UW-Madison UW-Madison

Staff Paper No. 404 - Abstract

A Trade Area Analysis of Wisconsin Retail Markets

Steven Deller [scdeller@wisc.edu]

Staff Paper No. 404, December 1996, 27p.


The development of a community's retail market should be an integral part of the community dvelopment process. Some, however, might argue that the retail sector develops naturally following other types of economic development such as growth in the manufacturing sector or an influx of tourists. To a degree this is true. Several factors, however, may prevent this process from being completely efficient. First, the process used by many franchise retail businesses tends to be baised toward medium and large size cities. While some retailers, such as Wal-Mart and Hardee's have succeeded by focusing on smaller rural markets, the trend toward volume retail limits the appeal of most smaller communities. Second, the same site selection process tends to focus on the optimal location within a community, not neccessarilty the optimal community. If local development practitioners can provide compelling evidence that their community's suitability, they may have provided the retail firm with vital information that it either could or would not develop on its own. Third, for whatever reason, there appears to be a lag between industrial development and retail expansion. This is in all likelihood due to an imperfect flow of information. Because many retailers are worried more about site selection, they are unlikely to be aware of the increasing potential of the community. Finally, for many small rural communities, retail development is fostered not by national franchises, but by local entrepreneurs. Unfortunately, many of these entrepreneures lack the marketing background required to identify opportunities or, more importantly, sell their business idea to local investors. The benefits of developing a strong local sector are numerous. Naturally, tax revenues either through the property tax and/or the sales tax, will increase. Jobs will be created and dollars earned in the community through the industrial base will be retained.
This paper is not available electronically at the present time. See authors for instructions on receiving it in print
Last updated on Thu, Jun 2, 2005 11:10am