Retail Market Analysis

What is it?

Retail trade area analysis seeks to answer questions about the relative supply and demand of retail goods within a local market area.  At a basic level, retail trade analysis can help a community to identify to what degree there are net outflows or inflows of retail consumption dollars.  By comparing actual retail dollars spent in a town or county to the potential retail dollars that could be spent in that town or county, this analysis can help communities to identify potential opportunities and voids in local retail markets.  If there is a surplus of dollars being spent in a local retail market, then this means that the town is actually selling more than what is predicted for the local population base – and therefore drawing people in from other areas.   On the other hand, if less dollars are being spent locally than what the potential is, based on population and income levels, then the town is experiencing a leakage of retail trade – i.e. people are traveling outside the local community to purchase these retail goods.  GIS (Geographic Information System) is a useful tool that can be applied to this analysis to provide additional insights about the spatial distribution of retail sales and retail sales potential.

What is available for Ohio communities?

This type of analysis can be performed with information on the current retail sales of an area, broken down into different retail sectors. Data on 1999 retail sales (broken down into 28 retail sectors) from Ohio is combined with 1999 population and income estimates to compare actual and potential retail sales numbers.  Data are available at the census block group level, which allows for analysis of retail patterns within counties.   Retail sales data and population and income estimates come from AGS (Applied Geographic Solutions).

For more information

For more information, contact Elena Irwin, state specialist in regional and community economics and assistant professor in the Department of Agricultural, Environmental, and Development Economics.

Presentation: Retail Market Analysis

Sample of recent retail market analysis: Mechanicsburg, OH (pdf format)

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Update 10/29/02 by Elena Irwin