, and overall character of Downtown Beaufort; Downtowns location as a jumping-off point to the Sea Islands and its proximity to water; Downtown events, festivals, and activities that invigorate the district; The overall high quality of stores, products, and restaurants in Downtown Beaufort; A set of diverse, strong visitor markets (including military, bus, day-trippers, Intracoastal Waterway

travelers, Fripp Island vacationers, Hilton Head Island vacationers, etc.); A system of strong local partnerships committed to local economic development, tourism promotion,

and preservation of Beauforts character and history.


Weaknesses

Inconvenient downtown business hours; Contentious downtown parking system; A shortage of everyday activities, goods,

and shopping choices for the local market and families;

The perception of some area residents that Downtown isnt for me.

Opportunities

Grow and broaden the local retail market; Better coordination between hospitality

operators and retailers; Leverage the connection with the outdoors,

especially at Waterfront Park; Potential day dock at Waterfront Park; Take advantage of Intracoastal Waterway traffic; Potential for structured parking to mitigate

long-standing parking issues; Capitalize on untapped potential visitor

attractions and markets.

Threats

Stagnant local population growth; The center of retail gravity has shifted to

southern Beaufort County; Reflexively antagonistic attitudes regarding

new development in and near Downtown; The City has a natural limit to growth and

expansion; Regulatory and development process-related

barriers to market entry.

2.2: Online SurveyAn online survey was made available to the Beaufort community in May and June 2014 to reach interested members of the community who were unable to participate in face-to-face meetings or interviews. The survey was promoted heavily through the Main Street Beaufort, USA email list, website, and Facebook page as well as the Beaufort Gazette and other local news sources. These combined efforts connected 879 respondents to the online survey.

Eighty-seven percent of respondents identified themselves to be Beaufort residents (defined as those who live in Beaufort six months or more annually). Seventy-five percent of respondents identified themselves as female, with the remainder identifying as male.

In terms of household income, survey respondents skewed towards the higher end of the income scale. The largest group, with thirty-four percent of the total, reported an annual household income of over $100,000. Twenty-three percent indicated an annual household income of $75,001 to $100,000; twenty-one percent at $50,001 to $75,000; and seventeen percent at $25,001 to $50,000. Just five percent of respondents reported an annual income of under $25,000.

The results of the survey are summarized below by question.


Question 1 attempts to gauge the overall shopping environment in Downtown Beaufort in terms of broad generalizations about what is currently available as well as expectations for future types of retail. Respondents ranked features from Strongly Agree (10) to Strongly Disagree (1). Categories receiving an 8 or higher are as follows: It is important to have an economically vibrant

Downtown. (84%) Shopping local is important to me. (82%) I look for the best quality when shopping.

(75%) It is important to carefully control the design of

new retail development. (72%) Shopping independent merchants is important

to me. (71%) I look for the best price when shopping.

(71%) It is important to carefully control the size of

new retail development. (69%) Additional retail development will keep more

customers in Beaufort. (68%) Additional retail development outside of

Downtown will improve the quality of Beaufort. (60%)

Downtown Beaufort is more for visitors than for locals. (54%)

I am willing to travel to find greater shopping options. (48%)

Additional retail development Downtown will improve the quality of Beaufort. (45%)

Downtown Beaufort provides local residents good shopping. (22%)

Beaufort provides all the shopping options I need. (15%)

Question 2 asks respondents how far they are willing to travel to shop. Fully one-third of respondents indicated Bluffton, with an additional thirty percent each for Savannah or Charleston.

Question 3 asks why consumers are not shopping in Downtown Beaufort more frequently. The reasons rate as follows (percentages are the respondents that agree this is a reason they do not shop in Downtown Beaufort): Lack of stores, products, variety (72%) Inconvenient parking, access (48%) Inconvenient business hours (41%) Prices (38%) Quality of stores, products (36%) Poor service (11%) Inconvenient to home (8%) Inconvenient to work (6%) Safety concerns (5%)

Question 4 analyzes where respondents are shopping and how frequently. Once or more per week (basic trips for daily needs), consumers are shopping at the below destinations (percentages indicate respondents shopping in each location once or more per week): Beaufort County (68%) City of Beaufort (60%) Online (32%) Downtown Beaufort (16%) Catalog/mail order (8%) Other nearby communities (6%) Savannah (2%) Charleston (2%)


Question 5 addresses the character of the shopping environment in Beaufort. Respondents ranked features from Poor (1) to Excellent (10). Categories receiving an 8 or higher are as follows: Overall attractiveness (75%) Walkability (72%) Feeling of safety (64%) Maintenance of sidewalks (62%) Upkeep of buildings (62%) Quality of restaurants (57%) Maintenance of parking (51%) Personal service (48%) Quality of retail (43%) Traffic circulation (40%) Variety of restaurants (38%) Convenient hours (37%) Prices (28%) Convenient parking (23%) Amount of parking Downtown (20%) Variety of retail (16%)

Question 6 poses questions regarding ways in which Downtown shopping could be enhanced. Respondents are in agreement, from most to least strongly, with the following statements. (The percentages of Strongly Agree selections are shown in parentheses alongside the statements.) Regular events enhance the appeal of

Downtown. (55%) Large annual events enhance the appeal of

Downtown. (50%) I always try to buy locally. (39%) I want more retail options outside of Downtown.

(25%) I want more day-to-day goods in Downtown.

(38%) Employees show great customer service.

(26%) I want more restaurant options in Downtown.

(25%) I want more specialty/unique shopping in

Downtown. (23%) I am optimistic about the future of retail in

Beaufort. (19%) Parking in Downtown is convenient. (12%) Shop hours are convenient. (10%)


Questions 7 and 8 were open-ended questions requesting what types of businesses and specific stores are desired in the community. Types of stores were clustered into eight broad categories to summarize more easily. Frequently mentioned retail types are as follows: Clothing (22%) Restaurants (16%) Food/grocery (13%) Shoe (11%)

Question 8 responses included many specific big box and chain stores aligning most closely with the clothing and food/grocery categories above. Most frequently mentioned retailers are as follows: Target (42%) Trader Joes (16%) Starbucks (10%) Kohls (8%)

Question 9 was intended to identify appropriate locations for new retail in Beaufort, and the responses suggested Ladys Island (9%), Boundary Street (6%), Robert Smalls Parkway (5%), and Downtown (4%). Approximately one-in-five respondents did not specify a location other than not in or outside of Downtown.


2.3: ObservationsPublic input sessions and online survey are particularly valuable, as they provide commentary on perceptions, values, and preferences within the community that may not be gleaned from market data alone.

Overall, key information gathered in stakeholder meetings and the online survey may be summarized as follows: Downtown is regarded as a valuable asset to the Beaufort community. The districts attractiveness,

history, safety, convenience, and economic vibrancy are all key attributes of its value proposition. Dissatisfaction with Downtown typically involves the issues of parking, business hours, and limited

retail offerings. Downtowns robust and varied visitor market is an important component of its economic health. Many stakeholders expressed frustration with the inability to connect with water in Downtown

Beaufort. Waterfront Park was identified as a see but dont touch amenity that could be enriched to include some form of direct engagement with the river.

Stakeholders see value in shopping locally (when possible) as well as the connection between Downtown retail sales and the districts overall health.

Restaurants are a key draw for Downtown Beaufort. They comprise a solid market for locals and visitors alike. Many respondents indicated a desire for additional Downtown restaurant offerings, especially at family-friendly price points.

Many stakeholders are concerned with the size, scale, and appropriateness of new development in and near Downtown Beaufort. This sentiment poses both opportunities and challenges to future growth in the district.

Stakeholders feel strongly that events, both small and large, enrich Downtown Beaufort. Inconvenient parking and a perceived lack of variety in Downtown retail offerings pose challenges

for the district. Respondents consistently rated these issues as key reasons for dissatisfaction with Downtown Beaufort.

For many retail categories (especially chains and major retailers), Downtown is not the most desirable location for new businesses.


3. Retail Market Analysis

This chapter presents the findings of the retail market research for Downtown Beaufort and sets the stage for further analysis that can be used to recruit businesses, help existing businesses target customers, and implement the goals and recommendations of the retail development strategy to follow this report. The goal of this retail market analysis is to show community stakeholders and potential investors how to capitalize on potential retail trade and to leverage investments that will sustain Beauforts retail community and provide opportunities for future growth.

This chapter is divided into four sections:

Section 3.1 describes the market definition based on ZIP Code survey work completed by businesses in the community. It also provides insight into Beauforts trade area demographics and presents market data related to Beauforts primary and secondary retail trade areas.

Section 3.2 provides demographic profiles of Beauforts primary and secondary retail trade areas. This section also presents a more detailed market segmentation using PRIZM NE data. (PRIZM is a product of Nielsen Claritas.)

Section 3.3 describes the amount of annual retail sales leaking from Beauforts primary and secondary retail trade areas. This information is based on the most recent data available and is a reliable source for understanding overall market patterns.

Section 3.4 offers a summary of Beauforts current retail environment, and describes the key market characteristics and trends that will form the basis of the recommendations in Phase II of this project.

3.1: MarketDefinitionUnlike radial and drive time studies that use arbitrarily chosen boundaries for customer trade zones, the market definition exercise for Downtown Beaufort is based on ZIP Code survey work completed by cooperative merchants, restaurateurs, and hoteliers. ZIP Code surveys have their own limitations, as ZIP Code geographies can be fairly large and stretch beyond typical market boundaries. It is the only technique, however, that correlates clearly with customer traffic collected by merchants. Recorded ZIP Codes are used to define primary trade areas, which are then analyzed in terms of demographics and economic activity.

Forty-two Beaufort retail and restaurant businesses, as well as four Downtown hotels or bed-and-breakfasts, graciously participated in a ZIP Code survey of their customers during the week of May 16-23, 2014. Merchants were provided with a form to record customer ZIP Codes and asked to keep a log of all customers during the weeklong period.


3 . 1 . 1 : Z I P C o d e R e s u l t s

The results of the ZIP Code survey are presented in Figures 1 and 2 and are summarized as follows:

In all, the ZIP Code survey recorded 4,968 unique customer visits. These visits included 1,293 unique US ZIP Codes across 47 US states. The ZIP Code survey also recorded visitors from eight foreign countries. In terms of total visits recorded and unique ZIP Codes recorded, Downtown Beaufort is in the top one percent of the hundreds of communities that have participated in this this exercise.

Residents of the City of Beaufort (displayed as Beaufort IN) accounted for twenty percent percent of the total recorded visits. Residents of the three Beaufort ZIP Codes (shown as Beaufort OUT) who live outside City limits represented an additional eight percent. In all, residents of the three Beaufort ZIP Codes accounted for twenty-eight percent of recorded visits.

Residents of other nearby ZIP Codes (St. Helena Island, Okatie, Port Royal) comprised an additional twelve percent of recorded visits.

ZIP Codes for Ridgeland, Seabrook, and Sheldon accounted for one percent each of total visits.

Overall, forty-two percent of recorded visits came from residents of Beaufort County. This compares to thirteen percent for residents from the rest of South Carolina.

Residents of Georgia and North Carolina accounted for five percent each, with residents of Florida comprising four percent of the total tally.

Visits from US residents from states other than South Carolina, North Carolina, Georgia, and

Florida accounted for a full thirty percent of total visits recorded. Another one percent came from international visitors.

Overall, the size of Downtown Beauforts visitor market is large and diverse, with fifty-eight percent of recorded visits coming from individuals living outside of Beaufort County.

Beaufort IN 20%

Beaufort OUT 8%

St. Helena Island 6%

Okatie 4%

Port Royal 2%

Ridgeland 1%

Seabrook 1% Sheldon 1%

Rest of Lowcountry 6%

Midlands 4%

Upstate 2%

Savannah 1%

Rest of Georgia 4%

North Carolina 5%

Florida 4%

Rest of US 30%

Other 1%

Recorded Customer Visits

Beaufort County 42%

Rest of Lowcountry 7%

Midlands 4%

Upstate 2%

Savannah 1%

Rest of Georgia 4%

North Carolina 5%

Florida 4%

Rest of US 30%

Other 1%

Recorded Customer Visits

Figure 1: Recorded Customer Visits

Figure 2: Recorded Customer Visits


3 . 1 . 2 : Tr a d e A r e a D e f i n i t i o n

Although the number of visits provides an overall view of customer origin, a more accurate way to evaluate loyalty is to frame customer visits in the context of the population of each ZIP Code. This method corrects for ZIP Codes that have exceedingly large or small populations that might skew the market penetration data. The primary trade area is the geography where the most loyal and frequent customers to Downtown Beaufort reside. The secondary trade area represents an area where Downtown Beaufort businesses can still rely on regular customers, but to a lesser degree.

Table 1 shows customer visits per thousand residents, allowing for an equal comparison of market penetration per ZIP Code. It shows customer visits per thousand people for each of the highest representative visits to Beaufort.

Determining the primary and secondary trade areas can sometimes be more art than science. At times, significant breaks in customer visits are not obvious. In the case of Beaufort, however, there are two clear discontinuities that define its retail trade areas.

The first break separates Downtown Beauforts primary trade area from its secondary trade area. The visits per thousand figures for the Sheldon 29941, Beaufort 29902, Port Royal 29935, St. Helena Island 29920, and Beaufort 29907 ZIP Codes sit atop all other recorded visits. These five ZIP Codes (shaded pink in Table 1 and Figure 3) comprise the primary trade area.

The second break indicates Beauforts secondary trade area, which is composed of the Okatie 29909, Seabrook 29940, and Beaufort 29906 ZIP Codes. (The secondary trade area is shaded yellow in Table 1 and Figure 3.)

Zip Code Area Population Visits Visits/1000 Pop29941 Sheldon 336 36 107.1429902 Beaufort 17,499 585 33.4329935 Port Royal 3,796 122 32.1429920 St. Helena Island 9,541 278 29.1429907 Beaufort 12,876 344 26.7229909 Okatie 18,553 202 10.8929940 Seabrook 3,889 39 10.0329906 Beaufort 22,968 169 7.3629936 Ridgeland 12,261 41 3.3429910 Bluffton 37,010 96 2.5931411 Savannah 8,882 22 2.4829928 Hilton Head Island 16,250 30 1.85

29926 Hilton Head Island 23,921 40 1.67Beaufort IN 12020 996 82.86Beaufort OUT 41323 355 8.59

Table 1: Primary and Secondary Trade Areas Figure 3: Primary and Secondary Trade Areas


3.2: Trade Area DemographicsA clear comprehension of relevant demographic data is essential to understanding Beauforts retail market. Among other things, demographic data can be used to know the size and characteristics of the current market as well as to anticipate future consumer patterns and locational decisions for retailers.

The following population and employment statistics and projections compare Beaufort to nearby communities and show how Beauforts primary trade area, secondary trade area, and City of Beaufort relate to the region as a whole. (In the charts below, PTA represents Beauforts primary trade area and STA represents its secondary trade area.)

As detailed in Table 2, the 2013 population of Beauforts primary trade area is 44,048; its secondary trade area population is 45,410. This represents an overall consumer market of over 89,000 people, with the City of Beaufort (2013 population: 12,020) comprising just 7.4% of the combined trade area population. High population growth rates in the Beaufort 29907 and Port Royal

29935 ZIP Codes in the 2000-2010 decade lead to primary trade area growth of 8% during that same decade. At the same time, 289% population growth in the Okatie 29909 ZIP Code in the 2000-2010 decade led to 45% growth for the secondary trade area. Beneath both of these observed growth trends mask negative population growth in the Beaufort 29902 and St. Helena Island 29920 ZIP Codes in from 2000 to 2010. Additionally, population growth in the City of Beaufort has steadily declined since 2000, with historically smaller Bluffton surpassing it by 2010.

In terms of projected population growth, Beaufort is situated in the middle of a high-growth region driven by the major employment centers of Savannah and Charleston. From 2013 to 2018, Beauforts primary and secondary trade areas are expected to experience 2% and 6% growth, respectively. However, over the next five years, the population of the City of Beaufort is expected to decline by 1%, while Bluffton is expected to continue to grow at a rapid clip (around 12%). This is worrisome for the City of Beaufort, as the retail market for convenience and everyday shopping is dependent on rooftops and positive population growth. Although this trend is unlikely to impact

Place 2000 2010 2000-2010 2013 2018 2013-2018City of Beaufort 13,346 12,156 -8.92% 12,020 11,909 -0.92%PTA 40,439 43,687 8.03% 44,048 44,932 2.01%STA 30,220 43,809 44.97% 45,410 48,013 5.73%Bluffton 5,404 14,513 168.56% 15,809 17,723 12.11%Hilton Head 33,718 36,853 9.30% 37,320 38,302 2.63%Charleston 107,215 124,364 15.99% 130,290 139,309 6.92%Savannah 133,331 136,424 2.32% 141,055 148,937 5.59%Port Royal 10,380 10,953 5.52% 11,032 11,206 1.58%29902-Beaufort 18,082 17,582 -2.77% 17,499 17,478 -0.12%29906-Beaufort 21,912 22,866 4.35% 22,968 23,300 1.45%29907-Beaufort 9,316 12,564 34.86% 12,876 13,443 4.40%29935-Port Royal 3,260 3,725 14.26% 3,796 3,926 3.42%29920-St. Helena Is. 9,491 9,487 -0.04% 9,541 9,735 2.03%29940-Seabrook 3,936 3,904 -0.81% 3,889 3,897 0.21%29941-Sheldon 290 329 13.45% 336 350 4.17%29936-Ridgeland 9,366 11,743 25.38% 12,261 13,086 6.73%29909-Okatie 4,372 17,039 289.73% 18,553 20,816 12.20%PTA: 29941, 29902, 29935, 29920, 29907STA: 29909, 29940, 29906

Population Trends

-2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%

City of Beaufort

29902-Beaufort

29940-Seabrook

29906-Beaufort

Port Royal

PTA

29920-St. Helena Is.

Hilton Head

29935-Port Royal

29941-Sheldon

29907-Beaufort

Savannah

STA

29936-Ridgeland

Charleston

BluJon

29909-OkaLe

2013-2018 Projected Popula4on Growth

Table 2: Population Trends

Figure 4: Projected Population Growth


demand for specialty shopping and dining in Downtown Beaufort, it is likely to affect the locational decisions of small grocers and other retail types that may be a good fit for an enlarged Downtown district.

As shown in Table 3, employment in Beauforts primary trade area includes a large military population, with military personnel comprising 16% of its total workforce (compared to just 1% for nearby Bluffton). Within Beauforts primary trade area, the concentration of the military-employed is unevenly distributed, as this category accounts for 29% of the Beaufort 29902 ZIP Code workforce and less than 1% of the St. Helena Island 29920 ZIP Code workforce. As long as Beaufort and Port Royal maintain a robust military sector, there is little downside to this employment landscape. It is also important to note the percentage of residents not in the labor force in both trade areas. In the primary trade area, this figure is 33% (which is nearly identical to that of Charleston), while in the secondary trade area a full 49% are not currently in the labor force.

Place Military Civilian, Emp. Unemployed Not in Labor Force MHHI AHHI Avg. Unit ValueCity of Beaufort 15.34% 49.90% 4.73% 30.04% $43,723 $58,385 $171,895PTA 16.22% 46.37% 4.62% 32.79% $47,570 $62,595 $185,493STA 8.82% 38.06% 4.41% 48.70% $47,337 $61,800 $188,615Bluffton 1.35% 65.23% 8.04% 25.38% $54,613 $68,896 $196,921Hilton Head 0.87% 48.83% 4.24% 46.05% $63,555 $95,358 $405,166Charleston 0.44% 59.70% 6.27% 33.58% $46,986 $68,956 $243,826Savannah 1.14% 51.36% 5.53% 41.96% $31,844 $45,083 $144,312Port Royal 44.55% 33.35% 4.86% 17.25% $43,676 $55,022 $145,98829902-Beaufort 28.79% 41.48% 4.48% 25.26% $45,629 $61,304 $172,50429906-Beaufort 18.51% 47.21% 5.75% 28.54% $43,233 $54,160 $113,36329907-Beaufort 10.50% 56.99% 3.93% 28.58% $64,036 $77,491 $219,58429935-Port Royal 18.44% 52.33% 7.61% 21.62% $40,186 $47,904 $145,60829920-St. Helena Is. 0.01% 40.02% 4.42% 55.54% $36,074 $53,125 $170,34729940-Seabrook 1.48% 44.28% 8.38% 45.86% $30,982 $47,393 $73,93729941-Sheldon 2.15% 37.99% 9.32% 50.54% $30,652 $57,587 $98,75029936-Ridgeland 0.48% 48.95% 6.07% 44.50% $34,235 $49,687 $86,37529909-Okatie 0.72% 28.07% 2.41% 68.80% $55,764 $71,192 $229,696PTA: 29941, 29902, 29935, 29920, 29907STA: 29909, 29940, 29906

2013 Employment/Income

Table 3: Employment & Income


3 . 2 . 1 : M a r k e t S e gme n t a t i o n

Market segmentation summarizes demographic information into easy-to-understand categories. The market segmentation illustrated for Beauforts primary trade area uses Claritas PRIZM data. PRIZM defines every U.S. household in terms of sixty-six demographic and behavioral types to help determine lifestyles, purchasing behaviors, and preferences of the customer base. These data are arranged into Social, Lifestage, and Household groups. Each of these groups is detailed in Table 4.

3.2.1.1 PRIZM Social Group Segmentation

Claritas PRIZM provides insight into some of the shared social characteristics with its Social Group Segmentation categories shown in Figure 5. Major characteristics of the four PRIZM Social Groups represented in Beauforts primary trade area are described below. (Descriptions are provided by Nielsen Claritas.)

Rustic Living: 33% of Primary Trade AreaRustic Americans have relatively modest incomes, low educational levels, aging homes and blue-collar occupations. Many of the residents, a mix of young singles and seniors, are unmarried, and theyve watched scores of their neighbors migrate to the city. In their remote communities, these consumers spend their leisure time in such traditional small-town activities as fishing and hunting, attending social activities at the local church and veterans club, enjoying country music and car racing.

Rustic Living 33%

Country Comfort 29%

Middle America 25%

Landed Gentry 13%

PTA PRIZM Social Group Segmentation

Figure 5: Social Group Segmentation


Country Comfort: 29% of Primary Trade AreaCountry Comfort households are composed of predominantly white, middle-class homeowners. In their placid towns and scenic bedroom communities, these Americans tend to be married, between the ages of 25 and 54, with or without children. They enjoy comfortable upscale lifestyles, exhibiting high indices for barbecuing and playing golf as well as home-based activities such as gardening, woodworking and crafts. Reflecting their rural, family environment, they prefer trucks, SUVs and minivans to cars.

Middle America: 25% of Primary Trade AreaMiddle American households are filled with middle-class homeowners living in small towns and remote exurbs. Middle Americans tend to be white, high school educated, living as couples or larger families, and ranging in age from under 25 to over 65. Like many residents of remote communities, these conservative consumers tend to prefer traditional rural pursuits: fishing, hunting, making crafts, antique collecting, watching television and meeting at civic and veterans clubs for recreation and companionship. Friday nights are for celebrating high school sports.

Landed Gentry: 13% of Primary Trade AreaThe Landed Gentry social group consists of wealthy households who migrated to the smaller boomtowns beyond the nations beltways. Many of these households contain Boomer families and couples with college degrees, professional jobsthey are twice as likely as average Americans to telecommuteand expensive homes. With their upscale incomes, they can afford to spend heavily on consumer electronics, wireless and computer technology, luxury cars, powerboats, books and magazines, childrens toys, and exercise equipment.

PRIMARY TRADE AREA PRIZM NE - Primary Trade Area

Social Group Lifestage Name Households Pct. Pred. Inc. AgePred HH Comp. Pred. Tenure/Type

Pred. Education

Pred. Employment Pred. Race

Middle America Mainstream Families Kid Country, USA 1397 8.03% LowerMid Age


3.2.1.2 PRIZM Lifestage Segmentation

As shown in Figure 6, the primary trade areas share of PRIZM Lifestage categories is skewed towards the Younger Life category (in red), which accounts for 42% of the total population, with Family Life category (in blue) at 36%, and the Mature Years category (in green) at just 22%. Within each Lifestage category, darker shades represent subgroups with higher socioeconomic status, while paler shades represent lower status.

As is the case in many smaller cities and military communities, the population indexes at lower levels than the US average, as a full 25% of the total population falls into the Striving Singles subgroup. At the same time, there are pockets of middle-class prosperity and earned wealth within the primary trade area, as the solidly middle class Mainstream Families accounts for another 25% of the total and the well-to-do Affluent Empty Nests comes in at 7%.

Young Accumulators 2%

Mainstream Families 25%

Sustaining Families 7%

Affluent Empty Nests 7%

Conservative Classics 10%

Cautious Couples 11%

Midlife Success 6%

Young Achievers 7%

Striving Singles 25%

PTA PRIZM Lifestage Categories

Figure 6: Lifestage Segmentation


3.2.1.3 PRIZM Household Segmentation

Table 4 and Figure 7 detail all of the PRIZM segments included in Beauforts primary trade area. There are certain categories that only exist in urban markets that are not shown in this table.

Each of the detailed descriptions below is provided by and paraphrased from Nielsen Claritas descriptions of their PRIZM Household Segmentation data.

New Homesteaders: 11% of Primary Trade AreaYoung, upper-middle-class families seeking to escape suburban sprawl find refuge in New Homesteaders, a collection of small rustic townships filled with new ranches and Cape Cods. With decent-paying jobs in

Kid Country, USA 8%

New Homesteaders 11%

Red, White and Blues 6%

Young and Rustic 9%

Greenbelt Sports 6%

Back Country Folks 8%

Bedrock America 6%

Traditional Times 8%

Old Milltowns 4%

Big Fish, Small Pond 6%

Crossroads Villagers 5%

Heartlanders 5%

Simple Pleasures 4%

Golden Ponds 2%

Country Squires 2%

Fast-Track Families 2%

Mayberry-ville 3%

God's Country 2%

Blue Highways 2%

Country Casuals

1%

Shotguns and

Pickups 1%

Big Sky Families 1%

PTA PRIZM Household Categories

Figure 7: Household Segmentation


white and blue-collar industries, these dual-income couples have fashioned comfortable, child-centered lifestyles; their driveways are filled with campers and powerboats, their family rooms with PlayStations.

Young and Rustic: 9% of Primary Trade AreaYoung and Rustic Americans have relatively modest incomes, low educational levels, aging homes and blue-collar occupations. Many of the residents, a mix of young singles and seniors, are unmarried, and theyve watched scores of their neighbors migrate to the Town. In their remote communities, these consumers spend their leisure time in such traditional small-town activities as fishing and hunting, attending social activities at the local church and veterans club, enjoying country music and car racing.

Traditional Times: 8% of Primary Trade AreaTraditional Times is and older demographic without kids that have the kind of lifestyle where small-town couples nearing retirement are beginning to enjoy their first empty-nest years. Typically in their fifties and sixties, these upper-middle-class Americans pursue a kind of granola-and-grits lifestyle. On their coffee tables are magazines with titles ranging from Country Living and Country Home to Gourmet and Forbes. But theyre big travelers, especially in recreational vehicles and campers.

Kid Country, USA: 8% of Primary Trade AreaWidely scattered throughout the nations heartland, Kid Country, USA is a segment dominated by large lower income families living in small towns. Predominantly white, with an above-average concentration of Hispanics in some areas, these young, working-class households include homeowners, renters, and military personnel living in base housing; about 20 percent of residents own mobile homes.

Back Country Folks: 8% of Primary Trade AreaStrewn among remote farm communities across the nation, Back Country Folks are a long way away from economic paradise. The residents tend to be poor, over 55 years old, and living in older, modest-sized homes and manufactured housing. Typically, life in this segment is a throwback to an earlier era when farming dominated the American landscape.

Greenbelt Sports: 6% of Primary Trade AreaA segment composed of upscale exurban couples, Greenbelt Sports is known for its active lifestyle. Most of these older residents are married, college-educated, and own new homes. And few segments have higher rates for pursuing outdoor activities such as skiing, canoeing, backpacking, boating, and mountain biking.

Big Fish, Small Pond: 6% of Primary Trade AreaOlder, upper-class, college-educated professionals, the members of Big Fish, Small Pond are often among the leading citizens of their small-town communities. These upscale, empty-nesting couples enjoy the


trappings of success, including belonging to country clubs, maintaining large investment portfolios, and spending freely on computer technology.

Red, White, and Blues: 6% of Primary Trade AreaThe residents of Red, White & Blues typically live in exurban towns rapidly morphing into bedroom suburbs. Their streets feature new fast-food restaurants, and locals have recently celebrated the arrival of chains like Walmart, Radio Shack, and Payless Shoes. Middle-aged or older, with high school educations and midscale incomes, these folks are transitioning from blue-collar jobs to the service industry.

Bedrock America: 6% of Primary Trade AreaBedrock America consists of young, economically challenged families in small, isolated towns located throughout the nations heartland. With modest educations, sprawling families, and service jobs, many of these residents struggle to make ends meet. One quarter live in mobile homes. One in three havent finished high school. Rich in scenery, Bedrock America is a haven for fishing, hunting, hiking, and camping.


3.3: Market AnalysisIn this section, the Beaufort retail market will be examined to identify potential opportunities for new or expanded stores by examining retail leakage. This will allow the community to assess what kind of additional stores might be attracted to Beaufort and will help individual existing businesses understand how they might diversify product lines.

3 . 3 . 1 : R e t a i l L e a k a g e i n t h e Tr a d e

A r e a s

Retail leakage refers to the difference between the retail expenditures by residents living in a particular area and the retail sales produced by the stores located in the same area. If desired products are not available within that area, consumers will travel to other places or use different methods to obtain those products. Consequently, the dollars spent outside of the area are said to be leaking retail sales. Even large communities may see leakage in certain retail categories while some small communities may be attractors in categories.

Such an analysis is not an exact science. In some cases, large outflow may indicate that money is being spent elsewhere (drug store purchases at Walmart or apparel purchases through the Internet). It is important to note that this analysis accounts best for retail categories where householdsrather than businessesare essentially the only consumer groups. For example, lumberyards may have business sales that are not accounted for in consumer expenditures. Stores such as jewelry shops and clothing stores are therefore more accurately analyzed using this technique.

The leakage study for Beaufort is snapshot in time. Consequently, there are factors that point to

this being a more conservative or more aggressive look at retail potential depending on what factors are examined. For example, new residential development would mean that there would be more customers in the future resulting in greater demand for certain retail categories.

This leakage study only examines the primary and secondary trade areas identified for Beaufort. However, a successful store model might capture sales from well beyond this geography and could foster a strong visitor market as well.

Residents of Beauforts primary trade area, with a population of 44,048, accounted for $681.4 million in retail consumer spending in 2013. That same year, selected retail sales in primary trade area stores amounted to $447.8 million. Therefore, the primary trade area experienced overall sales leakage of $233.6 million in 2013.

Residents of Beauforts secondary trade area, with a population of 45,410, accounted for $784.2 million in consumer spending in 2013. That same year, selected retail sales in secondary trade area stores totaled $477.1 million. Overall, the secondary trade area experienced retail leakage of $307.1 million in 2013.

The combined trade area for Beaufort is a $1.47 billion consumer market with 2013 sales of $925 million. In 2013, Beauforts combined trade area experienced retail leakage of $541 million.

The type of retail leakage Beaufort is experiencing is unevenly distributed across retail categoriesthat is, some categories are experiencing an inflow of sales, while other categories are experiencing an outflow of local dollars. What this means is, depending on the business category, the Beaufort retail market is over- or underperforming as it


relates to its trade area market. It also means that certain retail categories are performing well with visitors, while others are not.

3 . 3 . 2 : D e t a i l e d R e t a i l M a r k e t P o t e n t i a l Ta b l e s

Table 5 details the individual retail categories in which Beaufort is leaking and gaining sales in its primary and secondary trade areas. This data should be used as an overall guide to retail market potential and should not substitute for detailed market research on the part of any business desiring to open in the area.

The left-hand column indicates retail store types along with North American Industrial Classification System (NAICS) codes for these stores. Please note that some categories are subsets of larger categories. The other columns represent the consumer demand in Beauforts trade areas. Red numbers indicate an inflow of dollars and black numbers indicate market leakage. It is interesting to note that both inflow and leakage present ample opportunity if interpreted appropriately within the context of the existing market.


Opportunity Gap - Retail Stores(Consumer

Expenditures) (Retail Sales)Leakage (Inflow)

(Consumer Expenditures) (Retail Sales)

Leakage (Inflow)

(Consumer Expenditures) (Retail Sales)

Leakage (Inflow)

Total Retail Sales Incl Eating and Drinking Places 681,485,895 447,847,006 233,638,889 784,167,170 477,074,250 307,092,920 1,465,653,065 924,921,256 540,731,809

Motor Vehicle and Parts Dealers-441 116,925,218 74,721,971 42,203,247 131,559,629 133,587,535 (2,027,906) 248,484,847 208,309,506 40,175,341 Automotive Dealers-4411 95,005,437 45,615,779 49,389,658 106,818,812 114,897,793 (8,078,981) 201,824,249 160,513,572 41,310,677

Other Motor Vehicle Dealers-4412 12,066,809 24,223,279 (12,156,470) 13,227,174 4,693,344 8,533,830 25,293,983 28,916,623 (3,622,640)

Automotive Parts/Accsrs, Tire Stores-4413 9,852,972 4,882,913 4,970,059 11,513,643 13,996,398 (2,482,755) 21,366,615 18,879,311 2,487,304

Furniture and Home Furnishings Stores-442 13,721,437 9,433,205 4,288,232 15,795,720 17,104,897 (1,309,177) 29,517,157 26,538,102 2,979,055 Furniture Stores-4421 7,277,454 2,641,579 4,635,875 8,285,705 6,654,094 1,631,611 15,563,159 9,295,673 6,267,486

Home Furnishing Stores-4422 6,443,983 6,791,626 (347,643) 7,510,015 10,450,803 (2,940,788) 13,953,998 17,242,429 (3,288,431)

Electronics and Appliance Stores-443 12,597,125 15,096,418 (2,499,293) 14,264,722 31,674,252 (17,409,530) 26,861,847 46,770,670 (19,908,823) Appliances, TVs, Electronics Stores-44311 9,164,319 5,319,760 3,844,559 10,317,893 26,617,359 (16,299,466) 19,482,212 31,937,119 (12,454,907)

Household Appliances Stores-443111 1,704,509 2,905,848 (1,201,339) 1,936,992 746,780 1,190,212 3,641,501 3,652,628 (11,127)

Radio, Television, Electronics Stores-443112 7,459,810 2,413,912 5,045,898 8,380,901 25,870,579 (17,489,678) 15,840,711 28,284,491 (12,443,780)

Computer and Software Stores-44312 3,131,656 9,776,658 (6,645,002) 3,591,881 5,056,893 (1,465,012) 6,723,537 14,833,551 (8,110,014)

Camera and Photographic Equipment Stores-44313 301,150 0 301,150 354,948 0 354,948 656,098 0 656,098

Building Material, Garden Equip Stores -444 72,193,828 50,404,055 21,789,773 84,557,699 69,892,242 14,665,457 156,751,527 120,296,297 36,455,230 Building Material and Supply Dealers-4441 61,762,260 49,245,433 12,516,827 72,746,167 68,284,371 4,461,796 134,508,427 117,529,804 16,978,623

Home Centers-44411 25,114,501 12,077,653 13,036,848 29,253,853 22,442,556 6,811,297 54,368,354 34,520,209 19,848,145

Paint and Wallpaper Stores-44412 1,057,260 1,723,519 (666,259) 1,270,741 1,602,238 (331,497) 2,328,001 3,325,757 (997,756)

Hardware Stores-44413 6,199,219 29,375,262 (23,176,043) 7,083,643 693,770 6,389,873 13,282,862 30,069,032 (16,786,170)

Other Building Materials Dealers-44419 29,391,280 6,068,999 23,322,281 35,137,930 43,545,807 (8,407,877) 64,529,210 49,614,806 14,914,404

Building Materials, Lumberyards-444191 10,765,990 2,271,234 8,494,756 12,700,081 16,296,357 (3,596,276) 23,466,071 18,567,591 4,898,480

Lawn, Garden Equipment, Supplies Stores-4442 10,431,568 1,158,622 9,272,946 11,811,532 1,607,871 10,203,661 22,243,100 2,766,493 19,476,607

Outdoor Power Equipment Stores-44421 3,258,056 194,310 3,063,746 3,716,060 62,254 3,653,806 6,974,116 256,564 6,717,552

Nursery and Garden Centers-44422 7,173,512 964,312 6,209,200 8,095,472 1,545,617 6,549,855 15,268,984 2,509,929 12,759,055

Food and Beverage Stores-445 87,392,158 67,365,615 20,026,543 101,676,189 35,488,415 66,187,774 189,068,347 102,854,030 86,214,317 Grocery Stores-4451 56,399,548 59,678,129 (3,278,581) 65,637,029 32,319,071 33,317,958 122,036,577 91,997,200 30,039,377

Supermarkets, Grocery (Ex Conv) Stores-44511 52,730,438 58,128,056 (5,397,618) 61,423,486 30,864,834 30,558,652 114,153,924 88,992,890 25,161,034

Convenience Stores-44512 3,669,110 1,550,073 2,119,037 4,213,543 1,454,237 2,759,306 7,882,653 3,004,310 4,878,343

Specialty Food Stores-4452 6,764,485 2,755,115 4,009,370 7,775,334 725,988 7,049,346 14,539,819 3,481,103 11,058,716

Beer, Wine and Liquor Stores-4453 24,228,125 4,932,371 19,295,754 28,263,826 2,443,356 25,820,470 52,491,951 7,375,727 45,116,224

Health and Personal Care Stores-446 43,209,653 52,174,185 (8,964,532) 55,689,485 22,103,193 33,586,292 98,899,138 74,277,378 24,621,760 Pharmancies and Drug Stores-44611 34,722,464 47,341,195 (12,618,731) 44,943,014 18,511,894 26,431,120 79,665,478 65,853,089 13,812,389

Cosmetics, Beauty Supplies, Perfume Stores 3,115,353 464,270 2,651,083 4,064,828 402,908 3,661,920 7,180,181 867,178 6,313,003

Optical Goods Stores-44613 1,480,854 307,897 1,172,957 1,664,916 1,793,926 (129,010) 3,145,770 2,101,823 1,043,947

Other Health and Personal Care Stores-44619 3,890,982 4,060,823 (169,841) 5,016,727 1,394,465 3,622,262 8,907,709 5,455,288 3,452,421

Gasoline Stations-447 67,215,931 55,644,329 11,571,602 74,512,151 57,796,756 16,715,395 141,728,082 113,441,085 28,286,997 Gasoline Stations With Conv Stores-44711 49,080,108 37,315,139 11,764,969 54,601,392 39,580,156 15,021,236 103,681,500 76,895,295 26,786,205

Other Gasoline Stations-44719 18,135,823 18,329,190 (193,367) 19,910,759 18,216,600 1,694,159 38,046,582 36,545,790 1,500,792

Clothing and Clothing Accessories Stores-448 30,223,309 30,393,761 (170,452) 32,194,222 21,762,414 10,431,808 62,417,531 52,156,175 10,261,356 Clothing Stores-4481 16,304,758 5,831,957 10,472,801 16,869,086 10,604,702 6,264,384 33,173,844 16,436,659 16,737,185

Men's Clothing Stores-44811 782,044 175,659 606,385 809,651 4,848,222 (4,038,571) 1,591,695 5,023,881 (3,432,186)

Women's Clothing Stores-44812 3,885,177 2,037,377 1,847,800 4,023,900 2,485,976 1,537,924 7,909,077 4,523,353 3,385,724

Childrens, Infants Clothing Stores-44813 1,054,010 0 1,054,010 1,070,034 0 1,070,034 2,124,044 0 2,124,044

Family Clothing Stores-44814 8,480,531 2,490,648 5,989,883 8,756,881 1,925,253 6,831,628 17,237,412 4,415,901 12,821,511

Clothing Accessories Stores-44815 696,878 304,116 392,762 720,113 0 720,113 1,416,991 304,116 1,112,875

Other Clothing Stores-44819 1,406,118 824,157 581,961 1,488,507 1,345,251 143,256 2,894,625 2,169,408 725,217

Shoe Stores-4482 2,488,181 1,249,402 1,238,779 2,514,943 662,782 1,852,161 5,003,124 1,912,184 3,090,940

Jewelry, Luggage, Leather Goods Stores-4483 11,430,370 23,312,402 (11,882,032) 12,810,193 10,494,930 2,315,263 24,240,563 33,807,332 (9,566,769)

Jewelry Stores-44831 10,213,502 17,022,172 (6,808,670) 11,504,496 10,494,930 1,009,566 21,717,998 27,517,102 (5,799,104)

Luggage and Leather Goods Stores-44832 1,216,868 6,290,230 (5,073,362) 1,305,697 0 1,305,697 2,522,565 6,290,230 (3,767,665)

Sporting Goods, Hobby, Book, Music Stores-451 13,076,528 2,000,521 11,076,007 14,342,176 1,724,864 12,617,312 27,418,704 3,725,385 23,693,319 Sportng Goods, Hobby, Musical Inst Stores-4511 11,364,092 1,398,038 9,966,054 12,454,992 1,431,410 11,023,582 23,819,084 2,829,448 20,989,636

Sporting Goods Stores-45111 5,893,777 218,724 5,675,053 6,211,581 429,341 5,782,240 12,105,358 648,065 11,457,293

Hobby, Toys and Games Stores-45112 3,345,161 960,963 2,384,198 3,796,526 537,606 3,258,920 7,141,687 1,498,569 5,643,118

Sew/Needlework/Piece Goods Stores-45113 1,070,108 39,294 1,030,814 1,286,011 339,366 946,645 2,356,119 378,660 1,977,459

Musical Instrument and Supplies Stores-45114 1,055,046 179,057 875,989 1,160,874 125,097 1,035,777 2,215,920 304,154 1,911,766

Book, Periodical and Music Stores-4512 1,712,436 602,483 1,109,953 1,887,184 293,454 1,593,730 3,599,620 895,937 2,703,683

Book Stores and News Dealers-45121 1,474,376 437,811 1,036,565 1,624,399 218,730 1,405,669 3,098,775 656,541 2,442,234

Book Stores-451211 1,301,337 437,811 863,526 1,428,181 218,730 1,209,451 2,729,518 656,541 2,072,977

News Dealers and Newsstands-451212 173,039 0 173,039 196,218 0 196,218 369,257 0 369,257

Prerecorded Tapes, CDs, Record Stores-45122 238,060 164,672 73,388 262,785 74,724 188,061 500,845 239,396 261,449

General Merchandise Stores-452 81,871,639 17,446,487 64,425,152 92,989,791 28,633,476 64,356,315 174,861,430 46,079,963 128,781,467 Department Stores Excl Leased Depts-4521 34,767,682 1,650,728 33,116,954 38,440,384 10,133,420 28,306,964 73,208,066 11,784,148 61,423,918

Other General Merchandise Stores-4529 47,103,957 15,795,759 31,308,198 54,549,407 18,500,056 36,049,351 101,653,364 34,295,815 67,357,549

Miscellaneous Store Retailers-453 18,849,107 6,143,701 12,705,406 21,457,358 3,587,710 17,869,648 40,306,465 9,731,411 30,575,054 Florists-4531 717,076 746,514 (29,438) 837,105 59,044 778,061 1,554,181 805,558 748,623

Office Supplies, Stationery, Gift Stores-4532 8,695,260 3,593,965 5,101,295 9,968,946 564,376 9,404,570 18,664,206 4,158,341 14,505,865

Office Supplies and Stationery Stores-45321 4,160,332 80,026 4,080,306 4,836,911 240,899 4,596,012 8,997,243 320,925 8,676,318

Gift, Novelty and Souvenir Stores-45322 4,534,928 3,513,939 1,020,989 5,132,035 323,477 4,808,558 9,666,963 3,837,416 5,829,547

Used Merchandise Stores-4533 1,304,775 757,788 546,987 1,390,021 1,880,311 (490,290) 2,694,796 2,638,099 56,697

Other Miscellaneous Store Retailers-4539 8,131,996 1,045,434 7,086,562 9,261,286 1,083,979 8,177,307 17,393,282 2,129,413 15,263,869

Non-Store Retailers-454 57,949,167 949,468 56,999,699 68,595,575 450,044 68,145,531 126,544,742 1,399,512 125,145,230

Foodservice and Drinking Places-722 66,260,795 66,073,290 187,505 76,532,453 53,268,452 23,264,001 142,793,248 119,341,742 23,451,506 Full-Service Restaurants-7221 29,910,594 48,284,825 (18,374,231) 34,568,531 41,762,483 (7,193,952) 64,479,125 90,047,308 (25,568,183)

Limited-Service Eating Places-7222 26,415,270 13,178,016 13,237,254 30,472,370 11,058,074 19,414,296 56,887,640 24,236,090 32,651,550

Special Foodservices-7223 7,099,097 4,493,884 2,605,213 8,195,548 274,877 7,920,671 15,294,645 4,768,761 10,525,884

Drinking Places -Alcoholic Beverages-7224 2,835,834 116,565 2,719,269 3,296,004 173,018 3,122,986 6,131,838 289,583 5,842,255

GAFO * 160,185,298 77,964,357 82,220,941 179,555,577 101,464,279 78,091,298 339,740,875 179,428,636 160,312,239 General Merchandise Stores-452 81,871,639 17,446,487 64,425,152 92,989,791 28,633,476 64,356,315 174,861,430 46,079,963 128,781,467

Clothing and Clothing Accessories Stores-448 30,223,309 30,393,761 (170,452) 32,194,222 21,762,414 10,431,808 62,417,531 52,156,175 10,261,356

Furniture and Home Furnishings Stores-442 13,721,437 9,433,205 4,288,232 15,795,720 17,104,897 (1,309,177) 29,517,157 26,538,102 2,979,055

Electronics and Appliance Stores-443 12,597,125 15,096,418 (2,499,293) 14,264,722 31,674,252 (17,409,530) 26,861,847 46,770,670 (19,908,823)

Sporting Goods, Hobby, Book, Music Stores-451 13,076,528 2,000,521 11,076,007 14,342,176 1,724,864 12,617,312 27,418,704 3,725,385 23,693,319

Office Supplies, Stationery, Gift Stores-4532 8,695,260 3,593,965 5,101,295 9,968,946 564,376 9,404,570 18,664,206 4,158,341 14,505,865

CombinedSTAPTA

Table 5: Retail Market Potential


3.4: Downtown Retail OpportunitiesThe retail market potential for Downtown Beaufort combines many different facets of the data gathered above. Not just a collection of numbers, retail markets depend on both quantitative and qualitative information. Moreover, simply because market potential exists for a prospective retail store type, this does not ensure the success of that store type in the community. There are many reasons why a business might succeed or fail and the retail market is but one of those factors. However, this section does provide a synopsis guide for the best potential retail opportunities in Beaufort.

3 . 4 . 1 : C l u s t e r i n g O p p o r t u n i t i e s

Clusters occur when several businesses of the same variety benefit from being in close proximity to one another. These are often identifiable from a large inflow of money into the community, but the type of business is critical to a successful cluster. Used merchandise is a common cluster, whereas an inflow of money in grocery stores would indicate a saturated market. The following indicate opportunities to growor continue to growclusters in Downtown Beaufort:

Full-Service Restaurants: Downtown Beaufort is a dining destination and a center of high-quality offerings for northern Beaufort County. Downtown arguably has the most significant dining cluster between Charleston and Savannah. In 2013, businesses in this category in the City of Beaufort accounted for $47.5 million in sales, compared to $8.7 million in spending by City residents. Although this large $38.8 million annual inflow includes a number of chain offerings on Boundary Street and Robert Smalls Parkway, a hearty portion of these sales may be attributable to Downtown businesses. The full-service restaurant industry is a notoriously difficult one in which to sustain a profitable business, but Downtown Beaufort enjoys a track record of success here. This suggests an opportunity for continued growth in this key category for Downtown.

Home Furnishings Stores: In 2013, retail sales in this category registered $6.8 million in Beauforts primary trade area. Primary trade area consumer expenditures were $6.4 million, which translated to an overall inflow of $348,000. While this inflow is relatively small, this category is poised for future growth, as long as the local second-home industry continues to rebound and Downtown retains its position as a destination shopping district.

3 . 4 . 2 : E x p a n s i o n O p p o r t u n i t i e s

In this context, expansion is referring to both expanding product lines in existing businesses and expanding retail offerings through new business recruitment. Retail leakage in these categories is an indicator that the market can support expansion. The following categories are suitable for expansion in Downtown Beaufort:

Specialty Food Stores: In 2013, this category registered primary trade area sales of $2.8 million in 2013, with primary trade area consumer spending of $6.8 million. This broad NAICS category


includes businesses with offerings at a range of price points. The leakage data suggest opportunities to capture both local and visitor dollars in this category. A small specialty grocer near downtown with fresh, local produce and seafood with a selection of higher- or lower-end offerings could take advantage of this unmet demand. (At the same time, a full-service grocer or discount grocer such as Aldi is unlikely to consider the Beaufort market, as supply and demand in the Grocery Stores category is at equilibrium and negative population growth is another dissuading factor.)

Beer, Wine, and Liquor Stores: In 2013, consumers in Beauforts combined trade area spent $52.5 million in this category. Combined trade area sales in this category were $7.4 million, which translates to overall leakage of $45.1 million. There is clearly an opportunity to recapture a share of these local dollars, not to mention dollars from Beauforts diverse visitor market.

Womens, Childrens, and Family Clothing: All of these categories are leaking at least one million dollars in sales in both primary and secondary trade areas. In one categoryChildrens, Infants Clothingthere are no sales in the combined trade area. Downtown Beaufort may be an appropriate location for unique clothing retailers in any or all of these categories.

Hobby, Toy, & Games: Although this category enjoys a successful new entrant into the Downtown market, the category still experienced $2.4 million in primary trade area leakage in 2013.

Sporting Goods Stores: This category represents a tremendous opportunity to fill a near sales void in the local market. A business model deserving special consideration is a sporting goods/outfitter in Downtown near the Beaufort River.

3 . 4 . 3 : O ve r a l l O b s e r v a t i o n s & N ex t S t e p s

In Downtown Beaufort, we find annual sales in a handful of retail categoriesHome Furnishings, Full-Service Restaurants, Jewelry Stores, Luggage and Leather Goods Storesto be pulling in millions of dollars from visitors to the area. At the same time, there are numerous opportunity gaps (sales leakage) in key retail categories that are often well suited to a downtown or specialty shopping district.

In Phase II of this project, the consultant team will explore the following emerging strategies

Retention & Recruitment: How to ensure the ongoing success of existing businesses, and to attract and nurture new businesses to fill out the Downtown market.

Growing the Local Market: How to recapture leaking retail dollars from Beauforts trade area consumer base, given current demographic and socioeconomic trends.

Extending the Visitor Experience: How to provide opportunities to expand visitor offerings in Downtown Beaufort to capture a greater share of visitor dollars.

Tying It All Together: A strategy devoted to organization, partnerships, and long-term planning.

1.1:Purpose1.2:Planning Process1.3:Acknowledgments2.1:Stakeholder Roundtables & Interviews2.2:Online Survey2.3:Observations3.1:Market Definition3.1.1:ZIP Code Results3.1.2:Trade Area Definition

3.2:Trade Area Demographics3.2.1:Market Segmentation

3.3:Market Analysis3.3.1:Retail Leakage in the Trade Areas3.3.2:Detailed Retail Market Potential Tables

3.4:Downtown Retail Opportunities3.4.1:Clustering Opportunities3.4.2:Expansion Opportunities3.4.3:Overall Observations & Next Steps

Downtown Beaufort Retail Market Analysis: PHASE I

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