STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of September 13, 2022
TO: Members of the City Council
SUBMITTED BY: Dante Hall, City Manager
SUBJECT: Presentation on the Insight Market Analysis Report Prepared by HdL ECONSolutions
RECOMMENDATION
Staff requests that the City Council receive a presentation on the Insight Market Analytics Report and an update on next steps, including preparation of a Community Profile (5 to 6 page marketing tool) and a Void Analysis to identify possible targeted users and business type categories for retail recruitment.
FISCAL IMPACT
All expenses for Economic Development services are reimbursable from the City's American Rescue Plan Act of 2021 (“ARPA”) funds.
BACKGROUND AND DISCUSSION
On June 29, 2021, the City entered into an Agreement with HdL to provide assistance with developing a strategy for COVID-19 relief and the use of federal stimulus funding coming from ARPA. On April 26, 2022, the City entered into the First Amendment to the Agreement with HdL to assist in the overall administrative oversight of Hercules' ARPA programs targeted at assisting Hercules businesses as well as to provide Economic Development services including retail attraction and development services support. One of the components of this support was to develop an INSIGHT Market Analytics report package, Community Profile & Void Analysis of retailers to target for the marketplace.
Attachment 1 is the City of Hercules' INSIGHT Market Analytics Report prepared by HdL. The report examines the make-up of the residents, consumers and the retail marketplace within the City of Hercules and its trade area (within a 5-, 10-, and 15-minute drive). The report also assesses consumer demand versus market supply and where there is opportunity for new commercial development to meet the demand.
Below are some key observations about Hercules and its strong demographic composition:
The City of Hercules has a population of 26,073 and a daytime population of 17,266 Hercules has 8,847 households. 78.5% of the households own their homes vs 21.5% who rent Hercules residents are 74.1% White Collar and 25.9% Blue Collar 49% of Hercules residents have a college degree or higher The average household income in Hercules is $138,310. The median household incomes for Hercules and Contra Costa County are $118,881 and $104,767, respectively Hercules is ethnically diverse with 18.4% White, 15.3% Hispanic, 16.7% Black, and 44.3% Asian The Consumer Demand & Market Supply Assessment was used to provide a macro appraisal of the Hercules marketplace. Data for this report was provided via the Market Outlook database from Synergos Technologies, Inc (STI), which is the leading and most reliable data source for market analytics. The Market Outlook is based on the following:
The Consumer Expenditure Survey (CE), a program of the Bureau of Labor Statistics (BLS); The U.S. Census Bureau's monthly and annual Retail Trade (CRT) reports; The Census Bureau's Economic Census; with supporting demographic data from STI: PopStats data and STI: WorkPlace.
Market Outlook data uses 31 leading retail segments and 40 major product and service lines. The difference between demand and supply represents the opportunity gap or surplus available for each retail outlet cited on the Market Outlook report for the specified trade area or reporting geography. When the demand is greater than (or less than) the supply, there is an opportunity gap (or surplus) for that retail outlet. In other words, a negative value signifies an opportunity gap where the Consumer Demand is higher than the Market Supply, while a positive value signifies a surplus.
The report indicates that there is a supply gap for furniture stores, sporting goods/hobby/musical instruments, home furnishing stores, shoe stores (100% gap for the first four), clothing stores (81% gap), building materials/supplies dealers (80% gap), grocery stores (79% gap), and auto parts/accessories/tire stores (60% gap).
The INSIGHT Market Analytics package is a very useful tool in illustrating Hercules' and the trade areas demographic and analytics composition, as well as possible opportunities for retail recruitment. The INSIGHT Market Analytics package should be placed on the City's website. The next step is for HdL to proceed with the final two work components in September and early October with the drafting of a Community Profile (5–6-page marketing tool) and a Void Analysis identifying possible retail targets and business categories.
ATTACHMENTS:
City of Hercules' Market Analytics Report
INSIGHT Market Analytics PowerPoint