Area economic development leaders are reaching for retail

Published 12:00 am Monday, November 14, 2005

Jean wants a Target. Frank wants Circuit City. Bennie thinks a Home Depot would be great.

As Natchez shoppers pine for some of the so-called &8220;big-box&8221; stores that make shopping in Jackson, Baton Rouge or Monroe attractive, they may wonder, &8220;why not here?&8221;

The answer is numbers. Natchez-Adams County doesn&8217;t have a large enough population, nor are there enough people in the surrounding area, to support such stores.

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&8220;In the area, we don&8217;t have the volume or the resources to justify their projections, that&8217;s been a challenge,&8221; Economic Development Authority Chairman Woody Allen said.

&8220;Our economic base is not strong enough to bring in those kind of retailers.&8221;

The news is not all bad

But does it take the big chain stores to create a healthy retail climate in a city like Natchez? A state economist says Natchez is doing well as a retail center.

Bob Neal of the Mississippi Institutes of Higher Learning Center for Policy Research and Planning said Adams County is one of 18 counties in Mississippi that ranks above average in retail sales impact.

Neal uses a formula that measures personal income and retail trade dollars against a state average in both areas. &8220;The most recent analysis of data shows that Adams County is doing pretty well,&8221; Neal said.

Statistics show that Natchez &8212; like such places as Tupelo, Hattiesburg, Vicksburg and Tunica &8212; is reaching and surpassing its potential to attract retail customers from outside the county.

Still, the possibilities for growth in Natchez are tantalizing, as anyone familiar with Meridian will know.

Nestled at the intersection of Interstates 20 and 59, the once sleepy town has morphed into a retail, industrial and medical center whose reach extends well into western Alabama. They&8217;ve got the stores &8212; and jobs and facilities &8212; to prove it. But they also have a keen sense of what drives their success.

&8220;It&8217;s not just the 78,000 people in the (Lauderdale) county, it&8217;s the 440,000 people within a 65-mile radius,&8221; Wade Jones said. &8220;We realized our economy is supported by a region.&8221;

Jones, the president of the East Mississippi Economic Development Authority, said when retailers consider expanding into a community, they do their homework.

&8220;I think these retailers, when they are looking to expand, they often know more about us before they meet us than we realize,&8221; he said.

&8220;What is that driven by? I think it&8217;s driven by having the critical mass of people and having the purchasing capability to put those investments in a community.&8221;

Natchez&8217;s EDA leader Allen agrees, saying a good way of building toward that critical mass of people with money to spend is through jobs.

&8220;Retail follows jobs,&8221; he said. &8220;When you see a good, healthy retail market, that means you&8217;ve got a lot of people working and making a lot of money. Retail will follow the money.&8221;

Allen and the EDA do the heavy lifting when it comes to industrial recruitment, which Allen said is the key to the whole retail puzzle.

&8220;I think if we can grow our economic base, the retail will follow.&8221;

Natchez economic developers, like those in Meridian, have studied the numbers to determine what comprises the Natchez trade area.

Figuring populations in Adams County as well as in Claiborne, Wilkinson, Franklin and Jefferson counties in addition to Avoyelles, Concordia, LaSalle, Catahoula, Franklin and Tensas parishes, developers say the Natchez trade area includes 175,453 potential shoppers.

Exactly what is retail trade?

For some, the term retail trade may call up images of buying shoes or furniture. For others, retail simply may bring thoughts of shopping at Wal-Mart or McRae&8217;s.

In fact, retail includes many more kinds of sales, and, in Adams County there are more than 1,200 businesses or individuals who collect the 7 percent state sales tax and send it to the Mississippi Tax Commission for disbursement, some to the state and some back to the municipalities in which money was collected.

Retail establishments include auto dealers and gasoline stations; building and hardware supplies; garden supply; mobile home dealers; eating and drinking places, food stores, general merchandise and apparel and accessories; health facilities; home furnishings and equipment stores; and other miscellaneous stores.

In the 1990s, state legislation created for Natchez an additional 3 percent tax on bed-and-breakfasts and hotels and a 1.5 percent additional tax on restaurant receipts, both to go directly to Natchez tourism promotion.

Why does retail matter?

The Tax Commission returns to a city government 18.5 percent of the 7 percent retail taxes collected by merchants and suppliers in that city.

Asked to explain how Natchez residents should respond to that fact, City Clerk Donnie Holloway said, &8220;Shop in Natchez. It really does make a difference to the city and to the taxpayers.&8221;

The retail taxes returned to Natchez account for 40 percent of the general fund of the city&8217;s budget, Holloway said. &8220;It&8217;s very significant for us.&8221;

Sales taxes received in October, $394,551, are up 6.7 percent over the same time last year, he said. Those taxes were collected in August. &8220;I can&8217;t wait to see what September is going to be,&8221; Holloway said, remembering the increase in Natchez population in the aftermath of two major hurricanes.

Other factors make retail sales important to a community, said Bob Neal of the IHL policy center, not the least of which is that people like to shop near their homes.

&8220;Without a vibrant retail economy, they go somewhere else. That means their dollars and the impact of those dollars go somewhere else,&8221; Neal said. &8220;And retail sales generate a lot of secondary impact, particularly for a community that depends on sales taxes for programs.&8221;

Neal&8217;s advice is that a community must nurture its start-up retail businesses. &8220;People on average are not as prepared as they should be,&8221; he said. &8220;They start out undercapitalized. Most beginners underestimate what they need for the first 18 to 24 months.&8221;

That is where all the organizations and individuals with expertise can step up to offer advice and assistance &8212; right from the beginning. &8220;Anything a community can do to help smaller businesses survive during those opening months, you want to do it,&8221; Neal said. &8220;Give them information and advice on how to weather that first period.&8221;

Recruiting the right retail

Janell Verucchi, the regional property manager for Aronov Corporation, owner of the Natchez Mall, said the property is doing well despite not having the sexy nameplates of bigger malls.

The mall is 92 percent occupied with several more businesses moving in either for the Christmas season on a longer-term basis as a consequence of Hurricane Katrina.

There is an audio store from the coast moving into the mall in the next few weeks and Verucchi said she is talking to other businesses seeking places to set up shop.

Verucchi said she stays in contact with the EDA but the mall does most of its own recruitment.

&8220;Your bigger (name) stores are strictly going to go after demographics: population, minimum income, number of households. They have a shelf and you can&8217;t be below that shelf for them to even look at you,&8221; she said.

And what is Natchez&8217;s position vis-ˆ-vis that shelf?

&8220;We&8217;re way below the shelf.&8221;

Limited Corporation, Gap Corporation, American Eagle &8212; Verucchi said companies such as those typically look to enter markets with a population over 150,000 people.

Those companies cater to certain segments of the population; therefore they must locate in larger markets.

Retail recruitment is a double-edged sword, said Cliff Brumfield, executive vice president of the Brookhaven-Lincoln County Chamber of Commerce.

When Home Depot, which opened in Brookhaven in July, announced plans to open there, the community reacted both with excitement and apprehension, Brumfield said.

&8220;There was a lot of concern beforehand and excitement, too. I used to be a retailer. I know you have to build a strong strategy to compete, and almost all the big-box stores can be competed with.&8221;

The smaller stores in Brookhaven have done that, figuring out ways to remain vital in the community, he said.

Surprising to some was the number of new shoppers who have come to Brookhaven because of Home Depot. &8220;We know that people from the little towns 30 or 40 miles away are coming here to shop who didn&8217;t used to. They may shop in some of our other shops, as well.&8221;

Recruiting retail businesses that will be successful calls for looking for those that will be &8220;a good natural fit with what you already have,&8221; Brumfield said. &8220;We work to foster growth that doesn&8217;t take away from the mom-and-pop businesses, which are our anchors.&8221;

Successful recruiting also requires all economic development officials to work together, he said. &8220;There is strong cooperation among the city, county and chamber. We work for the common good with one voice,&8221; Brumfield said.

For a city such as Natchez, the retail businesses, especially those downtown, help to set the tone of the entire city, said Tammi Gardner, executive director of the Downtown Development Association.

&8220;Especially for a city like Natchez, it&8217;s important what type of retail you have,&8221; Gardner said. &8220;Natchez draws a certain type of clientele who come to stay in the bed and breakfasts and eat in our nice restaurants and shop in the local stores. It&8217;s very important to have the small, unique, entrepreneurial businesses that we have.&8221;

A Colorado native, Gardner saw the popular resort city of Aspen make mistakes in its retail development and then realize the error.

&8220;Aspen started out with the small, locally owned shops but as they became more successful they began to get stores like Gap and Banana Republic,&8221; Gardner said. &8220;People missed the small businesses. And now they are again seeking the original, small businesses. That&8217;s what people like about shopping in Natchez.&8221;

This is a lesson well learned by Laura Godfrey of the Chamber of Commerce, also. Her group works to recruit and help retail business of all size flourish in the area.

&8220;We are constantly recruiting retail. Our recruitment is not just for the downtown, it&8217;s a county-wide effort.&8221;

Godfrey said shops downtown are doing well and despite the lack of big-box stores, the future is bright.

They are careful not to recruit businesses that wouldn&8217;t survive or would take business away from successful local merchants.

&8220;You have to be realistic and give them accurate information and hope for the best,&8221; she said.

With this strategy of helping businesses of all sizes prosper, Godfrey thinks the Natchez retail scene is heading in the right direction.

&8220;I feel like our mix has improved a lot in the last few years,&8221; she said.

&8220;We see great things on the horizon for Natchez at the Chamber.&8221;