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Retail Businesses That Work
In America’s Downtowns

By HyettPalma, Inc.
Making Downtown Renaissance a Reality

During the past two decades, HyettPalma has been constantly asked by our clients if there is a “formula” for the optimum mix of retail businesses that a Downtown should contain. Our answer has always been the same:

• All Downtowns are different, which is a good thing, and, as such, each Downtown has unique retail potentials which should be determined on a case-by-case basis;
• In order to determine the unique retail potentials of any given Downtown, that Downtown must be analyzed, its customers and potential customers must be identified, and their spending potential must be determined; and
• A specific course of action must be defined, based on solid market research, to chart a realistic course of action to capture the unique potentials of each individual Downtown.

These axioms remain valid today. They certainly help us chart realistic courses of action for the Downtowns of communities we advise.

However, to properly plan for the future, we do need an understanding of the retail mixes typically found in American Downtowns. To this end, HyettPalma conducted a purposive sample of 50 of our most recent Downtown clients from throughout the United States in communities with less than 50,000 residents.

Based on this national examination of Downtown retail mixes, we found that—of the retail businesses in the surveyed Downtowns:

• 31% offer specialty retail products, such as antiques, art, gifts, novelty items, flowers, jewelry, and reading material;
• 19% provide prepared food and sturdy drink;
• 14% serve a convenience and support role in Downtown, such as beauty and barber shops, office supply stores, movie theaters, and dry cleaners;
• 9% provide furniture and other home furnishings and accessories;
• 7% offer apparel and related accessories, including clothing and shoes for all ages and genders;
• 7% consist of automotive related businesses, including car lots, gas service stations, auto parts stores, and a few Harley shops;
• 5% sell food to take home, such as grocery stores, fish and meat markets, and bakeries;
• 4% offer entertainment and recreation, such as dance studios, gyms, and bowling alleys;
• 3% still offer hardware and home decorating supplies; and
• Only 1% continue to offer general variety merchandise.

What these findings tell us is that while retail in America’s Downtowns might not be what it was in Downtown’s “heyday,” it is far from dead. And, retail in America’s Downtowns has evolved from a “serve-everybody-everything” posture to a much more specialized mix, particularly in the areas of food and entertainment, art, personal services, apparel, and products for the home. For example, of the retail and retail-related businesses found to exist in Downtowns today, approximately:

• 21% provide hair care, related personal services, and clothing;
• 14% provide out-of-home dining;
• 15% sell products for the home; and
• The remaining 50% span a broad range of offerings, including items people need and a growing number of specialized items people want and can’t find elsewhere.

Significantly left to their own resources and natural market forces, Downtowns have managed to partially weather the tide of outside growth. And, the retail offerings of our Downtowns have survived over a half-century of radical change, again, in many cases left to find their own level of survival in an ever changing sea of retail growth in other commercial venues.

So, while we should always be concerned about the direction of retail development or lack of retail development in any Downtown, it must be understood that certain types of retail businesses are doing well today in many of America’s Downtowns and, with a little encouragement and support, many of the types of retail establishments found in America’s Downtowns today might just have a chance in your Downtown.

About the HyettPalma

Doyle G. Hyett and Dolores P. Palma are the founders of HyettPalma, Inc., the only national consulting firm specializing in the economic renaissance of Downtowns. For more information about HyettPalma, please visit www.hyettpalma.com.

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