Retail Market Analysis

Physical Boundaries

Downtown Albany is located in the heart of Albany along the Willamette River. U.S. Highway 20 runs through Downtown in a pair of one-way streets (Lyon and Ellsworth). The primary and secondary commercial areas of Downtown Albany are identified below.

Character

Albany’s growth and history can be traced in its architecture. Most of Downtown Albany is included in the Albany Downtown Commercial National Register Historic District. Albany is credited by historians and architects with having the most varied collection of historic buildings in Oregon. This collection includes styles from the 1840s through the late 1920s and is concentrated within an area of approximately one hundred square blocks in three National Register historic districts.

(Maybe something arty here with the vintage furniture sign)

Parking

Downtown Albany offers 740 public parking spaces within the Downtown core; 302 off-street free public parking spaces and 438 on-street free parking spaces. Several businesses provide off-street parking spaces for customers and employees. For more information, click on ParkWise page on Home Page

Downtown Albany Business Conditions

Downtown Albany is an energetic and evolving community filled with small retailers, eateries, residents and professional offices. Longtime businesses and new ones alike have made a commitment to create a unique blend of tradition and trend in an urban environment.

Many of Albany’s downtown businesses have been in business Downtown for over 5 years, with several over 20 years. Business has been steady despite the economic downturn experienced in Oregon. Merchants that noted a drop in sales blame the overall economy and competition from other stores, including big retailers outside Downtown.

On a 2003 business survey, business owners indicated that at least 70 percent of their business is from repeat customers that mostly come from Albany and Corvallis.

Quotes from Downtown Business Owners

“I moved my business to Downtown Albany and find that customers tend to spend more than the other small town I was located in.” Jeri Caudle, owner, Aromatique.

“I’m confident that downtown will improve ten-fold over the next few years. We’ve just begun.” Brad Jordan, owner, Jordan Jewelers.

“With all the pots that are boiling in CARA (Albany’s urban renewal plan), it just stands to reason that progress will be made in a positive direction for Downtown.” Gordon Kirbey, owner, Boccherini’s Coffee & Tea House.

Albany Downtown Association

The Albany Downtown Association (ADA) is a private non-profit organization dedicated to the revitalization of Albany’s downtown. The ADA efforts promote Downtown Albany as the heart of the community, strengthen the economic vitality by encouraging business diversity and enhance the unique physical characteristics of a National Register historic district. A cooperative advertising program, seasonal events, promotions and a parking district are all operated by the Albany Downtown Association to reinforce revitalization efforts.

Some of the events and projects the ADA sponsors throughout the year include: summer flower baskets, lighted snowflakes for the December holidays, Saturday Farmers Market, Crazy Days sidewalk sale, Moon Music street dance, Antiques and Art in the Streets, Women’s Wit and Wisdom Week, All-Hallows Eve, and the Linn County Veterans Day Celebration.

Rick Rogers is the current director of the Albany Downtown Association located in Two Rivers Market, 250 Broadalbin Street, 928-2469.
Central Albany Revitalization Area (Urban Renewal District)

Central Albany Revitalization Area (CARA)

In late 2001, the City adopted an urban renewal plan for the Central Albany area, called the Central Albany Revitalization Area (CARA) Plan. CARA’s purpose is to implement the Town Center Plan developed in 1995 through a citizen-driven process. This effort is currently focused on projects that will serve as catalysts for the revitalization of Albany’s downtown core by providing an environment attractive to reinvestment, reconnecting the Downtown to the Willamette River, and encouraging pedestrian movement within the Downtown.

Key objectives of CARA are to:

• Attract new private investment, and
• Retain and enhance the value of existing investment in the area.

Additional objectives of the urban renewal plan are to:

• Provide a safe and convenient transportation network that encourages pedestrian and bicycle access to and within the town center;
• Preserve the historic districts, historic resources and existing housing in the area;
• Create a readily identifiable core that is unique and vibrant with a mixture of entertainment, housing, specialty shops, offices and other commercial uses;
• Increase residential density in the area;
• Encourage the development of new forms of housing and home; and
• Provide an enriching environment and livable neighborhoods.

For more information on the CARA plan and projects, please contact Pam Silbernagel, Albany Community Development Planner, 917-7565, or visit the city’s website at www.cityofalbany.net

Projects In Works

• Upper floor redevelopment pilot project - The CARA Agency helped fund an upper floor transformation to restore residential units above a downtown business.
• Albany Carousel - Join hundreds of Albany area volunteers in this exciting journey to restore and outfit a 1908 Denzel Carousel, to be located in Downtown Albany.
• Downtown Streetscape Plan - Includes pedestrian street lights, benches and trash cans (CARA funding).
• Gateways to Downtown – A gateway feature is planned for the entrances from the north (1st and Ellsworth) and south (Lyon and 4th) into Downtown (CARA funding).
• New Building at 4th and Lyon – the Willamette Community Bank has begun construction of a new building that will help to create an attractive gateway into the heart of Downtown from the south and the highways.
• Multi-Modal Center - Albany’s historic train depot is becoming a multi-modal center with a multi-million dollar federal grant.

Spring 2004 Construction of the new Willamette Community Bank Building

Current Business Mix

Albany’s Downtown offers a diverse mix of about 200 businesses and offices in the primary retail core of downtown. (See the Downtown Database and the First Floor Uses Summary for a list of all businesses and more detailed information by use types in Appendix A.) Downtown also serves as the financial, law, banking, and government center for Albany. The current occupancy rate is %. The following businesses currently represented in the primary retail core of downtown (map on page 4):

• ENTERTAINMENT: live theaters, museums, billiard hall (7.8%)
• DINING: deli/cafes; local restaurants including Northwest cuisine and beers, drinks/bars, coffee, chocolates, ice cream, bakery, pizza parlors, and caterers with cooking classes (10.7%)
• RETAIL: antiques, furniture, jewelry, clothing (women’s boutique, resale, children’s, men’s) gift/cards/specialty, art & framing galleries, books, kitchen supplies, natural body care, nutrition/health food, sporting goods – bicycles, fly fishing, thrift, crafts/hobbies, photography supplies & film development, paint/home repair (36.1%)
• PERSONAL SERVICES: post office, shoe repair, computer repair, alterations, dry cleaners, gym, salon/barbers, massage therapy, florist (7.7%)
• PROFESSIONAL SERVICES: financial, lending, legal, insurance, counseling, real estate, printing, architecture/design, engineering, advertising, newspaper, chamber of commerce (23%)
• CIVIC: Carnegie library, senior center, government offices (local, county and state), churches, non-profit organizations, visitors’ center (14%)

The map below shows the first floor use types and parking lots.

Current Market Demand

The market analysis was conducted to determine what types of businesses could successfully locate in Downtown Albany and that may enhance the energy and character of Downtown. The types of businesses analyzed included those recommended by the consumers and merchants in response to a summer 2003 survey.

Methodology

A demand analysis was completed by using 1999 income data from the Census, and retail trade and consumer expenditure information from the Dollars and Cents of Shopping Centers 2000, and Consumer Expenditure Surveys in 1991 and 2001. Currently Downtown serves the entire Albany area. Market demand was calculated for three market areas – Albany, the Albany region¹ (a portion of the Linn-Benton area surrounding and including Albany), and a primary market area of census tracts adjacent to Downtown. Figure A shows the method that was used:

Figure A:		METHODOLOGY
1.	Spending Patterns	x	Household Income	x	Number of Households	=	MARKET DEMAND
2.	Market Demand	÷	Sales per Business	=	Number of Supportable Units
3.	Number of Supportable Units	—	Number of Existing Businesses	=	Number of Potential New Businesses

Market demand is figured by multiplying the average household incomes in the trade area by the number of households and then by their spending patterns (from the 2001 Consumer Expenditure Survey). Spending patterns reflect the percentage an income group spends on the various retail categories and services. Households were broken out by income ranges and spending patterns were calculated for each income range based on the average annual expenditures for each income group. (See Consumer Expenditure Calculations and Albany Household Spending in Appendix B.)

Once the potential expenditures for the market area are calculated, the next step involves calculating the number of stores these expenditures can support. First, however, we must calculate the average sales per store for each retail category. The second equation depicts how the average sales are calculated. Average gross sales per store is the sales volume that the average store needs to stay in business for one year. Table x presents this information for each retail category selected for the market analysis in the Average Gross Sales column. For example, a women’s shoe store has an average gross leasable area of 1,426 square feet and a median sales per square foot of $135.86. Thus the average gross sales per unit is equal to:

1,426 x $135.86 = $193,736.

Next market demand is divided by the average gross sales per store to get the number of stores the market can support. Once the number of supportable units is developed, it is compared to the existing number and types of businesses and square feet in the market area. Data was collected for businesses within the city limits of Albany (as shown in the table in Appendix C). The development potential is calculated by subtracting the number of existing units from the number of supportable units as shown in the third equation. Tables 1, 2 and 3 show the development potential for the different Albany market areas. (More detailed demand tables are located in Appendix B.)

Findings: Unmet Market Demand

The analysis, using 2000 data, shows that there is unmet demand in the different Albany markets for a variety of retail goods, services and entertainment.

• Movie Theaters: Albany can support several independent theaters or one large national theater.
• Restaurants: There is still room in this category for a few additional restaurants
• Music Stores: There is extreme unmet demand for music.
• Clothes: Many Albany shoppers leave Albany for clothes and shoes. There is demand for clothing all ages, and especially for women.
• Shoes: There is demand for at least 5,000 sf of women and 5,000 sf men’s shoe sales.
• Home Decorating/Accessories: There is room in the market for
• Grocery Store: There is unmet demand in the primary market area for one grocer.
• Pet Supplies Store: Albany does not offer a store devoted to pet supplies. There is a small pet store.

Downtown Albany’s central location easily accessed by highways within the Albany region (and Corvallis) makes it an excellent location for growth in the retail and entertainment industries to serve Albany, Linn and Benton Counties.

Albany and Albany Region Demand, 2000

The demand analysis shows that there is current unmet demand in the different Albany markets for a variety of retail goods, services and entertainment. Tables 1 and 2 show the demand for certain retail categories by the Albany region and Albany market areas². The Albany region could support a large movie theater twice the size of Albany’s only cinema complex or several smaller independent theaters. There is also demand at the city and regional level for more dine-in restaurants that may serve alcoholic beverages (pizza parlors, fast food, ice cream parlors, etc. are a separate category). Downtown could easily accommodate additional night-life activities.

Albany markets can support additional apparel-related businesses. Albany is currently home to Mervyn’s, Sears, Target, Ross Dress for Less, and smaller clothing stores at the mall and around the city. The figures in Tables 1 and 2 show there is demand for clothing and shoes for all ages, especially for women. This may explain why many survey respondents noted that they shop for clothes and shoes outside of Albany.

Table 3 highlights demand at the primary market level. (More detailed tables are available showing how these figures were calculated and demand for other retail categories not listed below; contact the City of Albany Planning Division.)

Retail Category	Projected Expenditures	Estimate of Supportable SF	Existing SF Albany	Ave. Industry Size, SF	Potential New Units
Movie Theaters	$3,054,229		25,000
Independent		84,840		10,654	5.6
National		51,513		23,298	1.1
Video Rental	$3,054,229		17,174
Independent		34,472		2,807	6.2
National		31,971		5,989	2.5
Restaurants	$26,877,216	143,139	85,676	3,725	15.4
Women's Clothes	$17,103,683	122,519	49,537-1	4,000	18.2
Men's Clothes	$10,995,225	44,336	24,700-2	3,116	6.3
Children's Clothes	$8,551,841	41,684	24,375-3	2,584	6.7
Family Shoes	$2,443,383	17,197	16,500-4	2,700	0.3
Women's Shoes	$3,665,075	13,830	0	2,529	5.5
Men's & Boys' Shoes	$2,443,383	11,580	0	1,450	8.0
Music Store (CD’s, tapes…)	$5,497,612	33,463	4,100	1,820	16.1
Bookstores	$2,443,383	19,518	16,867	2,400	1.1
Pet Shop & Supplies	$2,443,383	21,011	2,000	3,500	5.4
Home Accessories	$8,551,841	45,717	20,900-5	2,299	10.8
12,000 sq.ft. of Mervyn's; 8,000 sq.ft. of Sears and 5,000 sq.ft. of Target was added to the women's clothing sq.ft. 8,000 sq.ft. of Mervyn's; 6,000 sq.ft. of Sears and 4,000 sq.ft. of Target was added to the men's clothing sq.ft. 12,000 sq.ft. of Mervyn's; 6,000 sq.ft. of Sears and 4,000 sq.ft. of Target was added to the children's clothing sq.ft. 5,000 sq.ft. of Mervyn's; 3,000 sq.ft. of Sears and 3,000 sq.ft. of Target was added to the family shoe sq.ft. 8,000 sq.ft. of Mervyn's; 7,000 sq.ft. of Sears and 5,000 sq.ft. of Target was added to the home accessories sq.ft.

Table 1. Albany Region Market Potential, 2000

Retail Category	Projected Expenditures	Estimate of Supportable SF	Existing SF Albany	Ave. Industry Size, SF	Potential New Units
Movie Theaters	$2,057,935		25,000
Independent		57,165		10,654	3.0
National		34,710		23,298	0.4
Video Rental	$2,057,935		17,174
Independent		21,542		2,807	2.2
National		23,227		5,989	0.7
Restaurants	$18,109,829	97,365	85,676	3,075	3.8
Women's Clothes	$11,524,437	82,553	49,537-1	4,000	8.2
Men's Clothes	$7,408,566	29,917	24,700-2	3,116	1.7
Children's Clothes	$5,762,218	28,086	24,375-3	2,584	1.4
Family Shoes	$1,646,348	11,587	16,500-4	2,700	-1.8
Women's Shoes	$2,469,522	9,319	0	2,529	5.5
Men's & Boys' Shoes	$1,646,348	7,803	0	1,450	8.0
Music Store (CD’s, tapes…)	$3,704,283	22,547	4,100	1,820	10.1
Bookstores	$2,057,935	13,151	16,867	2,400	-1.5
Pet Shop & Supplies	$1,646,348	14,157	2,000	3,500	3.5
Home Accessories	$5,762,218	30,804	20,900-5	2,299	4.3
12,000 sq.ft. of Mervyn's; 8,000 sq.ft. of Sears and 5,000 sq.ft. of Target was added to the women's clothing sq.ft. 8,000 sq.ft. of Mervyn's; 6,000 sq.ft. of Sears and 4,000 sq.ft. of Target was added to the men's clothing sq.ft. 12,000 sq.ft. of Mervyn's; 6,000 sq.ft. of Sears and 4,000 sq.ft. of Target was added to the children's clothing sq.ft. 5,000 sq.ft. of Mervyn's; 3,000 sq.ft. of Sears and 3,000 sq.ft. of Target was added to the family shoe sq.ft. 8,000 sq.ft. of Mervyn's; 7,000 sq.ft. of Sears and 5,000 sq.ft. of Target was added to the home accessories sq.ft.

Table 2. Albany Area Market Potential, 2000

Primary Market Demand, 2000

Downtown Albany’s primary market population has the highest incomes and the most education of all Albany market areas. Table 3 highlights demand at the primary market level. (More detailed tables are available showing how these figures were calculated and demand for other retail categories not listed below; contact the City of Albany Planning Division.)

Within the primary market there is unmet demand in several “convenience goods” categories, such as groceries, a pharmacy and video rental store. Downtown Albany is centrally located within the primary market area, which is where most of these types of businesses prefer to locate.

As illustrated below, the primary market can support additional clothing and shoe stores.

Because Downtown is currently home to several restaurants and bars, the primary market alone would not support additional restaurants.

Retail Category	Projected Expenditures	Estimate of Supportable SF	Existing SF Albany	Ave. Industry Size, SF	Potential New Units
Grocery Store, National	$22,349,267	62,291	0	50,000	1.3
Pharmacy, drugs only	$2,828,657	8,829	0	1,200	3.8
Drug Store	$4,158,003	12,843	0	13,250	1.4
Hardware, Independent	$1,039,501	8,723	17,000	6,000	-1.4
Movie Theater, Independent	$649,688	18,047	0	10,654	1.7
Video Rental	$649,688	6,801	0	5,989	1.1
Restaurants	$5,717,254	30,738	49,760	3,075	-6.2
Music Store (CD’s, tapes…)	$1,169,438	7,119	4,100	1,820	3.9
Women's Clothes	$3,638,253	25,988	3,252	4,000	5.7
Men's Clothes	$2,338,877	9,445	6,700	3,116	0.9
Family Shoes	$519,750	3,658	0	2,700	1.4
Women's Shoes	$779,626	2,942	0	2,529	1.2

Table 3. Primary Market Potential, 2000

2005 Projected Demand

Demand was projected for all three market areas to 2005. These tables are in Appendix B.

Market Leakage

The figures in the tables above show that there is more demand within the Albany area market than there are existing businesses. Almost half of the shoppers surveyed (59 of 152) indicated they go to other cities for clothing, housewares, restaurants and other entertainment. Salem was the most popular clothing destination and Corvallis the most popular dining destination. This leakage of buying capacity indicates there is unmet demand.

A way to confirm market leakage is to match the actual sales dollars with the average expenditures by the defined market areas. Due to no sales tax in Oregon, this type of analysis is challenging. The Census of Retail Trade is done every 5 years, but the 2002 retail trade data will not be available until 2004. The 1997 Census of Retail Trade shows that sales in most of the above categories were less than the amount spent by consumers. A more detailed look at sales by retail category is provided below.

Retail Demand Scenarios

Clothes and Shoes. There is significant potential for clothing stores of all types. The analysis shows that the Primary, Albany and Albany Region markets can easily support several additional clothing stores for men, women and children. Albany also has little to offer in footwear and can support several new shoe stores.

The following comparison is of 2000 demand and 1997 sales receipts as reported in the Census of Retail Trade. For ease of analysis, it is assumed that dollars were constant over this period.

2000 Demand Albany Region (excludes Corvallis and most of Benton County)

1997 Receipts at Clothing Stores (NAICS Code 4481, includes shoes)*

*  1997 Receipts for Department Stores (NAICS Codes 4521101 and 4521103) and General Merchandise Stores (NAICS Code 45299) are not available. Sales aren’t reported when there are a small number of businesses in order to protect confidentiality. Albany had one conventional department store and three general merchandise stores in 1997, according to the 1997 Economic Census.

Comparing the 1997 dollars spent on apparel in Linn and Benton Counties to the 2000 projected expenditures by the Albany Region market, it is easy to see that Albany area residents are currently driving out of Albany to buy clothing, shoes and other apparel accessories.

Suggestions: Smaller clothes and shoe stores are easier to locate in Downtown Albany because there is more variety of smaller retail spaces (under 5,000 square feet) and public parking is concentrated west of Ellsworth where most small retail opportunity spaces are located.

National chain clothing stores often require specific locations and parking needs, which may limit the number of possibilities downtown. The Murphy Motor Company building on the northeast corner of Ellsworth and 2nd Avenue could accommodate a large individual retailer or a small department store (18,000 square feet on two floors, plus 4,000 additional “annex” space). This property is currently occupied by At Home Furniture, which has a newer location outside of Downtown.

Restaurants. Downtown Albany currently offers the most variety of restaurants in a concentrated location, in an exciting and pedestrian-oriented setting. There are several restaurants located along 14th Avenue near the mall and the movie theater (all but one are national chains). Other Albany restaurants are scattered throughout the city.

While Albany offers a variety of restaurants throughout the City, the shopper survey revealed that many Albany residents drive to Corvallis to dine. The demand analysis concludes that the Albany area can support around 12,000 square feet of additional dine-in restaurants (with or without alcohol). A few shopper survey respondents noted they would like an upscale bar in Downtown.

For a copy of a complete Retail Market Analysis, contact us

¹  The Albany region includes the cities of Albany, Millersburg, Tangent, Lebanon, Brownsville, Sodaville, Halsey and portions of Linn County, and one census tract in Benton County (that includes North Albany).

2  The Albany area includes the City of Albany, and the census tracts in Albany’s Urban Growth Boundary.

3  NAICS stands for the North American Industry Classification System (formerly SIC, Standard Industrial Classifications).

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