Retail Runaround
Retail Runaround
November/December 2005
By Kimbriell Kelly
It’s 7:45 a.m. Tina Saphir has been awake and milling about for hours. She glances at the corner of her vestibule at a heap of recently purchased merchandise. Everything must go. Either it didn’t fit or didn’t work. But the mother of three decides that it must wait for another day.
Today, she’s headed on a road trip. It’s one that doesn’t happen as often as she’d like because of time and distance. But, with the minivan gassed up and the trunk full of beverages, she’s just about ready to go. Her destination: the grocery store.
It will be late afternoon by the time Saphir returns. She’ll spend a majority of the next four hours driving to and around a mostly white North Side neighborhood searching for groceries and other items at stores she cannot find in her predominantly black South Side neighborhood. “There’s money on the South Side and nowhere to spend it,” said Saphir, 36, an African American who lives with her husband and their three children in the Kenwood neighborhood.
During this holiday shopping season, residents of Chicago’s black communities are likely to spend nearly two-thirds of their money outside of their neighborhoods, far more than those living in Latino, mixed or white areas, a Chicago Reporter analysis of consumer market information shows.
In Chicago, the rate of major retailers per 10,000 residents is nearly three times higher in white areas than in black areas, according to the analysis. Some black neighborhoods are home to far fewer retailers than white neighborhoods even when their incomes are similar.
This means blacks in Chicago are likely to spend more time, money and energy than whites when they buy gifts, groceries, clothes, tools and other items at stores located far from their homes. It also means black neighborhoods lose out on billions of dollars in consumer spending each year that could help revitalize those areas. Furthermore, Chicago could be losing millions of dollars in sales tax revenue as many drive to south suburban Calumet City, Lansing and Evergreen Park, among others, to do their shopping.
The Reporter mapped nearly 900 Chicago addresses of companies that Stores listed as the top-selling retailers in seven categories: supermarket, apparel, department store, home improvement, drug store, restaurant, and value retailer, such as Target. Stores, a monthly magazine of the National Retail Federation, the world’s largest retail trade association, ranked the retail companies by their 2004 sales revenues.
The Reporter also examined consumer expenditures and retail sales figures for each of Chicago’s 77 community areas. The data were provided by MetroEdge, a market research firm, for the city’s department of planning. The Reporter defined black and white communities as being at least two-thirds black or white. Asian and Latino neighborhoods were at least 50 percent Asian or Latino. The Reporter found:
* Residents of black communities spend an estimated 64 percent of their consumer dollars, more than $5.3 billion a year, outside of their neighborhoods.
* Among neighborhoods with median household earnings between $40,000 and $50,000 per capita, white areas have 47 percent more major retailers than black areas.
* White neighborhoods have nearly eight times more apparel retailers than black neighborhoods.
* There are three times more major retailers in communities with a median income greater than $50,000 per capita than those where the median is less than $30,000.
Retail consultants said major retailers tend to herd where others have gone. That’s led to a dearth of retail options on the South and West sides. When a major retailer does consider those areas, however, they’re confronted with other issues that prevent them from opening stores there, such as their overall unfamiliarity with the neighborhoods and perceptions about crime, the consultants said.
“The perceptions are usually worse than the reality,” said John C. Melaniphy III, formerly of Melaniphy and Associates, a North Side consulting firm providing site selection and market assistance. “It’s going to take time, but there is going to be more business.”
In the meantime, Saphir has teamed with other South Siders who’ve agreed that the best way to get what they need from the stores they prefer is to carpool to the North Side after dropping their children off at Murray Language Academy in Hyde Park. That way, they can share the burden---and fuel costs---of driving across town.
Warmed by one of four remote-controlled fireplaces in her home, Saphir dresses 6-month-old Lael on the living room couch. She has gotten 5-year-old Ian off to school and is getting ready to drop 8-year-old Zoe off at Murray. Embracing a worn library copy of “Captain Underpants and the Wrath of the Wicked Wedgie Woman,” Zoe perches at the kitchen table. “Zoe doesn’t like being late for school,” Saphir says of the precocious youth whose report card on the refrigerator boasts As and Bs in all of her classes, including Japanese.
It’s 8:30 a.m. Saphir flicks her hair into a low ponytail, slips on a pair of sneakers and hoists a backpack over her head. She walks out the door, greeted by signs of the economic prosperity of her Kenwood neighbors. Manicured lawns are spread with gold leaves moistened by a light rain. Plumes of smoke are exhaled from the tailpipes of import cars bearing weathered alumni license plate covers. Street sweepers lurch toward the block where Saphir lives in a four-level graystone. There are million-dollar homes two blocks south. In a year, the Saphirs expect to get as much for their home.
If she had lived there anytime from the 1940s through the 1960s, Saphir would have had better luck shopping in her own neighborhood. During that time, the intersection of 47th Street and Cottage Grove Avenue, just a few blocks from Saphir’s home, was at the heart of a successful business district for blacks. But things began to sour in the 1970s as many of the area’s middle-income residents began moving to other parts of the city.
Residents near the Ida B. Wells public housing development moved elsewhere, and less wealthy people moved in. Businesses fled, creating a skeleton of commercial development that has since spawned a difficult environment to lure developers.
Vacant buildings now dot Cottage Grove, where the intersection at 47th Street is known for a liquor store with late hours and people congregating in front of businesses.
Bernita Johnson-Gabriel, New Communities Program director of the Quad Communities Development Corporation, recently drove through the area with a representative from a company interested in opening a business there. The development corporation, chaired by 4th Ward Alderman Toni Preckwinkle, attracts businesses to the Douglas, Oakland, Grand Boulevard and North Kenwood neighborhoods. The area has $191 million in purchasing power per square mile, 23 percent more than the citywide figure, according to a 2004 study by MetroEdge. Most of those dollars are now spent outside the area.
Johnson-Gabriel sensed some caution and probed more. The representative told her that, aside from statistics, there are other important things he’s looking for when deciding where to locate: Was this a place he’d let his daughter work at 1 a.m.?
She has held a subsequent meeting with the representative, but they have yet to strike a deal.
“You’re not looking at statistics when you’re looking at safety. You’re [physically] looking out there,” said Chinwe Onyeagoro, a planning consultant with OH Community Partners, who helped Johnson-Gabriel’s group develop a five-year plan to bring retail to Cottage Grove.
Retail consultants said some areas may be deemed risky for unmeasurable things, like poor lighting, blight, or people loitering. Retailers avoid such areas because they may require more lighting, fencing or security.
“One of the biggest barriers is the perception of crime---right or wrong,” Melaniphy said. “Obviously, we look at crime statistics when we conduct a study in an area where we think crime might be a factor. So we try to differentiate the perception and the reality.”
The Quad Communities group has created a multi-pronged redevelopment plan that includes marketing, beautification and networking. The group will also embark on a heavy-handed marketing campaign to pursue proven urban developers.
The plan includes trying to keep people from congregating in front of businesses. That way, the perception of fear and crime will be lessened, Onyeagoro said. “What we’re focusing on doing now is bringing life to the corridor and bringing change,” she said. “So, when developers drive by, they see things are going on and we’re not sitting back and waiting for them.”
When considering potential sites, retailers might spend thousands of dollars on research to assess land availability and market profiles with demographic and socioeconomic information such as household size, income and education. They’re also mindful of close competition and traffic volume, said George Rosenbaum, chairman of Leo J. Shapiro and Associates, a Chicago-based survey research firm.
However, their primary form of research is done through site visits and in-person surveys. “You interview the managers and sales people of other stores in the area. They will very candidly tell you if they’re having problems because of a shooting or fear of crime. But you really pick it up directly from consumers,” Melaniphy said.
Retailers also try to anticipate possible “blind spots”---theft, a 5-year expressway construction project or unfavorable traffic patterns. “What you now have to do is go there, look at the area, walk it to see if there are some unexpected barriers that would impede people’s ability to get to the store,” Rosenbaum said.
Some places are nixed because existing stores are dissimilar, or there are too many nearby vacancies. “When the retailer drives the corridor and sees 30 percent of the retail is [vacant], how can you convince them [their business] is going to be successful?” said Onyeagoro.
But experts said most retailers aren’t intimately familiar with minority neighborhoods and could rely more heavily on their perceptions than research that might suggest that there’s money to be made there.
“When you look at some of the national companies and their real estate representatives, it’s kind of a fact: there’s not that many blacks, Hispanics and [people of] other ethnic origins that really know the neighborhood and the characteristics of the neighborhood,” Melaniphy said. “And their reputation is on the line to select the location that’s going to generate a required sales volume.”
Of the Gap company’s 21 Chicago stores, 14 are in white communities, including six in Lincoln Park. The company, which owns Banana Republic, the Gap and Old Navy, has two stores in Latino areas and one in black neighborhoods. “We evaluate all of our locations in the context of that specific market. We first look at the existing store base in the market to determine how and where we’re already represented,” said Gap spokeswoman Sarah Anderson. “Then, we work to identify the sales potential of that particular market and analyze the shopping patterns of that market’s population.”
Chipotle, a subsidiary of McDonald’s Corp., has 17 restaurants in Chicago. Eight are in white neighborhoods, one in Latino areas and none in black neighborhoods. “Ethnicity is not a variable that we look at. At least it’s not a primary variable,” said Chipotle spokesman Chris Arnold. “The things that matter most to us are education level, income levels and a balance between daytime population and nighttime population.”
The Limited Brands operates its Limited stores as well as Bath and Body Works, Express and Victoria’s Secret. Of the company’s 18 Chicago locations, 12 are in white areas, and four are in Latino areas. None are in black community areas.
When asked about the disparity, company spokesman Anthony Hebron said: “Limited Brands is a mall-based company with stores located in top-tier malls and high customer traffic areas in Chicago.”
Developing models for risky neighborhoods may include coming up with new ways to train employees, advertise, control theft and accept credit cards for purchases, Rosenbaum said. “Very often these problems seem very foreboding.”
Instead, retailers use a “herd mentality,” locating their stores where others have created a “critical mass” of patrons, Melaniphy said. “So many stores like to be near a Wal-Mart or a Target even though they sell similar merchandise.”
But Saphir is among many middle-class African Americans starving for commercial development in gentrifying South Side neighborhoods like Douglas, Grand Boulevard, Kenwood, Oakland, Washington Park and Woodlawn.
On this particular day, Saphir is making her shopping road trip with two other South Siders, but sometimes the group includes more. Calling themselves the “Murray moms,” the women have mounted these excursions two to four times a month during the past year.
Saphir, a stay-at-home mom, pulls up to Murray Language Academy and walks Zoe inside. She returns to the car with Jill White, a 38-year-old educator and writer, who is white and lives in Hyde Park. Waiting in a nearby cul-de-sac is Conswaila Sydnor-Davis, a 34-year-old African American and former therapist, who operates a T-shirt company from her house down the block from Saphir.
The women take Saphir’s Chevy Venture. They stop near the area grocery store but head to the patisserie next door to buy croissants. It’s rare that they shop at the grocery---“where you get a box of cereal for $6, where you can get it for $3 anywhere else”---Saphir explains.
The women head north on Lake Shore Drive. Always looking for ways to save a few bucks, they talk about how to find inexpensive acting lessons for their children. Sydnor-Davis is paying $185 an acting session for her son. “I can teach him to act,” she says. “His mother is as dramatic as anyone else.”
“We pay $5,” Saphir says of the fee for her daughter’s acting lessons. “All summer long, it only cost $230.”
“Hey, Denzel [Washington] went to the Boys’ Club,” White adds as the group approaches McCormick Place. “He didn’t have a fancy acting school,”
Saphir retorts, “Unless you want him to do commercials, they can get all that for $5.”
The car’s speedometer reads 60 miles per hour as they zoom by a 40 mph speed limit sign near Navy Pier. In all, the drive spans more than 10 miles and takes the women through seven neighborhoods before exiting at North Avenue.
It’s 9:45 a.m., and the outline of neatly lined stores begins to emerge as the women get closer to their destinations. Each month, they make several stops at the Clybourn Galleria shopping center in Lincoln Park. White likes Whole Foods where she can get bulk nuts, yeast and spices. Saphir and Sydnor-Davis prefer Trader Joe’s, which offers affordable pre-packaged organic foods. On her last trip, Saphir set her sights on a TV tray at Crate and Barrel. She’s picking it up today.
The women envy the many North Siders within walking distance of these stores. According to the Reporter’s analysis, Kenwood has just one major retailer, a Walgreens. Lincoln Park has 50.
Approaching Trader Joe’s, White points to Sam’s Wines and Spirits. “Here’s one thing you don’t have to leave the South Side to buy.”
Every Sunday morning, in a quiet South Side block off 87th Street, Maria Scott waits for Todd, the newspaper carrier, to arrive. It’s her ritual. From 6:30 a.m. to 6:45 a.m., usually before jumping in the shower or eating breakfast, she’s peering out the window of her modest ranch home, past the Toyotas and Lexuses, waiting for the newspaper to be delivered.
When the Chicago Tribune arrives, Scott, 42, burns through the packaging to get to the flyers advertising stores nowhere near her Calumet Heights home. “Do they think we’re too poor that we won’t shop there?” said Scott, who owns and operates an industrial and residential cleaning service. “It’s black people that have money too, you know.”
Scott remembers when her “addiction” to shopping began. As a child, she and her mother would take a cab downtown every Wednes-day to meet her father for lunch at Ronny’s Steakhouse. On one such visit, it was her father’s payday---he was a carpenter helping to build the Sears Tower. After lunch, her mother deposited his check. But her mother set aside some money so they could shop at Marshall Field’s.
Scott maintains her penchant for the upscale store. This week, the store is advertising a cherry curio for $349. Scott’s not sure if it’ll fit in her living room and has to call the store for details. She’d rather see the scale for herself, but the nearest store is 40 minutes away at River Oaks Mall in south suburban Calumet City---even longer if she gets caught by the freight train crossing at 115th Street and Torrence Avenue.
When Scott does shop in her neighborhood, it’s usually at the Target on Cottage Grove near 87th Street. But, when it comes to dressing her family, she’s limited. There’s one neighborhood store where she says she can buy quality clothes. The last time she shopped there, she bought a pair of shoes, pants and a top. The bill came to $230. “I took [the items] back,” Scott said.
Not only do black neighborhoods feature far fewer clothing stores than white neighborhoods, but the shopping choices found in black areas often fail to stack up with more upscale stores found in white communities.
There are 46 apparel retailers in white neighborhoods, including the Gap, Banana Republic and Express. The most notable of six apparel stores in black neighborhoods is Marshall’s.
South Sider Denise McDuffie Martin, 48, regularly shops at Bloomingdale’s and Tiffany, and recently paid $5,000 to rent the Excalibur, a River North night club, for her daughter’s Sweet 16 birthday party of 150 guests. “A lot of banks are moving out to the South Side,” said Martin, a federal administrative law judge who lives in the Burnside neighborhood. “I think that shows they’re willing to move out to the customers. Hopefully, some of the stores will, too.”
While there is more concentrated wealth on the North Side, South Side residents spend billions of dollars each year---although much of it appears to be done outside of South Side neighborhoods.
According to the Reporter analysis, residents of the city’s white neighborhoods outside of the O’Hare community area log $8.2 billion in consumer spending with businesses in those neighborhoods raking in $8.6 billion in retail sales. The picture is much different in the city’s 27 black communities. In all, residents there spend $8.3 billion a year, but retail sales for businesses there stands at just $2.9 billion.
Retail “leakage” is the term retail insiders use for the difference between consumer spending and retail sales in a given community. It’s meant to measure what residents spend outside of their communities.
The sum of leakage costs for apparel and grocery items in black neighborhoods totaled more than $792 million for 2004. But, in white neighborhoods, businesses sold a combined $263 million more than neighborhood residents spent on apparel and grocery items. That’s because Saphir, White, Sydnor-Davis and others from other parts of the city frequently shop there.
After the “Murray moms” pull into a complimentary parking garage, they walk into Trader Joe’s grabbing crimson shopping carts.
Fifty-three minutes later, the women head to the checkout where a young brown-haired cashier asks where they’re from. Hyde Park, they tell him. “We see a lot of people from Hyde Park,” the cashier says.
http://www.chicagoreporter.com/2005/11-2005/retail/retail1.htm
