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EvaluatingGroceryStoreSiting:ACaseStudyatSE122ndandSEFoster

Introduction

Grocerystorelocationisachallengingproblembothfromthebusinessperspective(wherecouldaprofitablebusinesslocate?)andtheequityperspective(whereisfoodaccesslimitedorinequitablydistributed?).Thisprojectexaminesindustryassumptionsaboutgrocerystorelocationcombinedwithdemographicandothergeoanalyticprocesses.TheBureauofPlanningandSustainability(BPS)isconductingastudyoftheSE122ndAvenuecorridorfromDivisionStreetsouthtoFosterRoad.Thesouthernportionofstudyareahaslimitedgroceryaccess,asdeterminedbyseveralrecentstudiesoffoodaccessinPortland,includingtheMURPFoodability2009PlanningWorkshopstudycompletedlastyear.1(SeeImage1)Image1:Foodability

1Armstrong,Kim,ElizabethChapin,AprilChastain,JuliaPerson,StephanieVanRheen,andSteveWhite."Foodability:VisioningforHealthfulFoodAccessinPortland."Thesis.PortlandStateUniversity,2009.Print.

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Thereareseveralcontiguousvacantcommerciallotsinthesouthernportionofthearea.Communitymembershavesuggestedthatthesevacantparcels(hereafterreferredtoastheFostersite)shouldbeexploredasapotentialgrocerystorelocation.(SeeImage2)ThisanalysisexaminesthesuitabilityoftheFostersiteasagrocerystorelocationbasedonacombinationoftraditionallocationfactorsandmorerecentconsumerdemographicresearch.Image2:SE122ndAvenueLandUsebyTaxlot

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BackgroundandExistingConditions

Standardgrocerystorelocationdecisionstakeintoaccountthesizeofthelotofthepotentialbuildingandparkingsite,marketleakage,variationsinserviceareabystoretype,andpopulationneededtosupportastore.Morerecentresearchalsoexploresdemographictrendsinconsumerstorechoice.LotSize&MarketLeakageTheFostersitehasanareaofroughly63,605squarefeet.ThereareseveralgrocerystoresinPortlandonlotsofasimilarorsmallersize,includingdozensofspecialtystoresandthreeNewSeasonsMarkets.2AnESRIBusinessAnalystreportfortheFostersiteindicatesthatthereismarketleakageof$8,159,848forgrocerystoreswithinafiveminutedriveandof$871,087forspecialtystoreswithinathreeminutedrive.3Marketleakageiscalculatedasretailpotentialminusretailsupplyandisoftenusedineconomicdevelopmentresearchasoneindicatorofwhattypesofnewdevelopmentanareacansupport.StoreTypes&ServiceCatchmentAreasTherearedozensofdifferentschemesusedtocategorizegrocerystoresaccordingtostock,size,andownership.Forourpurposes,wedevelopedasimplifiedversionoftheschemefroma2004articlefromtheJournalofPlanningEducationandResearch,asdetailedlater.4Theauthorsofthearticlenotedthat"fewpeoplewouldsubstitutewalkingfordrivingtothegrocerystore,evenifaccesswereexcellent."5Thisfinding,coupledwithourlimitedtimeframeandthetraditionallocationdecisionparametersledustofocusonautomobilesforthecreationoftheanalysisnetwork.Asupermarketgenerallyhasaconsumercatchmentareaofthreemilesorafiveminutedrive‐time.Specialtystorestypicallyhaveasmallercatchmentareaofonemileorathreeminutedrive‐time.Largediscountstoresoftenoperateataregionallevel,soatenminutedrive‐timeisaconservativeestimateoftheircatchmentarea.6DemographicTrendsDunkleyalsoreviewedexistingliteratureaboutconsumerdemographicsandpreferences,withfindingsrelevanttothisanalysis.Asincomeandeducation

2BureauofPlanningandSustainability,AlmaL.SelectGroceryStoreSizeTypesandMarketforPortland.Rep.Portland:BPS,2007.Print.3ESRIBusinessAnalystOnline.RetailMarketplaceProfile.Rep.2009.Print.4Dunkley,Bill,AmyHelling,andDavidSawicki."AccessibilityversusScale:ExaminingtheTradeoffsinGroceryStores."JournalofPlanningEducationandResearch23.4(2004):387‐401.CSAWebIllumina.Web.20Nov.2009.<http://csaweb105v.csa.com>.5393

6Flores,Alma.Personalinterview.18Nov.2009.

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decrease,orashouseholdsizeincreases,likelihoodofshoppingindiscountstoresincreases.Size‐constrainedgrocerystoresaremoresuccessfulinareasofhighincomeorinareaswherethereisalargepopulationwithoutpersonalvehicles.A2006articlefromtheInternationalJournalofRetail&DistributionManagementconcludedthatsupermarketpatronage(especiallyof"traditionalneighborhoodmarkets")increaseswithdecreasinghouseholdsize.7

MethodologyOverview

InordertoexaminethesuitabilityoftheFostersite,thisanalysisdrawsonPortlandgrocerystoredatafromBPS,PortlandstreetsdatafromMetro'sRegionalLandInformationSystem,anddemographicinformationfromthe2000Census.GroceryStoreDataThefirststepinthisanalysiswastogeocodeandmapalistofPortlandgrocerystorestoexaminemarketcoveragebystoretypeandtoassessthestoreserviceareasfordemographicorgeographictrends.ApreliminarylistwasreceivedfromBPS,updatedwithrecentlyopenedstores,geocoded,andcategorizedtouseintheanalysis.A.Stepstoanalyzethegrocerystoredatawereasfollows:(SeeImage3)1. ObtainedlistofGroceryStoresfromBPS.2. Addedknownmissingstores(GroceryOutlet,NewSeasons,Pastaworks).3. GeocodedtoPortlandStreetswitha98%matchrateandmatchedthe

remainingstoresmanually.4. Removedlocationsoperatingonlyaswholesalers.5. Assignedacategorytoeachlocationaccordingtosimplifiedscheme

informedbytheliteraturereview:• Supermarket‐full‐servicechainorindependentgrocerystore(ex.:

Albertsons)• Gourmet‐limitedselection;littletonononfooditems(ex.Zupan's

Market)• Specialty‐ethnicstores,greengrocers,bakeries,seafoodmarkets,

butchers,etc.(ex.:AnDongMarket)• Discount‐supercenters,warehouse/wholesalesellers(ex.:Winco)• Massmerchant‐departmentalizedstorethatsellsfoodinadditionto

otherhouseholdgoods(ex.:FredMeyer)

7Carpenter,Jason,andMargueriteMoore."Consumerdemographics,storeattributes,andretailformatchoiceintheU.S.grocerymarket."InternationalJournalofRetail&DistributionManagement34.6(2006):434‐52.Emerald.Web.20Nov.2009.<http://www.emeraldinsight.com>.

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Image3:GroceryStoresinPortland

StreetNetworkNextastreetnetworkwascreatedusingtheMetroRLISstreetsfile.Lengthswereconvertedtomilesanddrive‐timeswereassignedbasedonspeedlimitassumptionsdetailedbelow.B.StepstocreateaPortlandstreetnetworkwereasfollows:1. Addedamilesfieldtotheattributetableforthestreetshapefile.Themiles

werecalculatedaslength/5280.2. Addedaspeedfieldtotheattributetableforthestreetshapefile.Valuesfor

thespeedfieldwerepopulatedasbelow,accordingtostreettypeandinmilesperhour:

• Freeways=55• Highways=45• Primaryarterials=35• Secondaryarterials=30• Otherarterials=30• Allothers=25

3. Addedtwofields,"TF_Minutes"and"FT_Minutes"andcalculatedbothoftheirvaluestobemiles*60/speed.

4. Theseadditionsallowedforthecreationofanetworkdatasetthatcouldevaluatearoutebasedontimeimpedance.

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ServiceAreaAnalysisDrawingontheliteraturereviewedandcategoriesofgrocerystores(gourmet,specialty,supermarket,massmerchantanddiscount),standardbusinessmarketcatchmentareaswereassignedtoeachcategory.Networkanalystwasusedtocreateserviceareapolygonsaccordingtotheassigneddrive‐timecatchmentforeachstoreonourlist,aswellasforasitemanuallycreatedattheFostersite.C.Stepstocompleteaserviceareaanalysiswereasfollows:(seeModel&Image4)1. BasedonBPSinformation,dividedgrocerystoresintothreedrive‐time

catchmentgroupsandranthreeseparateserviceareaanalyses,changingonlytheimpedancebreaks.

• Discountstoreserviceareas:10minutebreak• Massmerchantandsupermarket:5minutebreak• Specialtyandgourmet:3minutebreak

2. Eachanalysisgeneratedoverlappingpolygons,androuteswerecalculatedtowardsthefacility.

3. ManuallycreatedafacilityattheFostersite.Ranserviceareaanalysiswith3,5,and10minutebreaks,calculatedtowardsthefacility.

4. IndividuallyselectedFostersiteandcomparisonstorepolygons(seestepD.3),savedaslayer,andthenexportedasshapefilestouseinclipprocessinstepD.5.

Image4:NetworkAnalystServiceAreasbyStoreType

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DemographicRastersDemographicdatawereusedtoassessthemarketdemographicsofapotentialnewgrocerystoreandofselectexistinggrocerystorelocations.Theliteraturereviewsuggestedthatcertaindemographicgroups(particularlyinrelationstohouseholdsize,medianhouseholdincomeandnumberofhouseholdswithoutamotorvehicle)providedfavorablemarketconditionsfordifferenttypesofstores.RasterswerecreatedfromCensusblockgroupdataandclippedtostorepolygonsinordertocompareourpotentialsitetoexistingstores.D.RastersofMedianIncome,HouseholdSizeandHouseholdswithNoVehicle1. Downloaded2000blockgroupCensusdataforMultnomahandClackamas

Counties(Householdsize(P14);Income(P53);Carownership(H442. Downloaded2000blockgroupshapefilesforMultnomahandClackamas

Countiesandmergedintooneshapefile.3. Joinedmergedblockgroupshapefiletodatatablefromstep1,basedonFIPS.4. Createdrastersurfacesforeachofthethreedemographicvariablesforusein

visualcomparisontoFostersite.1. Usedfeaturetopointconversiontoextractblockgroupcentroids.

Thesecentroidsprovidepointdataforthefollowingrasterinterpolationprocesses.IDWmethodchosentoavoidvaluesbelow0forallfactorsandabove100%forpercentageofhouseholdsowningnovehicles.

2. InterpolatedarastersurfaceforeachdemographicfactorusingIDW.▪ NoVehicle‐IDW2.0power,8points,10560feetmaxradius

(SeeImage5)▪ Householdsize‐IDW2power,8points,10560feetmaxradius

(SeeImage6)▪ MedianIncome‐IDW2.0power,8points,10560feetmax

radius(SeeImage7)3. ChoseotherstorecatchmentareastoanalyzeinstepD.5.5.Visually

examinerasterstochooseareaslikelytohavesimilarcharactertoFostersite(basedonmedianincome,householdsize,andnovehiclepercentage).

5. Createrastersurfacesfordemographicdataforeachoftherelevantserviceareapolygons:(seeModel)

1. ForeachofthethreeFostersiteservicepolygonscreatedinstepC.4,clippedthemergedblockgroupshapefilefromstepD3tothepolygon.

2. Convertednewpolygonstorasterbasedoneachofthethreedemographicfactors:householdsize,medianincome,and%householdswithnovehicle.

3. Examinedrasterstatisticsforeachofthedemographicfactors.

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4. Theserviceareafordiscountstoreshasahigherincomeandsmallerhouseholdsizethantheotherserviceareas.Thesegroupsarenotaslikelytoshopatdiscountstores.Thedemographicstatistics,coupledwithsizeconstraintsofsite,ledustoexcludediscountstoresfromfurtheranalysis.

5. Foreachservicepolygonofselectedcomparisonstores(stepD.4.3),clippedthemergedblockgroupshapefilefromstepD3tothepolygon.

6. Convertednewpolygonstorasterforeachofthethreedemographicfactors:householdsize,medianincome,and%householdswithnovehicle.

Image5:PortlandAreaHouseholdswithNoMotorVehicle

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Image6:PortlandAreaAverageHouseholdSize

Image7:PortlandAreaMedianHouseholdIncome

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ModelDemonstratingStepsTaken

FindingsDiscountStoreThefirststoretypethatweexaminedwasthelargediscountgroceryretailerwithatenminutedrive‐timeservicearea.AreviewoftheserviceareaincomparisontotheexistingaggregateserviceareafordiscountgrocerystoresinPortlandrevealedthatrelativelylittleuniqueserviceareawouldbeincludedfortheSEFosterRoadsite.(SeeImage8)

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Image8:PotentialDiscountStoreCatchmentArea

10 Minute Drivetime

Income Household Size% Households with no vehicle

Discount Mean $48,290 2.65 6.96%Range $15,787 - $100,514 1.61 - 3.45 0 - 39.6%

122nd Ave Site

AreviewoftheFostersiteshowsthattheserviceareafordiscountstoreshasarelativelyhighincomeandsmallhouseholdsize.Priorstudieshaveshownthatthesegroupsarelikelytoshopatdiscountstores.Thisbasicdemographicdata,coupledwithsizeconstraintsofthesiteandthelackofnewserviceareathatwouldbecreated,ledustoexcludediscountstoresfromfurtheranalysis.Gourmet&SpecialtyStoresToexaminethepossibilityofsitingagourmetorgrocerystoreatoursite,welookedatthethreeminutedrive‐timepolygonscreatedinournetworkanalysis.Byexaminingourrastersformedianincomeandthenforhouseholdswithoutamotorvehicle,weidentifiedtwostoreswithserviceareassimilartothatinthethreeminutecatchmentareaoftheFostersite‐onegourmetstore(Zupan’s)andonespecialtystore(HongPhat).ThethreeminutecatchmentareaoftheFostersite,alongwiththatoftwoselectedstoresareshownbelow.(SeeImage9)

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Image9–GourmetandSpecialtyStoreCatchmentAreas

3 Minute Drivetime

Income Household Size% Households with no vehicle Income Household Size

% Households with no vehicle

Specialty Mean $46,361 2.78 4.96% Specialty Mean $40,820 2.57 6.30%Range $32,083 - $65,655 2.42 - 3.10 0 - 20.4% Range $26,889 - $62,411 2.03 - 3.18 0 - 31%

Gourmet Mean $58,249 2.05 5.24%Range $25,333 - $85,000 1.57 - 2.50 0 - 34.2%

122nd Ave Site Comparisons

Lookingtothegrocerysitingliterature,whichpointedtohigheraveragehouseholdincomesasbeingakeyfactorinthesuccessofagourmetstore,wedeterminedthatsuchastoremightstruggleattheFostersite;itshouseholdincomewassubstantiallybelowthemedianincomeofthecomparisonstore‐$46,361comparedto$58,249.Basedontheliteratureandonthecomparisonofthesetwoareas,theFostersiteislikelytobebetterservedbyaspecialtystorethanbyagourmetstore.Supermarkets&MassMerchantsThethirdcomparisonwasbetweenafiveminutedrive‐timeserviceareafromtheFostersiteandthecatchmentareasoftwoothergrocerystores‐atraditionalsupermarket(Albertson's)andamassmerchant(FredMeyer).Theserviceareapolygonscreatedfromthesethreesitesinnetworkanalystcanbeseenbelow.(SeeImage10)

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Image10–SupermarketandMassMerchantCatchmentAreas

5 Minute Drivetime

Income Household Size% Households with no vehicle Income Household Size

% Households with no vehicle

Supermarket Mean $46,682 2.78 7.25% Supermarket Mean $48,318 2.79 6.77%Range $15,787 - $84,278 2.05 - 3.45 0 - 39.6% Range $21,146 - $78,262 1.94 - 3.26 0 - 28.4%

MassMerchant Mean $38,997 2.74 8.86%Range $21,146 - $78,262 1.92 - 3.39 0 - 28.4%

122nd Ave Site Comparisons

Literatureshowedthathouseholdsizeisnegativelyandmedianincomeispositivelycorrelatedtothesekindsofstores,sowelookedtoourdemographicrastersintheseareas.TheFostersiteissimilartobothofthecomparisonsitesandlooksasthoughitmightbeabletosupporteitherkindofstore.Lookingbacktoouravailablesitesize,itappearedasthoughthemassmerchantstorewasnotagoodfit;however,asmallsupermarketmightbeapossibility.

Conclusions

Thesizeofthesitewoulddetermostsupermarketdevelopers,althoughasmentionedpreviously,thereareatleastthreeNewSeasonsMarketsinPortlandonlotssmallerthantheFostersite.Specialtystoresoftenrequiremuchlesslandthansupermarkets,though.Giventhedemographicsofthearea,webelieveaspecialtyethnicmarketwouldservetheareawell.Nextstepsforthisanalysiscouldincludeworkingwithsmallsupermarketdevelopersorwiththelocalbusinessdistrict

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memberstoattractanappropriatespecialtystore.However,therewereseverallimitationstoouranalysis.Thereareundoubtedlyseveralgrocerystoresmissingfromthelist,andsupplementalfoodacquisitionlocations(suchasminimarts)werenottakenintoaccount.Inaddition,buildingsquarefootageplaysanimportantroleinstoresitingandinthevolumeofsalesneededtosupportastore.Thisanalysisoriginallyincludedsquarefootagefromtaxlotparcels,buthereagain,thedatawasincompleteandoftenincorrect.Thiswasparticularlytrueformixed‐usesites,wherethebuildingsizeoftenincludedallunitsonthesite,oratleastallcommercialunits.Mostshoppersfrequentmorethanonestore,andstorechoiceoftendependsonthenatureofthetrip.Inordertofullyunderstandthegroceryneedsinthearea,residentsurveysandmarket‐basketsurveyswouldneedtobecompleted.Interviewswithgrocerydevelopersandwiththeownersofexistingspecialtystorescouldprovidevaluableinsightintothedecision‐makingconstraintsthattheyface.ESRIGIStoolscanprovideapowerfulandflexiblewaytoanalyzedata,butforthisproject,thedataitselfwastoolimitedtogeneratearobustexamination.