Archive for Sunday, January 22, 2006

Leaking retail

It will be next to impossible to keep Lawrence retail dollars from leaking into Topeka and Kansas City.

January 22, 2006


Although Lawrence city commissioners seem surprised by the figures in a new retail study, the concept of "retail leakage" is nothing new to Lawrence.

The study reviewed by city commissioners this week compared retail sales in Lawrence with sales in 13 other Midwest cities. Although some of the other cities were significantly larger than Lawrence, they were similar to Lawrence in that they were university towns that also were the dominant population centers in their counties.

Lawrence ranked last, by a significant margin, in terms of retail sales when compared to its estimated buying income. According to the study, only 59 percent of residents' buying income remains in Lawrence. That compares, for instance, with a figure of 130 percent in Columbia, Mo., meaning Columbia is drawing significant retail income from other areas.

Columbia's situation, however, is much different than Lawrence's. Major shopping opportunities lie only 30 to 40 miles east or west of Lawrence in Topeka and the Kansas City area. By contrast, Columbia is smack in the middle of Missouri, about 125 miles away from major shopping centers in Kansas City and St. Louis. Jefferson City, the state capital, is only about 30 miles away, but it's half the size of Columbia. Of course, Columbia is going to serve a wider retail market.

Because it serves a wider area, Columbia also can offer more retail variety than Lawrence can. Many Lawrence residents go to Kansas City or Topeka to buy certain items because they want a greater selection and the lower prices that high-volume stores can offer. Because they aren't supporting local stores, those stores become even less able to offer a broader selection of products, so the cycle deepens and the local stores begin to decline.

Retail leakage isn't new, but the study points out factors that city officials may consider when pondering approval of new retail developments. According to the study, the city's low retail vacancy rate indicates that it could support more retail development. Interestingly, the highest vacancy rate was in the downtown area, Lawrence's retail gem.

The author of the study said the higher downtown vacancy rate might reflect the fact that because residential areas are growing on the city's edges, residents no longer think about shopping downtown. Another factor, however, that has been cited by many businesses leaving downtown is the high cost of rents in downtown buildings. Some observers fear that additional retail space will hurt downtown, but the competition it provides might actually help bring downtown rents down to a more reasonable level, thereby lowering the turnover and vacancy rates in the area.

Because there is so little space available there, downtown seems destined to become more and more an area of small specialty shops while larger retailers will go to the edges of town where they have easier access and ample parking.

It seems that the challenge for Lawrence is how to expand its retail offerings without driving existing businesses under. At least part of the answer would seem to be figuring out how to broaden the types of retail businesses available in the city rather than just creating more room for the same kind of businesses that already exist here.

It's obvious that there are far more retail options in Lawrence now than there were a decade ago and, therefore, less necessity for out-of-town shopping trips. But geography still is a huge factor for Lawrence retailers and new four-lane highways make it easier than ever to go east or west to shop. Convincing Lawrence residents there's no reason to drive to Topeka or Kansas City in search of a better price or a different product will be a tall order.


classclown 12 years, 3 months ago

Demographics play a role as well. Since Lawrence is a "college town" the area's retailers view them as the major purchasing power here and stock their wares accordingly.

While those that live here who aren't young college students can find some items to suit their tastes, the choices are limited. This necessitates going somewhere else for a wider selection to meet their needs.

lunacydetector 12 years, 3 months ago

i thought some well connected urban planning professor did a study that said lawrence had more retail per capita than any other city in the united states?

i guess he was wrong, big time. perhaps he deserves us a retraction.

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