DALLAS — The old formulas for picking the right place to open a store don’t work as neatly as they used to, which may explain why your neighborhood doesn’t have all the shopping options you think it deserves.
Retailers still look for certain income levels and other demographics before they open stores, but it’s not as simple as finding out how many people live within a 3- or 5-mile radius of a prospective site.
Drive times and population growth are bigger deals for retailers considering new stores, said experts on a panel this week.
“No one drives in circles. The old 5-mile radius doesn’t tell me from how far a store will pull customers,” said Kevin Sendrey, Dick’s Sporting Goods director of real estate. He was on the International Council of Shopping Centers Next Generation panel.
Developers and brokers “should think about cannibalization of our own stores and consider spacing” when proposing locations to retailers, he said.
Zach Shor, TopGolf USA Inc. real estate director, told an audience of mostly real estate brokers and developers to “think more in terms of 15- to 20-minute drive times.”
But even that will vary by market, Shor said. “You can get anywhere in Dallas in 15 minutes, but maybe not in Los Angeles or New York.”
Office Depot real estate manager Brady Barnett said there are also unnatural boundaries that need to be factored in, such as “a highway that people won’t go on the other side.”
Driving patterns for people leaving work and heading home are becoming more important, Kroger real estate manager Danielle Deyarmin said. “I mostly shop at a Kroger that’s on my way home, but it’s not the one closest to my house.”
To find ways to grow, mature chains such as Dick’s Sporting Goods and Office Depot are creating new concepts, such as smaller stores for smaller markets, retailers said.
Dick’s Sporting Goods, which already operates in 44 states, has two specialty chains that are just getting started, Sendrey said.
True Runner, open in Pittsburgh and St. Louis, requires spaces that are 4,000 to 5,000 square feet. Its Field & Stream outdoors stores are opening this year in Pennsylvania and Kentucky. Those stores require 50,000 square feet.
Sendrey, who previously worked for Brinker International finding locations for Chili’s restaurants, is heading back to some of the same towns in Louisiana and Oklahoma for Dick’s.
For those midsize markets, a trade area with 150,000 people can support a 35,000-square-foot store; it takes 300,000 people for a larger space in a market with multiple stores such as Dallas, he said. “I’m excited about our midmarket push.”