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The Retail Sector in Phoenix: Assessment and Alternative Recommendations

The study compared sales by ten major retail store categories in Phoenix with total expenditures of the Village's residents in these same types of stores. It also included brief interviews with retailers and an overall examination of issues affecting local retail.

Total retail sales in Phoenix are only half of consumer expenditures by its residents. In other words, residents are spending a large proportion of their retail expenditures outside Phoenix. Meanwhile, shoppers from other municipalities are not spending enough dollars in Phoenix to counter this outflow of local income. Efforts need to be made to increase local shopping by residents and to attract more shoppers from outside the Village. For this, residents need to be consulted about the reasons why they do not shop in Phoenix and what it would take for them to obtain their retail goods locally. Similarly, there is the need to determine what would bring outside consumers to shop in Phoenix.

Recent changes in the retail industry have centralized many stores in large shopping malls. Retail strips and local stores are having a hard time competing with them. At the same time, however, local shopping is still preferred by many consumers. Shopping for convenience goods is still largely a local business. Similarly, certain forms of retail require larger spaces than they can afford in shopping malls or do not fit well there. Most retailing in Phoenix consists of convenience goods stores and services. But even in these categories, consumption flows out of the municipality. Phoenix needs to develop strategies to capture more retail dollars, particularly in those categories in which retail is still largely a local business.

General and specific improvements in retailing may achieve this. The Village lacks the type of retail concentration that allows retailers to coordinate activities and share some costs, the municipality to concentrate services, and consumers to save on shopping trips while enjoying the experience. Retail may be one of the elements of a concentration serving as the town's core. Alternatively, strategically located mini-malls may provide the type of setting attractive to retailers and consumers. The ability of the town to attract developers to build new housing in Phoenix may be used to get them or other developers to build these mini-malls.

Any final strategy, the authors of this report believe, should be tied to promotion of local entrepreneurship and self-employment by resident minorities which constitute the vast majority of the population.

Meanwhile, Phoenix has managed to attract outside shoppers in the categories of home improvement and auto after care. The Village should consider building on these assets. Efforts to strengthen this type of retailing are warranted. Consultations with these retailers may help identify feasible strategies. For instance, the Village may consider development of a retail park for home improvement retailing requiring large, low-cost space. Such improvements may at the same time have multiplier effects on local retail, as shoppers for home improvement or auto after care items and services may also consume other goods in their shopping trips to the municipality.

The survey of retailers indicated that retailers in general do not have future plans. Even though a few of them expressed interest in buying new equipment or getting loans, overall, they seem to be assuming a "wait-and-see" attitude. Efforts by the municipality or other groups to bring them together in a strategizing initiative for the town may get them excited and motivate them to develop and implement plans for their businesses. Meanwhile, the municipality needs to revisit matters of security, image, infrastructure, services to retailers, and other issues discussed in the report. The Village of Phoenix may want to consider addressing these matters in coordination with neighboring communities.

Finally, Phoenix's size and its proximity to the communities of Harvey and Dixmoor, with which it has much in common, suggest that these three communities could benefit from developing a common retail strategy in one or more areas. For instance, attraction of a supermarket, department, footwear, and/or apparel store to the area would capture local dollars which now flow out of the communities, as well as have the possibility of attracting shoppers from other communities. Also, the communities may want to consolidate, improve, or develop a retail park in one or more areas of current retail strength, for example, auto after care and/or home improvement. Any such strategy should be developed with the concerns of all three communities taken into consideration so that each realizes concrete benefits from cooperation.

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