Thursday, December 23, 2010
For Marin retailers, this has been the best retail sales period for many years. The 1% retail sales tax distributed to cities in Marin in December (the purple line on the chart below) was over $3 million, a 10.7% increase over 2009 AND it was above both the 2008 and 2007 totals for the same month.
So is this the start of a new era of prosperity - or a blip in an otherwise unimpressive year?
Tuesday, December 21, 2010
Earlier in the day Target launched its charm offensive by stationing people around the city with large red "Yes Target" signs. There's also a website, Facebook page and twitter feed. The opposition group also has a "Heck No" Facebook page, and is attempting to get enough signatures on a petition to force a referendum.
As an aside, it is interesting to see that Target is claiming $675,000 in new sales tax revenues will be provided by the new store. If this figure is the 1% sales tax that goes to the City of San Rafael, that would suggest Target expects the store to make $67.5MM in annual retail sales, which just happens to correspond to $500 per square foot for the 135,000 sq.ft store. Add on to that figure sales from groceries (which aren't taxed) and you have what will be one of the best performing Target stores in the nation (Target's average sales performance was $287 per sq.ft in 2009).
Of course this won't be new sales tax, but will instead be the tax that would have been paid at wherever Target's customers shopped before the new Target appeared; so the majority of it will be a diversion of tax receipts to the City of San Rafael from other Marin cities, in particular the City of Novato, which is where locals buy their Target stuff now. A sizable proportion would likely also be diverted from other stores in San Rafael, so the net new tax receipts for the City of San Rafael would be somewhat less than $675,000.
Overall, I think $70MM+ in annual sales is rather ambitious for a store in this inconvenient and unattractive location, so don't be surprised if the numbers come in quite a bit lower than advertised.
Monday, December 13, 2010
Saturday, December 11, 2010
Monday, December 6, 2010
- Malia Mills (designer swimwear)
- Erica Tanov (Berkeley-based designer fashions)
- James Perse (Los Angeles designer - women's, men's and home)
- Twig and Fig (upscale stationery)
- Miette (Cupcakes and pastries, small store in the San Francisco Ferry Building)
- Rustic Bakery (Larkspur's own organic bakery, with stores on Magnolia Ave. and Grant Street, Novato)
- Poppy Store (Kids designer clothing; another tenant of the original Brentwood Country Mart, and owned by "According To Jim's" wife Jenny Belushi)
The reason the Mart needs to pull customers from beyond the Marin area is that upscale designer boutiques only serve the top end of the market - the wealthiest 5%-10%. Marin is a wealthy place, but there are only 12,157 households that have incomes of $200,000 or more (according to the 2000 Census). That makes for a very thin market, which is why high-end fashion districts and malls are usually only found in the larger cities.
Los Angeles County, where the The Brentwood and Malibu Country Marts are located, had 108,889 households with incomes above $200,000 in 2000.
In the San Francisco Metropolitan Area (the Bay Area), there were over 150,000 households in this highest-income group. These shoppers tend to gravitate towards Filmore Street and Union Square in San Francisco, which are the two largest high-end fashion districts.
The owners of Marin Country Mart are trying to position the center to take a piece of this market. According to the Mart's marketing brochure there are 75,000 households with incomes above $200,000 within a 30-minute drive. That suggests a trade area that extends as far as Oakland, southern San Francisco and Santa Rosa.
For the concept to work the center will need a critical mass of upscale retailers. The three existing anchor businesses at the center are 24-hour Fitness, the Marin Brewing Company and Bed Bath and Beyond. These are strong business that are local destinations in their own right. They anchor the center, fill the car park, and provide the bulk of the rent. But they are not upscale and are not going to help sell the center as an upscale destination.
It looks like Mr Rosenfield will need to add a few more big-name designer stores and some high-end eating and drinking establishments if he is going to succeed in tempting the the Bay Area's wealthy to make repeat visits to the Marin Country Mart.
*Update: the Mart's website now has some detail, including a mall directory
Thursday, December 2, 2010
The Plaza was acquired earlier this year by LRG Capital Real Estate Partners, a Larkspur-based investment fund. In keeping with the green philosophy of both the store and the town, the project team is considering several sustainable features, including daylighting, solar PV and a grey water reuse system.
This is a smart move by the Good Earth owners. It's a relatively safe expansion in a town where they are already established with a store that residents like. It also prevents any competitors from opening in the Fair-Anselm space. And there is no chance a competitor will open in their old store: Good Earth plans to use that building for their school lunch business.
Tuesday, November 30, 2010
DeLano's presence in Marin began in 2006, when they took over five Bell Markets. Poor performance led to the closure of the DeLano's market in downtown Tiburon in February 2009, and the store in Novato closed the following August.
The two Southern Marin stores have likely seen a sales decline following the opening of Whole Foods at the Alto Center in Mill Valley. The Fairfax store benefits from little local competition, although that would change if a market is found by the new owners of the Fair-Anselm Plaza.
So what now for the closed stores? According to Fresh & Easy Buzz, There are a few small-format grocers currently looking to expand in Northern California, including Fresh & Easy, Henry's Farmers Market and Sprouts Farmers Market. Any of these would be good new additions to Marin County. Local grocer Mollie Stones may also be interested, although the Southern Marin sites may be considered too close to Mollie's existing stores in Sausalito and the Bon Air Center.
Monday, November 29, 2010
Monday, November 22, 2010
Designing a LEED system for retail is challenging simply because of the inherent purpose of retail buildings. The original LEED programs were designed for office buildings and civic uses, which are essentially spaces for people to work in, and in most cases that implies low-impact activities, such as sitting at a computer or in a meeting room.
For retail mall owners, the comfort and accessibility of the common areas and parking is equally important. The developer and owner have less ability to influence the behavior of customers, and are shy of imposing any rules or restrictions that could turn customers away. In Marin County, the redeveloped Northgate Mall is aiming to achieve LEED Gold certification. One of the LEED strategies was to provide preferential parking for low emission vehicles. This involved designating 154 spaces that were closest to the mall entries “for low-emitting vehicles”. Shopper confusion and anger was immediate, and the project owner responded by blacking out the signage soon afterwards.
Looking at the individual credit requirements, below are some of the key areas that are different in LEED for Retail.
- Kitchen equipment. The commercial kitchens that prepare food in cafes, restaurants and grocery stores have a major impact on the sustainability of the building. The operations of these types of retail business are more akin to manufacturing facilities than the passive, low use office, school, residential and civic buildings that LEED grew up on. Meal preparation uses energy and raw materials, and creates waste and emissions. The LEED for Retail guide dedicates a full section to the issue of kitchen equipment, with a schedule of equipment types, efficiency ratings, water use and the ratings required to achieve credits.
- Refrigeration units. Similar to the above, the nature of the freezers and large scale coolers used in grocery stores has required the inclusion of specific prescriptive standards within LEED for Retail.
- Light pollution. When it comes to outside signage, retailers have received a partial pass from the USGBC: external signage that is internally illuminated is exempt from the light pollution credit.
- Special provisions for multi tenant projects. In cases where the project is part of a master planned development, such as a retail strip or shopping center where several stores share common facilities, the new guide recognizes that certain requirements will need to be subject to a master plan for the whole development. Alternative transportation, parking, irrigation and landscaping are among the credit areas that require an overall plan for the whole project.
- Daylight and Views. It is not clear how these credits will be interpreted. Retail stores are designed with big widows that should in theory provide access to daylight and views for staff. But those credit points will be of no practical value if the light and views are then blocked by window displays, merchandise and signage. Next time you are shopping in the middle of the day, see if you can find a store that uses natural light instead of artificial.
Wednesday, November 17, 2010
Further north, on the corner of Rich Street, the unit previously occupied by Golf Mart has been taken over by a toy store, going by the name of Toy World. Not sure if the business is connected to Solaria's Toy World in the nearby Bon Air Center, or whether the name is just a coincidence.
Monday, November 15, 2010
"Our working families need the convenience of economically priced items in one place that doesn't require a trip on the freeway," Chairwoman Maribeth Bushey-Lang said. While "there are a lot of reasons why this is not the ideal location by any stretch of the imagination," job creation, sales tax revenue and convenient shopping outweigh those concerns, she said.
Tuesday, October 19, 2010
- Fairfax lives up to its reputation as being somewhat disconnected from the rest of the county, having maintained higher levels of sales tax revenues over the last two years, albeit with a decline over recent months at a time when other towns are recovering.
- Corte Madera was hit quite hard at the beginning of the recession, but has shown the strongest recovery this year, and is my bet for being the first city to break back through 100 on the index. Novato has followed a similar path and is not far behind.
- Sausalito, Larkspur and San Anselmo were more resilient at the start of the recession, possibly because of their reliance on eateries and local services, but were hit hard in 2009 as residents were hit with job losses and house price declines.
- San Rafael and Mill Valley are each still below 80% of their pre-recession retail sales. San Rafael accounts for approximately 1/3 of Marin retail sales but has been hit with 1/2 of the county's sales decline. Mill Valley's acute decline is likely connected to its population base, which includes larger numbers of workers in finance, business and other sectors hit with job losses.
- That leaves Tiburon in last place. Despite being the County's wealthiest town, its retail sector has imploded in the last few years, with sales now at just 66% of their 2008 level. A small retail sector, with a heavy reliance on tourist spending, is likely the reason behind the poor performance.
Monday, October 18, 2010
Friday, October 8, 2010
Monday, October 4, 2010
The proposed Target store at San Rafael was in the news last week as the San Rafael Chamber of Commerce postponed making a decision on whether or not to support the development.
This is a familiar big-box retail situation that has played out across the United States. Typically, the City often favors the development because it creates jobs and provides fiscal benefits from sales taxes. Other retailers and their representatives denounce the effect that the proposal will have on locally-owned independent businesses and the historic downtown and neighborhood stores. And the proponents claim that they will be providing a service that will compete mainly with other big box stores and will allow people to shop locally instead of having to drive to the big box stores and malls in other towns further away.
The Chamber plans to research other communities where Target stores have located. There are many examples where unlimited development of strip malls has killed downtown retail areas, but fewer where the impact of one store is clear cut. Target and Wal-Mart have plenty of experience in making their case in these situations.
A 135,000 sq.ft Target store like the one proposed in San Rafael would probably generate $40m-$50m in annual retail sales. The size of the retail spending market in central and southern Marin in the categories of goods that Target sells is approximately $1 Billion. Often, retail developers will cite growth in retail spending as demonstrating a need for new development. This isn’t the case in Marin, where population growth is less than one percent annually, and retail sales have been in decline as a result of the recession and the longer term growth of internet sales. The new Target’s $40m-$50m annual revenue would instead come from existing spending, which means on average the new store would capture 4%-5% of existing stores’ sales. This average figure represents a fairly minor sales decline that could be considered as being within the normal scope of competitive business. However, the distribution of impact will not be even, but will depend on (1) geography: the closer, the higher the impact, and (2) comparability: customers are more likely to switch from similar stores selling similar products; therefore niche, gourmet and specialty stores are less likely to notice an impact, but department stores and big box mass-market stores would take a larger hit.
Among the retailers in downtown San Rafael, many of the fashion boutiques and niche stores selling gifts and accessories wouldn’t compete directly with Target. The stores selling more generic items, like toys, sports goods, household goods, books, electronics and cds are in more danger of taking a sales hit from Target. And all businesses, including the eateries and health & beauty services that don’t directly compete with Target, will suffer if the new store reduces shopper traffic along Fourth Street.
Sunday, September 12, 2010
Wednesday, September 8, 2010
Tuesday, September 7, 2010
Thursday, September 2, 2010
Tuesday, August 31, 2010
Exceptional boutique shopping, neighborhood services & fine foods. A community gathering place with a children’s play area, grassy lawn, raised gardening beds, wishing well, picnic tables & benches, a fire pit & a famous duck pond.
Monday, August 30, 2010
Thursday, August 5, 2010
Friday, June 11, 2010
Sunday, May 9, 2010
The retailers around the Square include many long-established retailers that serve the local community, plus a few destination businesses that draw people from further away. There's a predominance of hair salons and personal & business services, with just a few stores selling goods, food and drink.
Businesses along Corte Madera Avenue include Stefano's Pizzeria, Passion Flowers, Eat My Cookies and Ricks Wine Cellar.
Next to Menke Park on First Street, there's clothing consignment store Swan Dive, A-Line hair salon and a furniture consignment store: Peterson's Consign & Design. There's also the Marin outlet of The Dailey Method, which is usually packed with Marin Moms after the school drop-off and is possibly the most-visited business on the Square.
One of the oldest buildings is the old horse stables on the Tamalpais Drive side of the Square, which dates from around 1900, and is now occupied by Stellar Spa. Next to it is the only restaurant, Benissimo, the Corte Madera Cafe, and M Clothing. Also on this side is the newest business, Mobile Tech, a computer repair shop that recently moved from its former home further east on Tamalpais Boulevard (which is now being turned into a Bank of Marin branch). Mobile Tech occupies part of the building that was previously Tamalpais Paint and Color. The remainder of this building remains vacant.
Around the corner of Corte Madera Avenue is a laundry and the Twin Cities Market & Deli, which specializes in deli sandwiches and has a selection of Australian wines, beers and candy, courtesy of Les, the Aussie owner.