Sweet Home shoppers say the products they want to buy in town more than anything else are clothing and shoes.
And because they can’t get those items in Sweet Home, at least not in the selection they want, most go to Lebanon, Albany or Eugene.
The unmet demand for goods and services in the local community is resulting in the current “leakage” or loss of some $38 million in business to other communities. Current and expected future demand translates into the potential for an eventual need for as much as 126,706 square feet of additional retail space in the Sweet Home market in the next decade and more distant future.
That information, and a lot more, is summarized in the final report on a Sweet Home market survey prepared over the last three months by Marketek, a Portland-based research firm.
Mary Bosch, one of the firm’s principals, met with local residents, city officials and representatives of the business community, the Chamber of Commerce and Sweet Home Economic Development Group on Tuesday and Wednesday of last week to discuss the findings and come up with an action plan to begin addressing some of the issues revealed in the survey.
After delivering the information gathered in her research, she said she said that she sees Sweet Home as “very conscious of wanting to move toward a brighter economic future” and said that is Sweet Home’s top competitive strength.
“You have momentum here and, I think, a real positive spirit,” Bosch said. “I was pretty excited as I was working here, and excited for you, and eager to capitalize on the energy that you all bring to building a better community.
“And quite honestly,” she added, “I do not say that in many places. You’re not paying me to say that. That’s not how I operate. You’ve got a lot going on and you’re ready to make things happen.”
The $13,500 study was financed by a $7,500 Rural Business Enterprise grant and $3,000 each from the city and SHEDG. In addition to surveys of local residents and business owners, it included multiple site visits by Bosch, interviews and a focus group with residents and business and community leaders, a statistical demographic market analysis, a competitive assessment and Bosch’s consultation in establishing a business development action plan.
Bosch said 23 percent of “almost 300” shopper respondents in the survey were between the ages of 45 and 54 and 20 percent were between the ages of 55 and 64, while ninety percent live in the Sweet Home Zip code. Five percent said they lived in the Lebanon Zip code, northwest of Sweet Home. Most (56 percent) said they live and work in Sweet Home. Bosch said the response to the survey was “excellent.”
The final report on the market study is posted on the city’s Web site at http://www.sweet-home.or.us/CivicAlerts.aspx?AID=58. The report includes a large appendix that specifies responses to the questions in the surveys, as well as other statistics.
Bosch presented an overview of the survey’s findings to City Council members and interested individuals on Tuesday evening before the council meeting.
“The purpose of this effort was to help gauge what the potential is for new small, retail business and how the community can sustain businesses where and grow them,” Bosch said. “The bottom line is everybody in community would like to see more sales retained, more customers shopping here, not only people that live here, but the visitors, the employment base, people passing through €“ how can we get more business, bottom line.
“It’s like a puzzle. It’s not a formula for success. You have to put the pieces together.”
Among the study’s findings were:
– Sweet Home came in “probably about fourth” behind Lebanon, Albany and Eugene as the top shopping destination. Bosch said selection was the biggest criteria for why people shop where they do.
– That more than one-third of respondents identified appliance repair, general health care and a copy center/pack and mail store as convenience goods and services needed in Sweet Home.
– Other popular wants included dental, vision and pediatric care, groceries and computer repair.
“I know that some of these niches are filled in part by existing businesses, but people are asking for more selection,” Bosch said. “People always want more choice.”
– Restaurants were of “great interest.” 58 percent of respondents said their top needs included steakhouse/grill and a bakery in Sweet Home. Many also said they want more family dining and a sit-down coffee house.
“Interestingly, even though you have several espresso stands, you don’t really have a coffee house and people would like a place to go and sit and maybe, like a wireless internet community-based coffee house,” she said. “I think you’ve got the drive-through things covered,” she added to laughter from the audience.
– When questioned about entertainment, residents said they want to see more children’s recreation and live music in town.
– Respondents who do not shop locally or use local service providers cite a lack of selection and high prices as their reasons.
A majority said they shop on Saturday afternoon (54 percent) or weekdays after 5 p.m. (52 percent).
“Two p.m. Saturday afternoon, nationwide, that’s when more people are out shopping than any other hour of the week,” Bosch said. “That’s good information for merchants, especially that after 5, which is when people are coming home.”
– Motivating shoppers to buy in Sweet Home are convenient location and the desire to support local businesses.
“They, of course, love the convenient location, but almost equally important is the desire to support local business,” Bosch said. “I don’t see that everywhere, so I think that’s a real kudo to the community, that there’s some recognition that they’d like to be of help to local businesses,”
However, shoppers also note poor selection, high prices, limited hours and the poor appearance of the downtown as reasons why they are less likely to shop locally.
“More so than I see in other communities, there’s a perception that the prices of local merchants are high,” Bosch said. She suggested that a public awareness campaign featuring price comparisons of popular items might dispel some perceptions that prices are higher in Sweet Home and turn shopping back toward the community.
– Under recreation, she noted that children’s recreation and live music were the two most highly desired items.
– Respondents would like Sweet Home to be seen as a “clean, country town,” Bosch said. Responses emphasize the importance of filling vacancies, improving building facades and generally sprucing up the downtown.
Bosch said the business survey drew 28 respondents, who came from a wide variety of enterprises and nearly two-thirds of whom had been doing business in Sweet Home for less than 10 years.
“Either they were brand new, with lots of ideas, or they have been here forever,” Bosch said of the mix.
A third reported that business has been down over the past year, a third said they have held their own and a third said they had seen expansion. She said none indicated they plan to shut down in the coming year or two.
“That’s fantastic,” she said. “Businesses are doing the right thing, finding a way to hang on in a slow economy. To me that’s a positive statement, a vote of confidence and testimony to the community of Sweet Home.”
Local business strengths included familiarity with customers and appreciation for their location, she said. Obstacles cited included include current economic conditions, low customer traffic and general operating costs.
“It’s harder to do business in a small town, especially a small town that’s the last stop before a big geographic barrier €“ the Cascade Mountains,” Bosch said. She added that business survey respondents also emphasized the need to clean up the downtown’s appearance. She said there wasn’t much interest in being a theme town, “which, generally, I think is a good thing.”
She said one of her favorite comments from respondents was that Sweet Home should be “a quaint little community at the foot of the Cascades.”
Market Analysis
Bosch said the retail market area for Sweet Home, which is “very, very close to the school district boundaries,” includes nearly 16,000 people €“ “nice, but small,” she said, and the community is growing, though slower than the state average. The median age is about 42, but 26 percent of the population in the market area is 19 years and younger while only 17 percent are 65 years or older.
“You’re not a senior-predominated market,” Bosch said. “If I go to coastal Oregon, those numbers are flip-flopped €“ you really have a high senior population €“ and in some remote rural towns. But you still have a preponderance of young people here. So it’s really important to pay attention to that when we talk about retail needs and interests. They have money to spend too and they also want to participate in bringing good businesses here.”
Her report estimates the median income within Sweet Home’s city limits at $38,887, while the median household income within the market area as a whole is $42,556, both below the state median income of $53,483.
She calculated the leakage €“ dollars spent by Sweet Home residents in other communities €“ in 2009 at $38,259,819, occurring in nine of 10 “major” categories €“ the only one in which supply outweighs demand being grocery products. The biggest single category of leakage was restaurants €“ $8,950,256, she said.
“You don’t have enough to capture the spending here or you don’t have the right types of businesses to capture the spending,”
Bosch told the audience. “That’s not a surprise because you yourselves have to leave town to take care of basic goods and needs. You have to because there’s not enough.”
She said she has calculated the potential demand within the retail market area is 25,582 square feet of new/rehabilitated retail and restaurant space over the next 10 years.
She said when expected future demand is calculated in, there is a total potential for 126,706 square feet of additional retail space in the Sweet Home market.
“Based on its existing commercial base, proposed developments, strong market demand and aggressive marketing, it is reasonable to assume that downtown Sweet Home could capture 50 percent of existing and future potential demand,” Bosch stated in her report. “This equates to 63,353 square feet of new retail space by 2019.”
Bosch said that success in transforming demand potential to new retail space in the downtown will depend on providing quality retail space and on Sweet Home’s marketing and business development efforts.
“A passive or segmented approach would likely result in downtown falling short of its estimated potential,” she said.
Competitive Analysis
Despite its small market size, which makes it less desirable to many national chains, and the fact that it cannot compete with Lebanon €“ though it can get out of Lebanon’s shadow “mentally,” Bosch said Sweet Home has “community momentum” and gets “high marks for reinvestment and emphasis on jobs growth.”
“Sweet Home needs to recreate its image to the external marketplace, sell some sizzle, share the vision €“ tell the success stories of strong business people here,” she said in her report.
On Wednesday, in a three-hour seminar focused on developing a plan based on the market study, Bosch suggested a number of steps the Sweet Home Area Revitalization Effort (SHARE) volunteers and Chamber of Commerce members could take, with leadership from Economic Development Director Brian Hoffman.
She cited examples of other cities, including Sandy and Myrtle Creek, which have used various creative means to occupy or disguise vacant downtown buildings, including lease agreements, using display windows in vacant buildings for art exhibits, a chamber display, or putting children to work to decorate such windows. She suggested that vacant windows could also be used to feature merchandise from businesses that do not have display capabilities.
Bosch recommended a wide variety of other strategies to attract and retain businesses, attract visitors and help build local support of businesses.
She suggested that Sweet Home “produce an attention-getting, catalytic transformation” of 10 downtown properties in the core blocks of downtown during 2010 €“ “create some ‘Wow.'”
She also suggested that SHARE and/or the chamber identify and redevelop one downtown property for “retail readiness” €“ possibly a currently vacant or underutilized space that can be improved without major physical restructuring to serve as a retail business location.
The report and seminar included other suggestions, such as:
– Developing a database of vacant commercial properties and inventorying them according to condition as far as being “retail-ready.” Bosch also suggested conducting an inventory and assessment of all other “pivotal, influential” properties in the downtown retail core€”especially ones where a change in occupancy may be desirable. She also suggested developing a “one-stop” Web site listing available commercial properties in the city.
– Contacting key property owners. Property owners are the lynchpins to the right tenancy as well as property improvements. The team will identify the best outreach mechanism and person for each key property owner and determine what information is needed.
– Selecting a number of properties and strategizing improvement, address chronic problem vacant properties head on, possibly by establishing a vacant building ordinance or municipal code language requiring that property owners take action to “clean up” rundown, noncontributing buildings.
– Cross-matching properties with business targets. “Work to fill vacant spaces with specific store types and tenants,” Bosch said. “This is especially needed downtown to promote clustering.”
РUse property improvement incentives, such as the existing fa̤ade improvement program.
– Creating window and retail display help and training opportunities.
– Organizing “shop local” campaigns and retail promotions to help encourage local spending.
– Organizing mutual support and cross-marketing efforts among local businesses, helping businesses expand their services and merchandise, and establishing programs and incentives to help businesses become more competitive and increase sales.
– Encourage youth entrepreneurship. Bosch cited a number of small, rural cities, including Independence and Lincoln City, in which teens, many from disadvantaged backgrounds, have established fully functioning retail businesses.
– Create teams to help businesses solve problems and perform some of the functions listed above.
She said a big challenge is that local residents are in the habit of going to where there’s more retail.
“You’re going to have to change those habits, and it’s not going to happen overnight,” she said. “It’s going to take a lot of organizing promotions, building consciousness about what it means when you take your dollars out of town or leave them in town and what the impact is.
“You’ve got to find a way not to guilt-trip people, but to make it very tangible. You don’t get good schools, good public facilities and quality businesses €“ you can’t have it both ways if you’re going to take your dollars out of town. So what do you want, community? That’s the question.”
Representatives of the city and business community praised the study, saying they expect it to help
“I do think it should help us a lot with some targeted enhancement, recruitment or assistance to various businesses,” said City Manager Craig Martin, who was a key figure in getting the study funded and commissioned.
He said that the information from the demographic and market analysis will help local businesses and the action steps recommended by Bosch “are going to be really helpful moving us forward.”
Chamber Executive Director Andrea Culy said that Bosch was able to help clarify objectives for the chamber and other entities interested in revitalizing the downtown.
“Having Mary here has directly affected our program of work this year and we will continue to use the information gleaned to determine some of our new goals,” Culy said of the chamber.
Brian Hoffman, who started his new job as Sweet Home Economic Development Group’s economic development director a week before Bosch’s report, said he thought her study was “fabulous.”
He said the next step is to “do our homework” and decide what businesses would “find us attractive.”
“The biggest thing she did was break it into small pieces.” he said. “It’s a systematic approach to getting where we want to be.
“When implementing community plans, this is the backbone of what we need to start with. Now we just need to go to work and make it happen.”
Bosch wound up her presentations on both Tuesday and Wednesday with encouragement for the efforts of SHARE, the chamber and the city to improve the business environment.
“Sweet Home, I think, is off the charts when it comes to a small town investing in itself,” she said, ticking off such efforts as the school bond passed by local voters, grants procured for public facilities, the median on Main Street €“ “a host of things.”
“Fifty-two million in public investment over 15 years €“ that’s stellar. You get 11 out of 10. I don’t see that in very many places at all. You are to be congratulated for that. I would absolutely promote that commitment to your future because that’s what it is.
“You are re-investing in yourself. And if I’m a business looking for a new location, I want to see that. Because a lot of towns are not. They don’t have the right attitude, they aren’t unified enough, they don’t have a vision, they are not following through.
“That’s a huge competitive advantage, so don’t forget about that.”