Thursday, December 23, 2010

Marin retail sales best in four years

Retail sales are surging back as customers across the nation head to the malls and exercise all the pent-up spending energy they've been accumulating during the recession.

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

San Rafael Target decision delayed again; and where did that sales tax come from..?

San Rafael Council failed to come to a decision again on the proposed Target in San Rafael after another marathon session at last night's Council meeting. This time the loudest noises were being made by those in opposition to the store, who continue to ask questions about traffic impacts, minimum wages and the effect that the store will have on local Mom & Pop retailers.

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

CVS drug store to open in Tiburon

Finally some good news for Tiburon: CVS is planning to open a new store in the space that was vacated by DeLano's Market nearly two years ago. According to the Marin IJ, the store will include a drive-through pharmacy.

(photo credit: Summit Model Train Kits)

Saturday, December 11, 2010

Marin retail sales edge up in November

Retail sales tax distributions in Marin showed strong growth in November, coming in18.6% above November 2009. 
So far in 2010, some $25.5 million of sales tax receipts has been distributed to Marin's Cities, up 4.2% from the same period in 2009. There is still a way to go before retail sales recover to their pre-recession levels: sales to date in 2010 are 13.2% below those of the same period in 2008.

Monday, December 6, 2010

Can the Marin Country Mart lure upscale Bay Area shoppers?

It's fascinating to see the first batch of new retailers appear at newly-landscaped Marin Country Mart. Owner Jim Rosenfield, who recently said that he had lost $7 million on the Brentwood Country Mart, has been successful in selling the Marin concept to some of his existing Brentwood tenants. So far, either open or in the pipeline, we have:
  • 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)
Good to see lots of stores that will be new to Marin. There's a clear "upscale designer" theme emerging, that suggests the Mart is being positioned as a regional destination, which is something that no other Marin mall or shopping center has attempted.

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

Smart move of the week: Good Earth to relocate to Fair-Anselm Plaza

A photo-shoot and lease signing ceremony generated lots of press yesterday for the news that Good Earth Organic and Natural Foods Store is expanding and relocating to the ex-Albertsons store at Fair-Anselm Plaza. The store will grow in size from 8,000 sq.ft currently to 20,000 sq.ft and include an expanded prepared foods selection and more non-food items.

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.