Contrary to what some people think, Crookston’s local retail market (LRM) borders do not end where the next community begins. Rather, according to the Crookston Market Area Profile (MAP) done by the University of Minnesota Extension Service, this market area covers much of Polk County, including Beltrami, Euclid, Erskine, Fertile, Fisher, McIntosh, Mentor and Fosston.
“Residents of these areas tend to come here regularly for many of their retail needs,” said Art Nash, regional Extension educator in the field of community economics, who presented the report to a small group of city and business leaders last week. “So these people must be included in any marketing efforts done by local businesses.”
Using data from multiple sources, including a private company that conducts numerous surveys and provides GIS software, the MAP provides a comprehensive description of those who shop and visit Crookston – their demographics, purchasing power, lifestyles, information sources and values – he explained. In conjunction with information gathered from the broader-based Retail Trade Analysis (RTA) of Crookston and Polk County, businesses and the community can plan for the future to better meet the needs of customers and tap into revenue-increasing opportunities.
Local retail market
LRM customer demographics data was taken from 2000 census figures and forecast for 2008 and 2013 by ESRI, the software provider. Some key figures from the 2008 forecast:
∙ The LRM consists of 16,206 people living in 6,362 households. Two-thirds of these are family households. Nearly one-third of all households have related children living in them and another third have persons age 65 or older. The average household size is 2.37.
∙ The median household income is $44,542, with the average income at $55,877.
∙ The median household net worth is approximately $62,000, although the average net worth is much higher, nearly $400,000.
“This is probably due to there being 7 percent of households with a net worth of more than a million,” said Nash. “Almost half, though, have a net worth of less than $50,000, with nearly a third under $15,000. So these figures may be a bit skewed.”
∙ The median age is just under 42, the largest age groups being 15-24 and 45-54.
∙ The median home value is just under $100,000. Housing unit categories are: 20 percent seasonal, 22 percent renter occupied, and 58 percent owner occupied. The vast majority – two-thirds – of housing units in the county are more than 40 years old, the median year build at 1956.
∙ The average number of vehicles per household is 1.8.
∙ Employment data: The service industry dominates, with more than half of some 8,100 employees age 16 and up working in this industry. When it comes to occupations, white collar is at the top with 54 percent compared to 22 percent in the service sector and 24 percent blue collar. The average travel time to work is 16.5 minutes.
Taking the customer profile further, the lifestyle profile classifies U.S. neighborhoods into 65 market segments grouped according to a detailed national profile, Nash explained. This helps to explain the lifestyle patterns of customer. The market potential summary takes both customer demographics and lifestyles into account and groups it into leisure, travel and media habits, which can be a helpful tool for marketing.
Retail gap analysis
The other component of the MAP is the retail gap analysis (RGA), which deals with supply and demand for retail goods and services and can be a good indicator of areas in which new businesses would thrive.
“The retail gap is calculated by subtracting the supply from demand,” Nash said. “We use the number of stores to derive this figure, so if the number is greater than one, it means the demand is higher than the supply. A negative number means the opposite.”
Limited-service eating places is at the top of Crookston's gap list, showing the demand for stores at 11.5 but a supply of only 5. In contrast, there appears to be a glut of full-service restaurants, with 26 existing but the demand only enough for 8.4.
“Again, these numbers should be considered along with other pieces of the whole puzzle,” said Nash. “Categories could be under or over reported due to different factors. It could also be a temporary shift due to the economy.”
General rental stores, of which there are none, also shows a big gap, but as Crookston Housing and Economic Development Authority Director Dan Johanneck noted, stores that only deal in rentals are rare.
“In order to make it in the rental business, stores need to have some sort of other retail niche going for them,” he said. “The Crookston area has several businesses that rent out all sorts of things, but that's not their primary source of income.”
Other areas the show a supply/demand deficit include: personal goods repair; nail salons; pet care (not veterinary services); amusement parks and arcades; gift, novelty and souvenir stores; cosmetics, beauty supplies and perfume; women's clothing; family clothing; shoes; hobby, toy and game stores; and sewing, needlework and yard goods stores.
Putting it all together
Bringing both the MAP and RTA together, said Nash, gives a “really good picture of the retail trade in Crookston.”
There appears to be quite a number of sales coming from outside the city, a recent surge, and containment of city dollars spent on food and general merchandise, he added.
“This is true,” said Lori Wagner, Crookston Area Chamber of Commerce executive director. “I got to Wal-Mart and I don't know ¾ of the people there. That's awesome – it means we're pulling them in from somewhere.
“I thing people are staying in town more and not going elsewhere to shop,” she went on. “Business at stores downtown is up 30 percent, and I think it’s because of the service. Crookston stores provide great service.”
Nash said more meetings will take place with the business community to come up with plans to improve Crookston's retail market and fill the needs of potential customers, using the RTA and MAP as guides.
