Why Crestpointe won’t prevent people from continuing to shop at Turkey Creek
Tim Holt has submitted a letter to the editor about a statistical analysis of shopping centers. This post is borrowed/modified from his to-be-published letter…A 1996 paper by by two university researchers, published in the Journal of Real Estate Research, examined the question: “How Critical Is a Good Location to a Regional Shopping Center?” The research used data from 38 regions containing multiple shopping centers and considered several primary variables believed to affect center’s success, including shopping center size in square feet, distance to the customers, and customer income levels.
A multivariate statistical analysis yielded the finding (surprising to the researchers) that a shopping center’s success was very strongly dependent on the center’s size and only very weakly related to distance from the customer. The study’s summary states:
The goal of this paper is to empirically measure the consumer utility trade-off between store location (i.e. distance to a shopping center) and retail agglomeration (shopping area size) in regional shopping centers. Using the Lakshmanan and Hansen retail expenditure model, our findings reveal that the distance specification is of surprisingly little importance in explaining retail sales. Conversely, agglomeration economies were of significant importance in explaining consumer patronage at regional shopping centers. The implications of these results is that smaller regional shopping centers may be dominated by large super-regional shopping centers with the smaller one or two anchor regional shopping centers unable to compete with the larger, many anchored super-regional shopping centers.
It is unrealistic to plan for the future with the expectation that a new shopping center that features some of the same stores as Turkey Creek will succeed in keeping Oak Ridgers away from Turkey Creek, or will attract droves of customers from Hardin Valley and Solway.
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At http://www.knoxnews.com, http://www.knoxnews.com/news/2007/jul/08/altar-call-for-customers/
I’m upset with tax abatements, it is “one sided capitalism”.
“Posted by andefromtn on July 8, 2007 at 5:44 a.m. ”
“Perhaps Penn State didn’t teach Leroy that when you only have x many dollars to feed your children or yourself then buying a can of beans on sale “is” what it is about. You have to be able to serve your target costumer, not your costumer serve you. If I, an East Knox resident, can go to your competitor and buy more groceries on my budget, guess what? I am going to Kroger, Food City or Save-a-lot to do so, regardless of anyone else’s plans for a shopping center. Lofty goals are one thing but the bottom line is if you can’t provide the goods at a price I can afford then I or anyone else can’t shop there even if we agree that we want economic development and improvements in our community. Economic development has to be good for both sides, both in the short and long term. You can’t expect the community to over pay for services or products just because you are next door to their house. That isn’t economic development, it is one sided capitalism. If Save-a-lot can build a new store and it is doing well only a short distance from this grocer then why did it succeed and IGA fold? Instead of blaming the community for lack of support prehaps the blame lays with the management of the site and the overall business plan.”
Elected officials are trying to solve community problems with money and not reality. Tax abatements need to stop; it only feeds the problem of a forgotten community.
Comment by Ray Kircher — July 8, 2007 @ 9:40 am