What about In-N-Out Burger & Trader Joe’s?

As the Director of Economic Development for Tuolumne County, I am asked the following two questions numerous times each year. When will we get an In-N-Out Burger? When will we get a Trader Joe’s? The purpose of this month’s blog is to summarize TCEDA’s current direction, explain types of retailers, and provide insight regarding the baseline requirements of retailers when they consider expanding into new communities.

The current TCEDA work plan does not focus on retail recruitment as part of the allocation of staff time and resources and has not for the last few years. The TCEDA had a minor focus on retail from 2009 to 2011 to help refill the empty Gottschalks and Mervyns’ buildings. Both locations lost their retailers due to the effects of the “great recession.” Along with City and County staff, building owners, and commercial real estate agents; the TCEDA helped fill both buildings with the current tenants of Kohl’s, PetSmart, JoAnn’s Fabrics and Big Lots.

There are two general categories concerning types of retailers. One type of retailer is “local serving” while the other type of retailer is “destination retail”. A local serving retailer is a retailer who derives a majority of it sales from local residents and, therefore, circulates local dollars into the economy. The destination retailer is a retailer who attracts a majority of its customers from outside, in this case, Tuolumne County.

Most national retailers and a few local retailers in our community fall in the “destination” category and, therefore, capture outside sales tax dollars from surrounding communities and deposits those dollars into Tuolumne County’s economy. By bringing in outside dollars to our community, jobs and investment are created. This change would not happen if we did not capture these outside dollars.

When retailers consider locations for their new expansions/outlets, they rely heavily on demographics and their particular “retail model.” The “retail model” is derived from a corporate decision that companies use to determine where they can get the best return on their investment for the limited amount of capital they have to invest in new outlets. It tends to vary from company to company and is one of the biggest factors that drives their location decisions.

Some of the most requested retailers by our county’s citizens are listed below in conjunction with their baseline requirement(s). These baseline requirements must be met before these companies would consider entering into discussions regarding the establishment of new locations. (Remember: Tuolumne County’s 2013 population is 53,874 and its median income is $48,169.)

• Best Buy – 100,000 residents within 10 miles of the store with residents who have at least a minimum income of $50,000.
• BJ’s Restaurant and Brew House – 150,000 residents within 5 miles of the restaurant. Plus an additional requirement of 30,000 cars/trucks passing by (known as ADT) the location.
• DSW (Designer Shoe Warehouse) – 200,000 residents within 5 miles of the store with residents who have at least a minimum income of $60,000.
• In-N-Out Burger – 60,000 residents within trade area (usually 5 miles) of the restaurant with residents who have at least a minimum income of $45,000. Plus an additional requirement of 50,000 cars/trucks passing by (known as ADT) the new In-N-Out Burger location.
• Macy’s – Not considering locations in non-metro areas of California at this time.
• Nordstrom’s – Not considering locations in non-metro areas of California at this time.
• Pier 1 Imports – 100,000 residents within 7 miles of the store with residents who have at least a minimum income of $50,000.
• Trader Joe’s – 90,000 residents within 3 miles of the store with residents who have at least a minimum income of $50,000.
• Ultra– 10,000 residents within trade area (usually 5 miles) of the store with residents who have at least a minimum income of $50,000.

As you see listed above, there are a number of retailers and restaurants on the community’s “wish list.” However, Tuolumne County’s current demographics do not meet the baseline requirements of these retailers.

While the TCEDA does not actively recruit retailers and/or restaurants, we do help those who directly ask for our assistance; as we do for any business in Tuolumne County. We focus our staff time on companies that are healthcare, manufacturing or technology related as they create and/or retain well-paying jobs for our citizens. Citizens who can then spend their hard earned dollars in Tuolumne County and contribute to our local economy.