The Market for Commercial Development in Lansdowne

Retail Potential

Within every geographic area there is a limited number of dollars that can be spent annually on retail goods and services. The number of households within the geographic area and the incomes of those households determine this amount of money, which is usually somewhere between 35% and 40% of household income, depending upon the income levels. Households with higher incomes, obviously, have more discretionary dollars available than those whose earnings must be spent primarily on such items as rent, groceries, or insurance.

Every two years, the Bureau of the Census conducts the Consumer Expenditure Survey, which asks 40,000 households of varying incomes nationwide where their retail dollars are actually spent. By multiplying the number of households in the market area by the amount that households with similar incomes in the same region spend for various types of goods, the retail potential (the amount available for retail purchases) of a geographic area can be established.

Data on retail establishments and sales within the primary market area of Lansdowne was purchased from Claritas, Inc. Their Business Facts database, which is created from an annual survey of ten million businesses nationwide conducted by InfoUSA, gives the total number of retail establishments, by type, and the annual sales in those establishments, within a market area. By comparing the estimated sales within the market area to the retail potential of residents of that area, we were able to identify those categories of goods and services that are purchased primarily at locations outside of the boroughs.

Appendix A summarizes the estimated household expenditures of residents of the primary and secondary market areas. Predictably, the two categories that accounted for the most estimated expenditures in both the primary and secondary market area, as well as within a three-mile radius, are food at home and food away from home. Other major categories of expenditures included TV, radio, and sound equipment, and women’s apparel. The total potential for all retail goods and service categories in the Borough of Lansdowne, according to Claritas, is $136,729,786.

Appendix B lists the retail establishments in Lansdowne by Standard Industrial Classification (SIC) code, as compiled by Claritas, Inc. At the time that Claritas collected this data, there were 11 food stores, seven of them grocery stores. However, a business inventory conducted by the Corporation in the summer of 2002 identified eight food stores, including delicatessens and two Wawa’s. The Mar-Win Shop n’ Bag has recently doubled in size, and there is a small Acme in Upper Darby on Union Street across from Lansdowne. A Super Fresh on Baltimore Pike in Upper Darby between Lansdowne and East Lansdowne closed within the past few years. Finally, Giant Food is rumored to have bought a site on the south side of Baltimore Pike east of the former Super Fresh site, although this information could not be confirmed.

The second largest category of retail sales is miscellaneous retail, and the most important of these is drug stores. Presumably, a large proportion of these sales take place at the Rite-Aid and the CVS on Baltimore Avenue. Eating and drinking places account for an estimated $10 million in sales; these stores include some fast food and take-out, as well as a café and a diner.

By comparing the retail potential of Lansdowne households with the estimated number of dollars that are actually expended in the Borough, we came to the following conclusions:

Claritas counted 11 food stores in the Borough; the LEDC counted eight, including the Mar-Win, two Wawa’s, and several delicatessens and corner stores. By Claritas’ estimates, 43% of the retail sales in the Borough, or $25.8 million, were for food at home. If these figures are to be believed, the Borough is capturing all potential sales for food at home of Lansdowne residents, and some dollars from residents of neighboring communities. However, because these numbers are slightly higher than expected, it is possible that they include the Acme on the Upper Darby side of Union Avenue.
Lansdowne households spend $3.5 million per year on alcoholic beverages at home, and $3.7 million for alcoholic beverages away from home. In addition, they spend $20 million on food away from home, but only $10 million is spent at eating and drinking places in the Borough. There is, therefore, an outflow of over $7 million in alcoholic beverages, and an outflow of about $10 million in food away from home.
In addition to the money that is available for alcoholic beverages and restaurant meals among residents of the Borough, residents of the secondary market area have another $30 million available for the purchase of alcoholic beverages away from home, and $171 million available for restaurant meals.
Lansdowne has one woman’s clothing store and three miscellaneous apparel and accessory stores, which together have about $1,000,000 in sales. Lansdowne households spend over $18 million on apparel and miscellaneous accessories and services, meaning that there is an outflow of about $17,000,000 in apparel and accessories.
Of the $9 million estimated sales of home furniture/furnishings in Lansdowne, more than half takes place in radio, TV, computer, and music stores. Lansdowne households spend just under 8 million on TV, radio, sound equipment and computer hardware. There does not seem to be a significant outflow in those categories. In addition, Lansdowne furniture stores have estimated sales of over $3 million, which is about what their retail potential is in this category. They have the potential to become destination stores. There are, however, no household appliance stores and only one store that sells floor coverings in Lansdowne, meaning that households are probably fulfilling those needs elsewhere.
Drug stores account for almost 10% of retail sales ($5.6 million) that occur in Lansdowne. It is estimated that Lansdowne households spend just under $5million on prescription and over the counter medicine and drugs; therefore there is not a significant outflow of retail dollars for medicines.
There are several types of miscellaneous retail establishments (Standard Industrial Classification 59) that are not represented well in Lansdowne, but for which Lansdowne residents have considerable spending potential. They are:
- Book Stores: there is one recently opened bookstore in Lansdowne, and another store that sells books and other miscellaneous items. Lansdowne residents spend over $2.7 million yearly on reading materials, including magazine subscriptions. Although there is no sales data on these two stores, it is likely that money for reading materials still leaves the Borough, and that there is some potential within the community for a small independent, specialty book store.
- There are also no sporting goods, bicycle, camera, card or gift shops, or photographic supply stores in the Borough. There are three hobby, toy and game shops. At the same time, estimated expenditures by Lansdowne households for sports and recreation of all sorts (including theatre and sporting events as well as equipment purchases), are over $6 million. Although it is impossible to pinpoint the amount of money that could be spent in the Borough for these types of purchases by category, it is quite clear that there is an outflow of dollars spent on them.

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