Retailers can tap $16M more by Gregory R. Norfleet · News · July 19, 2013
West Branch could use more housing and a general merchandise store, but most of all, retailers need to tap into more than $16 million in spending its residents take outside the city, a market researcher said last week.
Main Street Iowa’s Jim Thompson told downtown retailers on July 10 that West Branch residents spent about $21 million on retail products in 2010, but only spent about $5.9 million at local businesses, and spent more than $2.1 million on food and drink, but only spent $933,000 here.
“That’s opportunity lost?” Brick Arch winery co-owner John McNutt asked.
“Yes,” Thompson said.
He said the grocery and convenience stores are only capturing a fourth of the market.
Most of the retail, food and drink spending is going to the Iowa City/Coralville area, he said.
Further, Thompson said the numbers are actually worse than they appear, but how much worse is hard to say. The data only points to money spent in West Branch and residents’ spending power. What the data cannot tell is whether the person at, say, the McDonald’s drive-through, is from West Branch or someone off Interstate 80. That highway traffic, he said, masks the true spending by locals.
Still, there is opportunity there, he said.
“You get visitors to your town,” Thompson said. “You need to know how to convert them (to spend more money here).”
Looking at housing, the Main Street Iowa report shows that 29.1 percent of homes are “free and clear” and that the residents have paid off their mortgage. That means 70.9 percent of residents are paying on a mortgage. This is true even though the average resident is 38.4 years old.
That tells him there is a percentage of “generational homes” — homes passed from parents to children — but also residents “who lived a conservative life” and paid off homes quickly.
“This one blew me away,” he said. “You guys are young and yet you have a lot of wealth.”
Thompson said only 4.8 percent of West Branch homes are vacant.
“That is extremely low for Iowa,” he said, which averages 8.7 percent. The U.S. average is 11.4 percent. “You need more housing opportunities.”
“Is this limiting growth?” McNutt asked.
“Yes,” Thompson said, noting that while construction costs here are the same for Iowa City, property costs are lower.
Of the retail market, Thompson said the city cannot try to draw new businesses for every type of product not sold here.
“You need to pick one or two categories,” he said, but made a point to say that a “general merchandise” store — something like a small Wal-Mart or a Dollar General — might be a place to start.
Other West Branch statistics from the Main Street Iowa report, which was commissioned by Main Street West Branch: