The Lawrence area's bowl of retail sales is leaking, and the money that's leaving town is increasingly flowing into mega shopping areas in Wyandotte County, an economist says.
A new report from David Darling, a retired Kansas State University economics professor, indicates that Douglas County is losing ground to other communities that are competing for shoppers' spending.
Most notable in soaking up Lawrence's departing shoppers, Darling said, is the relatively new area in Kansas City, Kan., that is home to Kansas Speedway, the Legends shopping area and Village West.
The area's Nebraska Furniture Mart, Cabela's, Great Wolf Lodge and a long line of restaurants, national retailers and other destinations are continuing to build momentum that could make matters even worse for the Lawrence area, Darling said.
"Wyandotte County is the new player, and whenever there is a new player there is the novelty factor, and there is an initial rush," said Darling, who has been studying the relative retail strength of Kansas communities for years. "If there is appeal, and people are pleased with it, there will be repeat business - and that's when the bloodletting starts."
Specifically, Darling said, county-by-county data detailing sales-tax collections indicates that Wyandotte County - once considered the "weak link" in the region's retail marketplace - "is showing more strength now than ever before, and that strength is markedly improved."
Using sales-tax reports from the Kansas Department of Revenue, he computed a "retail trade pull factor" for each county.
A factor of 1.00 indicates a county has a perfect balance of trade. Anything less means a county is losing more spending than it's bringing in; anything above shows that a county is attracting more spending than it is losing.
Douglas County's pull factor, for the state's 2007 fiscal year, was 0.87, down from 0.97 a year earlier and 0.99 before that.
The shrinkage of activity is enough to cost Douglas County retailers as much as $44.3 million in taxable retail sales each year, Darling said.
"It's a big pie, but it's shrinking," he said.
Wyandotte County, meanwhile, recorded a 0.90 last year, up by 0.002 from a year earlier and up from 0.84 in 2005.
Chris Burger, president of Downtown Lawrence Inc., understands how a case can be made that Wyandotte County is sucking away shoppers from Douglas County. But he's not convinced that it's a permanent loss.
Downtown Lawrence has been around more than 150 years, he said, and building momentum as a commercial center since the reconstruction following Quantrill's Raid in 1863.
The Legends? While it boasts a $248 million price tag and 1.1 million square feet of retail and entertainment space, it's been open for fewer than two years. Some retailers near the Kansas Speedway, however, have been attracting shoppers for longer. Cabela's, for example, opened in 2002, and Nebraska Furniture Mart opened the following year.
"Wyandotte County is doing a great job in attracting a lot of businesses, and continues to add to it, so the intrigue factor will probably be here for quite awhile," said Burger, an attorney for Stevens & Brand. "But, eventually, their buildings will grow tired, and then they'll have to rebuild it all.
"I would suppose that people are not so attracted to the individual shops as they are to the concept of the location. What comes to mind are outlet malls. People always thought: 'What a neat idea. Let's go see what there is.' And once they became accustomed to what was present, it wasn't very good - in selection, and environment, in time, distance, expense - especially when everything they need is right in front of them."
Losing retail sales to other communities can do more than squeeze the bottom lines for stores. The leakage also means a reduction in sales taxes that cities and counties charge, a major source of revenue for government services including police and fire protection, street maintenance and parks and recreation operations.
Darling said that smaller communities, such as Eudora, could be especially susceptible to retail shopping leaving the county for destinations in Wyandotte County. He would advise businesses in Eudora to focus on convenience products and services - fast food, fuel stations, hair care centers, medical services and the like - without trying to take on the retail magnet that already is increasing its pull to the north and east.
"Anybody who opens a furniture store in Eudora would be in deep trouble very, very quickly," Darling said, alluding to the market dominance of Nebraska Furniture Mart.
Shawnee County, meanwhile, also is seeing its relative retail strength decline, Darling said, but likely for different reasons.
Shawnee County, with a regional mall and other major shopping draws on Wanamaker Road in Topeka, checked in with a pull factor of 1.14 last year, unchanged from a year earlier but down from 1.16 in 2005 and 1.18 in 2004.
The reason could be Manhattan's growth, including opening of a new Best Buy store, in drawing more shoppers who live between the home of Kansas State University and the state's capital city.