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TABLE OF CONTENTS
Section Number I. II. Title ASSIGNMENT Study Assumptions EXECUTIVE SUMMARY General Findings Conclusions Recommended Actions Estimated Retail Sales by Retail Category Prospective Major Retailers Lifestyle Tenants in Lifestyle Center Not in Lincoln Mall Mattesons Shopping Centers METHODOLOGY AND DEFINITIONS Methodology Definitions LINCOLN MALL AREAS RETAIL CONCENTRATION Mattesons Retail Sales Comparison of Lincoln Mall to Eight Other Malls Comparison of Lincoln Mall to Four Lifestyle Centers Matteson Shopping Centers - Part of the Lincoln Mall Area RETAIL TRENDS National Trends Chicagoland Retail Situation Retail Development and Vacancy Big Box Discount Department Stores and Supercenters Department Stores Supermarkets and Warehouse Stores Drug Stores Electronics Stores Furniture Stores Home Improvement Stores Restaurant & Quick Service Casual Facilities RETAIL MARKET ANALYSIS Site/Location Accessibility Traffic Counts Driving Time Analysis Trade Area Delineation Trade Area Market Support Factors Page Number 1 2 3 3 3 11 11 15 15 16 20 20 23 26 26 27 29 31 32 32 33 34 35 36 37 38 38 38 39 39 41 41 41 42 43 44 44
III.
IV.
V.
VI.
Title RETAIL MARKET ANALYSIS (Continued) Competitive Environment Orland Park Homewood/Glenwood Tinley Park Crestwood Country Club Hills Calumet City Planned and Proposed Shopping Facilities Retail Expenditure Patterns Market Penetration Estimated Retail Sales by Retail Category Home Improvement General Merchandise Food Stores Furniture & Home Furnishings Electronics & Appliances Eating & Drinking Drug and Miscellaneous Prospective Major Retailers Lifestyle Tenants not located in Lincoln Mall Mattesons Shopping Centers near Lincoln Mall Introduction to Melaniphy & Associates, Inc.
Page Number
48 49 51 52 52 52 52 53 53 60 63 63 63 64 64 64 65 65 66 66 68 Addenda
LIST OF TABLES
Number
2.1 2.1 2.2 2.3 4.1 4.2 4.3 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8
Title
Market Support Factors, Matteson Trade Area Market Support Factors, Matteson Trade Area (Continued) 2006 Retail Sales and Market Penetration Matteson, Illinois
Page Number
6 7 8 19 27 28 30 46 - 47 50 54 - 57 58 58 60 61 62
Estimated Retail Expenditures, Market Penetration, & Matteson Estimated Retail Sales, 2006, 2010, & 2015 Matteson Retail & Foodservice Sales 2002 2005 Comparison of Chicagoland Selected Malls to Mattesons Lincoln Mall Comparison of Chicago Lifestyle Center Demographics Market Support Factors Lincoln Mall Area Trade Area Competitive Retail Facilities 2002 Retail Sales, Cook County, City of Chicago, and Matteson Retail Sales by County, Chicago Metropolitan Area, 2003 - 2005 Matteson Retail & Foodservice Sales 2002 2005 Per Capita Retail Expenditures by Retail Category, 2006, 2010, & 2015 Mattesons Estimated Retail Expenditures by Retail Categories, 2006, 2010, & 2015 Estimated Retail Expenditures, Market Penetration, & Matteson Estimated Retail Sales, 2006, 2010, & 2015
LIST OF FIGURES
Figure Number
2.A 4.A 6.A 6.B 6.C 6.D 6.E
Description
Matteson Trade Area Lincoln Mall Redevelopment, Matteson, Illinois
Page Number
4 26 41 42 43 45 51
Aerial View, the Lincoln Highway and Cicero Avenue Interchange Adjacent to Interstate the Interstate 67 Interchange Traffic Counts for Major State and Federal Roads, Illinois Department of Transportation, Matteson, Illinois Driving Time Analysis 10 & 20 Minutes, Lincoln Mall Area Matteson Trade Area Map 10 Mile Radius Map, Lincoln Mall, Matteson, Illinois Showing Position of Orland Square Mall & River Oaks Center
ASSIGNMENT
Our assignment has been to undertake a Retail Market Feasibility Study in and around Lincoln Mall at the intersection of Lincoln Highway (U.S. Highway 30), Cicero Avenue (Illinois Highway 50), and Interstate 57 in Matteson, Illinois. Our study included the following:
A. Preparation of a Market Feasibility Analysis which determined the extent of the current and
issue.
D. Determination of Mattesons overall market penetration and by major retail categories. E. Identification of prospective stores that should be in the Lincoln Mall area retail
concentration.
F. Preparation of action recommendations to address the image, market, and prospective new
tenants and big box retailers that can flourish and improve retailing and sales tax revenue in the Village STUDY ASSUMPTIONS The project was carried out under the following assumptions: 1. No major malls, shopping centers, or major big box competitors, other than those identified in this report will be constructed within the Primary or Secondary portions of the Trade Area. Any such development would require a reassessment of the conclusions and recommendations contained herein. 2. The economy of the United States will not experience another major recession or inflation that would result in a significant adjustment in consumer spending or buying attitudes. 3. Gasoline prices will not consistently exceed $3.50 per gallon for an extended period of time. If this occurs, significant changes may occur in shopping and spending patterns. 4. The United States will not expand the current war on terrorism or escalate military operations overseas, nor will the United States experience any major catastrophe or terrorist act that would interrupt shopping, driving, mail delivery, or spending patterns. -1-
Retail Market Feasibility Study, Lincoln Mall Area, Matteson, Illinois 5. A considerable amount of data has been gathered, sorted, and analyzed. Much of the data has come from agencies of federal, state, county, and the Village of Matteson, along with local real estate companies. Additionally, secondary sources have been utilized, where pertinent. Where possible, our staff has examined the information for its validity and authenticity. Since we have no way of controlling the development of these data sources, we take no responsibility for any inaccuracy. During the course of the study program we have utilized standard statistical techniques involving both subjective and objective judgments in order to arrive at the conclusions and recommendations. 6. We certify that we have no present of prospective interest in the properties in the Matteson area that are the subject of this report and we have no personal interest or bias with respect to the parties involved. Our compensation is not contingent upon any action or event resulting from this analysis, opinions, or conclusions, in or use of this report.
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EXECUTIVE SUMMARY
The conclusions and recommendations resulting from this market study are contained throughout this report. However, for convenience, this section of the report summarizes our findings. GENERAL FINDINGS 1. Matteson is a dynamic retail Chicagoland suburb. While Matteson only has a population of approximately 15,000 people, the Communitys retail sales are the 16th largest in the metropolitan area. In 1998, Matteson was in the 21st position with sales of $440 million. In 2005, Mattesons retail sales amounted to approximately $804.7 million. The sales were down slightly from the 2004 sales of $804.8, but up from the 2003 retail sales of $789.9 million according to the Illinois Department of Revenue, Sale Tax Receipt reports. 2. Matteson has over 2,700,000 square feet of retail space, including Lincoln Mall, numerous other shopping centers, and large big box stores. 3. Mattesons population size has been more of a limiting factor in retail sales growth, than retailer store interest. The Village has a population of approximately 15,000 and a Primary Trade Area population of 151,534 persons. Most major mall areas have higher population numbers. More population growth in Matteson and its adjacent suburbs will have a positive impact upon retail sales. 4. The Lincoln Mall Area has excellent access. Lincoln Highway (U.S. 30) is a major eastwest traffic artery extending from the Indiana-Illinois state line to Frankfort, Illinois and beyond. .Cicero Avenue (Illinois 50) is a major north-south artery that traverses most of the Chicagoland area. Interstate 57 connects the City of Chicago with Memphis, Tennessee and beyond. All of these routes contribute to the importance of retailing in Matteson. 5. Mattesons current Average Household Income is estimated at approximately $72,500. By 2010, Average Household Income is expected to rise to approximately $80,000. 6. The planned third Chicagoland Airport, should it be built, will add to the Mattesons area dynamics with new housing, jobs, and increased retail sales. CONCLUSIONS 1. Mattesons Trade Area extends northward to Interstate 80, eastward to just beyond Illinois Highway 1, southward to Manteno, and westward to Frankfort. Mattesons Trade Area is proscribed by major malls and retail concentrations in Orland Park, Homewood, Tinley, Park, Crestwood, Calumet City, and developing retail concentrations in Frankfort and Kankakee. Figure 2.A depicts the Total Trade Area of the Matteson retail concentration emanating from Lincoln Highway, Cicero Avenue and Interstate 57.
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Retail Market Feasibility Study, Lincoln Mall Area, Matteson, Illinois 2. The Primary Trade Area, the segment from which the most frequent customers originate, has a current estimated population of 151,534 persons in 52,006 households. The Average Household Income is estimated at $72,452. By 2010, population of the Primary Trade Area is expected to rise to 158,630 persons in 51,989 households. Average Household Income is expected to rise to approximately $80,000. Table 2.1, entitled, Market Support Factors, provides demographic details for the Trade Area. The Secondary Trade Area, represents that trade area segment where less frequent shoppers originate, contains a population of 115,293 persons in 38,792 households. The population is forecast to 123,890 persons by 2010 and 131,323 persons by 2015. The median age is moderately younger than the Primary Trade Area amounting to an estimated 36.2 years. The average annual household income within the Secondary Trade Area is slightly higher than the Primary Trade Area amounting to an estimated $74,404. Average household is expected to increase to an estimated $83,383 by 2010. The Total Trade Area, including both trade area segments, contains an estimated population of 266,827 persons in 90,798 households. By 2010, the population within the Total Trade Area is forecast to rise to 282,520 persons in 91,869 households, and by 2015 the population is forecast to rise to 296,300 persons in 96,657 households. The median age is 37.1 years. 3. Lincoln Mall, is not a dying Mall, rather it has been impacted by ever changing retail patterns. Like so many other malls, it had become too large for todays consumer demand. The Mall has eliminated two department stores and is creating a power center along its newly designed internal roadway. Target will reportedly be the first major big box to relocate to the corner of Cicero Avenue and the Mall Road. Other smaller boxes will follow. The internal Mall Road connects Lincoln Highway at Kostner Avenue and extends along the south side of the Mall to Cicero Avenue. The following major regional shopping centers have lost department stores and have had to adjust or downsize: Yorktown Center, Hawthorn Center, Old Orchard Center, Stratford Square, The Plaza, Gurnee Mills, Oak Brook Center, Northbrook Court, Charlestown Mall, Randhurst Center, North Riverside Park, Lincolnwood Towne Center, Lakehurst Mall (closed), Fax Valley Mall, Orland Park Place, Stratford Square Mall, and Chicago Ridge Mall. Thus, 16 out of the top 20 malls have had to replace at least one department store. Some have been more successful that others. 4. The Automobile category produces the highest retail sales and sales tax revenues in Matteson. In 2005, Automobile category sales amounted to $285.7 million out of total retail sales of $804.7 million. In 2004, Automotive category sales were $276.2 million.
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Table 2.1
Households Change
1980 Census 1990 Census 2000 Census 2005 Projection 2010 Projection 2015 Projection
Table 2.1
Retail Market Feasibility Study, Lincoln Mall Area, Matteson, Illinois 5. Matteson current market penetration (market share) is 21.7 percent; much higher than the 12 to 15 percent that we normally find for a Chicago Area suburb with a major mall and concentration of big boxes. Mattesons market penetration by major retail categories is depicted in Table 2.2. Table 2.2 2006 Retail Sales and Market Penetration Matteson, Illinois 2006 Category Estimated Retail Sales Home Improvement $63,070,000 General Merchandise $198,496,000 Food Stores $44,749,000 Apparel & Accessories Stores $47,638,000 Furniture & Home Furnishings $11,516,000 Electronics & Appliances $35,708,000 Eating & Drinking Places $47,654,000 Miscellaneous Retail Stores $22,064,000 Drug Stores $29,830,000 Sporting Goods Stores $5,407,000 Book Stores $5,775,000 Total $511,907,000
Source: Melaniphy & Associates, Inc. 2006
Matteson's Market Penetration 21.30% 37.60% 9.80% 19.00% 7.00% 20.00% 12.40% 7.30% 18.00% 7.60% 17.60% 21.70%