Analysis of the market for retail and office space in northampton-7-1985Li
AN ANALYSIS OF THE MARKET FOR RETAIL AND OFFICE SPACE
IN NORTHAMPTON, MASSACHUSETTS
Conducted For:
Northampton Institution for Savings
Northampton, Massachusetts
Conducted By:
The Research Group
Northampton, Massachusetts
July, 1985
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RENTAL STRUCTURE FOR RETAIL AND OFFICE SPACE a3
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TABLE OF CONTENTS
INTRODUCTION 3
METHODOLOGY
EXECUTIVE SUMMARY 5
DETAILED FINDINGS 8
POPULATION AND DEMOGRAPHIC TRENDS 9
Population Characteristics and Trends 10
Household Characteristics and Trends 11
Age Characteristics and Trends 12
Income Characteristics and Trends 1
Labor Force Characteristics and Trends 16
CHARACTERISTICS OF PEOPLE WHO SHOP IN NORTHAMPTON 17
Market Area for Goods and Services in Northampton 18
Demographic Characteristics of Northampton's Shoppers 22
Evaluations of Downtown Northampton as a Shopping Area 25
Reasons for Shopping in Downtown Northampton 27
CURRENT MARKET CONDITIONS IN NORTHAMPTON 29
Retail and Service Activity in Northampton 3
Number of Retail and Service Establishments 31
Retail and Service Spending Trends 3/
Leakage Analysis 38
SUPPLY OF AND DEMAND FOR RETAIL AND OFFICE SPACE IN NORTHAMPTON
The Research Group NIS Feasibility Study
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INTRODUCTION
The Northampton Institution for Savings (NIS) is considering developing
the James House building located at 42 Gothic Street in Northampton. At
present, James House contains a total of about 1,940 square feet of office
space, and a 970 square foot basement. NIS is considering a number of dif-
ferent development ideas for the building, including occupying the entire
1,940 square feet of space itself, or constructing various additions and reno-
vating the building to include Class A office space with carpeting, kitchens,
air conditioning, and an elevator.
Within the past five years, a number of commercial buildings have been
renovated or constructed. in Northampton, including such large -scale projects
as Roundhouse Plaza and Maplewood Shops on Conz Street, Old School Commons on
South Street, Potpourri Mall on King Street, and the old Gazette building on
Pleasant Street. In addition, a number of commercial buildings are being ex-
tensively renovated or constructed in the downtown area, including the renova-
tion of the Chardan Foods building on Market Street, the construction of a
building on Pleasant Street, and the construction of a building on Main Street
opposite the Post Office.
NIS is aware of the rapid commercial expansion in Northampton. Before
it proceeds with'development of James House, NIS needs to determine if there
is sufficient demand for commercial space in Northampton to warrant expansion
of the building. NIS is also interested in obtaining information that will
assist it in evaluating loan applications from people interested in business
expansion or development in Northampton. The overall purpose of the research
presented in this report is to determine: (1) the size and future growth po-
tential of the market for retail and office space in Northampton, and (2)
whether that market is large enough to support the additions proposed for
James House. The specific research objectives were to determine:
the existing supply of retail and office space in Northampton,
the vacancy rate for retail and office space in Northampton,
the square feet of additional retail and office space in Northamp-
ton,
the likely absorption rate for retail and office space in Northamp-
ton,
the rent structure for retail and office space in Northampton, and
the potential uses for the James House building.
The remaining sections of this report include a description of the
research methodology, a summary of findings and recommendations, and detailed
findings.
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METHODOLOGY
In order to meet the research objectives outlined above, The Research
Group analyzed population, demographic, and economic trends, data concerning
the rental market for retail and office space, and retail and commercial ac—
tivity in Northampton. Northampton was defined as sections the City of
Northampton excluding Florence and Leeds, including Main, King, Pleasant, and
adjacent streets (see Figure 1).
Demographic and population data were gathered from the 1970 and 1980
U.S. Census of Population, the Bureau of Labor Statistics, the Massachusetts
Division of Employment Security, and the Lower Pioneer Valley Regional Plan—
ning Authority. Information on employers was obtained from interviews with
personnel departments.
Data on shoppers in Northampton was obtained from The Research Group's
1985 Analysis of Retail Shoppers in Hampshire, Hampden, and Franklin Counties.
Sources for information on the number of retail and service establish—
ments and sales trends in Northampton include the 1977 and 1982 U.S. Census of
Retail Trade, the 1977 and 1982 U.S. Census of Service Industries, and the
Survey of Buying Power, Sales Marketing Management.
Northampton Assessor's records, an on —site survey of commercial build—
ings, interviews with building owners and managers, and a study conducted in
June by the Center for Economic Development at the University of Massachusetts
at Amherst were used to determine the supply of office and retail space in
Northampton. Data on rents for retail and office space were gathered from in—
terviews with local realtors, commercial building owners, and merchants.
Information on existing and future plans for commercial activity in
Northampton was gathered during in',:erviews with town officials, developers,
and area realtors.
The Research Group
NIS Feasibility Study Page a
EXECUTIVE SUMMARY
The results of this study indicate that Northampton has a healthy and
vital commercial district that has the potential to draw people from a wide
geographic area. The demand for retail and office space space appears to be
growing at a steady pace, although at present the supply of office space
exceeds current demand.
Northampton's population remained relatively stable between 1970 and
1980, with the only major demographic changes being an increase in the number
of households and a rapid increase in the number of 25 to 5 year -olds. As
this age group moves into its peak earning years, the demand for goods and
services in Northampton should increase. However, since the population as a
whole is projected to increase only minimally through 2000, any increase in
demand for goods and services will be largely due to Northampton's increasing
its share of the market for goods and services in the region.
Northampton currently draws people from throughout Hampshire, Hampden,
and Franklin Counties, although the majority of its shoppers are from
Northampton and nearby towns. People who shop in Northampton are most likely
to be younger, well- educated, affluent, professional baby -boom generation
adults. They are attracted to Northampton because they like the stores there,
they enjoy the shopping experience in Northampton, they are in the area for
other reasons (business, visiting friends, etc.), or they find Northampton to
be convenient for their shopping needs. They are an attractive group because
of their affluence and the fact that they are a growing population in
Northampton.
At present, Northampton is capturing a larger share of retail spending
than would be expected based on the earning power of its residents. Northamp-
ton accounts for approximately one -third of the total retail spending for
Hampshire County, with sales totalling more than $173 million. Retail spend-
ing in Hampshire County is predicted to increase in the future, and spending
in Northampton should increase accordingly.
An analysis of shopping patterns in the region indicates that while over
two- thirds of the residents of most towns in Hampshire County shop in
Northampton, only small proportions of the residents of Hampden and Franklin
Counties shop there. If Northampton is to grow beyond expected levels, the
city will need to concentrate its efforts on attracting people from the Green-
field and Springfield areas. Towns such as Longmeadow, East Longmeadow, and
Hampden have large populations of younger, well- educated, more affluent people
that Northampton has been particularly successful in attracting.
It is likely that Northampton will be most successful in attracting
shoppers from the Greenfield and Springfield areas if it concentrates on
developing its major area of strength, specialty goods. Many shoppers from
Hampden and Franklin Counties perceive downtown Northampton to have an incon-
venient location. However, shoppers are willing_ to travel greater distances
to buy specialty goods.
The Research Group
NIS Feasibility Study Page 5
In addition, between 1977 and 1982 Northampton experienced a decline in
retail sales that was largely due to losses in the shopping goods category.
Shopping goods are goods for which a comparison of price, variety, selection,
or quality is desired, and these goods typically are most successfully market—
ed in areas with large concentrations of similar stores, for example malls.
Downtowns are not able to compete effectively with malls for this category of
retail goods, and Northampton clearly lost sales for shopping goods to the
Hampshire and Ingleside Malls during that time period. Downtowns are able to
compete effectively in terms of specialty goods, however, and between 1977 and
1982 Northampton experienced increases in sales for this category.
Services are another area of strength for Northampton. Northampton ex—
perienced increases in sales for nearly all service categories reported in the
U.S. Census of Service Industries. In particular, the city does extremely well
in terms of legal services, which may be accounted for by the fact that
Northampton is the county seat. The fact that Northampton exceeds expected
sales for services, confirms that the city draws people from towns outside
Northampton.
At present, there are approximately 1.4 million square feet of retail
space available in Northampton. The vacancy rate for retail space is about
3.8 and retail space on Main Street is rarely vacant. Because of the lack
of undeveloped space on Main Street, major new retail construction will have
to occur in other areas of Northampton. However, retail space that is located
in areas with lower shopper traffic is more difficult to support than retail
space located on Main or its feeder streets. Any large —scale projects located
off Main Street would need to be evaluated extremely carefully in order to
determine how effective they will be in attracting people.
Rents for retail space in Northampton vary greatly depending upon loca—
tion. Rents range from $3'.00 to $30.00 per square foot, although the majority
of rents fall within the $14.00 to $17.00 per square foot on Main Street, and
$6.00 to $14.00 per square foot for non —Main Street locations.
The supply of office space in Northampton currently exceeds the demand
for that space. There are approximately 456,000 square feet of office space
in Northampton, of which approximately 23% is vacant. The high vacancy rate,
and the difficulty many realtors report in renting even high quality office
space, is the result of rapid development in the past few years that has
resulted in an oversupply. The vacant space is being absorbed, but not at a
rapid rate. It is not likely that the vacancy rate will drop below 10% within
the next two to three years.
The market for office space in Northampton has followed a cyclical pat—
tern in the past decade that has been observed both regionally and nationally.
As an economically depressed area begins to revitalize, the available office
space becomes .filled, and rents may increase dramatically as was the case in
Northampton two or three years ago. A great deal of excitement occurs over
the increases in demand for space, resulting in rapid development. A large
amount of space becomes available at once, exceeding the demand for that
space. Rents level off, and until the oversupply is filled, new space is not
absorbed quickly.
The Research Group
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Because Northampton is experiencing an oversupply of office space, we do
not recommend that NIS expand the James House property unless the space is
pre leased. If Northampton continues to experience growth in commercial ac-
tivity, however, the current oversupply should be absorbed and the demand for
additional space will increase. This is not likely to happen in the near
future, however.
Rents for office space range from about $3.50 to $22.00 per square foot,
with the majority of rents falling in the $8.00 to $10.00 per square foot
range.
Like Northampton, nearly all of the region's downtowns have undergone
periods of serious decline in the past several decades, from which they are
now trying to recover. Northampton has been unique in the area in terms of
its success in revitalizing, and the downtown draws people from throughout
Hampshire, Hampden, and Franklin Counties. If current revitalization efforts
in other towns, and in particular Springfield, are successful, then Northamp-
ton may begin to lose market share to other areas. Growth in Northampton will
depend upon the ability of businesses in the downtown area to to attract from
a wider geographic area, and to offer unique goods or services that are not
available in or similar to goods and services offered in other area downtowns.
In addition, it is important that the city, as well as individual
businesses, address the lack of parking in the downtown area. Although the
parking situation in Northampton is perceived as irritating, it is not at
present a major deterrent to shoppers. If Northampton continues to grow, how-
ever, then the lack of parking in the downtown area will become more serious.
Finally, in order for Northampton to significantly expand the share of
the market it attracts from Hampden and Franklin Counties, the downtown must
be open during the hours in which people from those areas shop. Since a high
proportion of the people that are most likely to be attracted to Northampton
live in two income families, shops in Northampton must consider being open
more evening and Sunday hours.
The Research Group
NIS Feasibility Study Page 7
The Research Group
DETAILED FINDINGS
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POPULATION AND DEMOGRAPHIC TRENDS
Population and demographic trends in the Northampton area were analyzed in
order to assess the potential effects of those changes on the demand for goods
and services in Northampton. Overall, there should be some increased demand
for goods and services caused by demographic shifts. While the population of
the region is only projected to grow at a slow rate, the proportion of the po—
pulation between the ages of 25 to 54 is growing rapidly. As members of this
age group move into their peak income years, their spending power will in—
crease, creating additional demand for goods and services.
Since the size of the population is not increasing at a significant
rate, however, Northampton businesses must capture a larger share of retail
and service spending in the region in order to grow significantly.
The Research Group
NIS Feasibility Study Page 9
The Research Group
Population Characteristics and Trends
Table 1 presents population trends and projections for Northampton, ad-
jacent towns, and Hampshire County. Between 1970 and 1980, the population of
Northampton declined by 4.3 from 29 to 29,286. Northampton's population
is currently estimated to be about 29,755, and despite recent declines, the
population is projected to increase to about 32,388 by 2000.
The decline in population in Northampton does not reflect population
trends in the region. The population of Hampshire County, for example, in-
creased by 12.0% between 1970 and 1980, from 123,981 to 138,813. The popula-
tion of Easthampton increased by 19.7% and the population of Hadley increased
by 12.6% during this time period. The current population of the county is es-
timated to be about 144,606, and is projected to reach 159,729 by 2000.
TABLE 1
POPULATION PROJECTIONS: 1970 TO 2000
Change:
1970 1980 '70 1985 1990 2000
NORTHAMPTON 29,664 29,286 1.3% 29,755 30,529 32,388
Easthampton 13,012 15,580 19.7% 16,172 16,641 17,229
Westhampton 793 1,137 43.4% 1,296 1,431 1,550
Williamsburg 2,342 2,237 4.5% 2,318 2,455 2,614
Hadley 3,750 4,222 12.6% 4,278 4,441 4,697
Amherst 26,331 33,229 2.6% 34,392 65,561 37,070
Hampshire County 123,981 138,813 12.0% 144,606 150,372 158,729
Source: The Research Group based on 1970 and 1980 U.S. Census of Population,
Lower Pioneer Valley Regional Planning Commission's 801 Program (Up-
dated in 1982), and Massachusetts Department of Public Health 1985
and 1990 Population Projections.
NIS Feasibility Study Page 10
Household Trends
While the population in Northampton decreased from 1970 to 1980, the
number of households increased by 19.2% during that time period, from 8,579 to
10,235 (see Table 2). This significant increase in the number of households
in an area with a relatively stable population size can be accounted for by a
decrease in household size. In 1970, the average number of persons per house—
hold in Northampton was 3.45 compared with 2.86 in 1980. The average house—
hold size in Northampton is lower than that for Hampshire County (3.14), but
is higher than for Massachusetts (2.82) and the nation (2.72
Northampton's decrease in household size parallels a nationwide trend
toward smaller households. This trend has resulted several factors, including
increases in household formation among younger, baby —boom generation adults,
increases in the rate of divorce, and decreases in the birth rate.
The Research Group
TABLE 2
HOUSEHOLD TRENDS: 1970 TO 1980
1970 Average 1980 Average
Number Size Number Size
Northampton 8,579 3.45 10,235 2.86
Hampshire County 33,819 3.66 44,253 3.14
Source: The Research Group based on 1970 and 1980 U.S. Census of Population.
NIS Feasibility Study Page 11
Age Characteristics and Trends
In 1980, about one -fifth (20.2 of the population of Northampton was
under the age of 18, about two- thirds (65.9 were between the ages of 18 and
64, and about one seventh (14.0 were over the age of 65 (see Table 3). The
age profile of Northampton is comparable to that of Hampshire County as a
whole.
There have been significant changes in the age profile of Northampton
since 1970. These changes reflect national and regional trends toward in-
creases in the population of younger, baby -boom generation adults (25 to 34-
year- olds). Specific changes that occurred in Northampton between 1970 and
1980 include:
a 20.8% decrease in the proportion of people under the age of 18,
to an 82.6% increase in the proportion of people between the ages of 25
and 34,
a 28.8% increase in the proportion of people between the ages of 45
to 54,
an 11.1% decrease in the proportion of people between the ages of 55
and 64.
The population of elderly remained relatively stable in Northampton
between 1970 and 1980, but increased by 17.5% in the county as a whole.
The Research Group NIS Feasibility Study
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Source: The Research Group based on 1970 and 1980 U.S. Census of Population.
The Research Group
Northampton
Under 18
18 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 and over
Hampshire County
Under 18
18 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 and over
TABLE 3
AGE TRENDS: 1970 TO 1980
1970 1980 Change:
Number Percent Number Percent '70 -'80
7489 25.2 5,928 20.2
5486 18.5 5702 19.5
2,981 10.0 5,443 18.6
2,782 9.4 2,653 9.1
3,650 12.3 2,599 8.9
3,225 10.9 2,867 9.8
4,051 13.7 4,094 14.0
34,553 27.9 30,133 21.7
28,085 22.6 34,095 24.6
13,360 10.8 23,573 17.0
11,753 9.5 13,216 9.5
13,825 11.1 11,509 8.
10,614 8.6 12,461 9.0
11,764 9.5 13,826 10.0
NIS Feasibility Study Page 13
-20.8
3.9
+82.6
4.6
+28.8
11.1
1.1
12.8
+21.4
+76.4
+12.4
-16.9
+17.4
+17.5
Income Trends
In 1980, the median household income for Northampton was $14,867, com—
pared with $16,675 for Hampshire County as a whole (see Table 4).
Northampton's large student population may account for the fact that both the
mean and median household income in Northampton are lower than in Hampshire
County as a whole, and that about one fourth (25.2 of Northampton's house—
holds had incomes below $7,500 in 1979.
Although students typically report having little or no earned income,
they do have large amounts of discretionary income that contributes to the
buying power of the regular wage— earners in Northampton and the region. A
1982 study conducted by Belden Associates of Dallas, Texas showed that, on
average, students spend about $244 per month above room, board and tuition,
and about 18% spend $400 or more per month. Based on these findings, we esti—
mate that Smith College students spend as much as $600,000 on goods and ser—
vices in the Northampton area per year.
Because of methodological changes instituted by the U.S. Census Bureau
in 1980, it is not possible to make household income comparisons between 1970
and 1980. However, a comparison of family income trends over that time period
indicates that the median for families in Northampton decreased by 5.2 when
the 1970 figures are adjusted for inflation ($20,156 to $19,101). The median
family income for Hampshire County decreased by 2.8% between 1970 and 1980
($20,812 to $20,230).
The Research Group NIS Feasibility Study
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TABLE 4
HOUSEHOLD INCOME: 1980
Northampton:
Less than $7,500
$7,500 to $10,000
$10,000 to $15,000
$15,000 to $25,000
$25,000 to $35,000
$35,000 to $50,000
$50,000 and over
Median income
Mean income
Hampshire County:
Less than $7,500
$7,500 to $10,000
$10,000 to $15,000
$15,000 to $25,000
$25,000 to $35,000
$35,000 to $50,000
$50,000 and over
Median income
Mean income
The Research Group NIS Feasibility Study
Number Percent
2,580 25.2
942 9.2
1,638 16.0
2,819 27.5
1,364 13.3
561 5.5
331 3.2
$14,867
$17,719
9,101 20.6
3,661 8.3
6,864 15.5
13,143 29.7
6,996 15.8
3,155 7.1
1,336 3.0
$16,675
$19,002
Source: The Research Group based on 1980 U.S. Census of Population.
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Labor Force Characteristics and Trends
Overall, there have been no significant changes in Northampton's labor
force, except for recent decreases in the rate of unemployment (see Table 5).
The 1980 U.S. Census of Population reported that more than two fifths
(44.5 of Northampton's labor force was employed in a professional or related
industry. Professional and related industries include hospitals and health
services, educational services, social and related services, legal services,
and engineering and other professional services. Another 16.0% of
Northampton's labor force was employed in retail trade, and 15.9% was employed
in manufacturing. Northampton's major industries educational, hospital
related, retail trade, and manufacturing -have not changed significantly since
1980.
About one fourth (29.4 of Northampton's labor force are employed in
professional or managerial occupations, and about one fourth are in sales or
clerical occupations. About one -fifth (19.1 are employed in service occupa-
tions, 12.7% are employed in unskilled or operative positions, and 9.5% are in
precision production occupations. Again, Northampton's labor force profile
does not appear to have changed significantly since 1980.
Since 1980, Northampton's unemployment rate has ranged from about 5.4%
to 7.9 Northampton's unemployment rate has generally been comparable to
that of Massachusetts as a whole, which in recent years has been lower than
the national rate.
Year
1980
1981
1982
1983
1984
The Research Group
LABOR FORCE TRENDS IN NORTHAMPTON: 1980 TO PRESENT
Labor Percent
Force Unemployed
14, 679
15,527
15,512
15,301
15,918
TABLE 5
5.2%
5.6%
6.9%
6.1%
4.4%
Source: The Research Group based on statistics provided by the Massachusetts
Division of Employment Security and the Bureau of Vital Statistics.
NIS Feasibility Study Page 16
CHARACTERISTICS OF PEOPLE WHO SHOP IN DOWNTOWN NORTHAMPTON
In order to assess whether Northampton is likely to be able to attract a
larger share of the market of retail and service spending in the region, an
analysis was conducted of the shopping behaviors of people in the region. The
results of this analysis indicated that Northampton has been very effective in
attracting shoppers from Hampshire County, and that those shoppers have very
positive attitudes toward Northampton, with the exception of their attitudes
toward parking in Northampton. Northampton may be near the saturation point,
however, in terms of its ability to increase its share of retail and service
spending in Hampshire County.
Hampden and Franklin Counties, however, offer great potential for the
future growth of Northampton, since Northampton currently attracts only a
small proportion of the shoppers from these areas. These shoppers currently
lack familiarity with Northampton, and perceive its location to be incon—
venient. In order for Northampton to attract shoppers from those areas,
Northampton must actively promote specialty goods to those shoppers, since
shoppers are willing to travel greater distances to purchase specialty goods.
In addition, stores in Northampton must be open convenient hours in order to
attract these shoppers, which may mean that stores would need to be open more
evening and Sunday hours.
The Research Group NIS Feasibility Study
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Market Area for Goods and Services in Northampton
Results from The Research Group's 1985 Survey of Retail Shoppers in
Hampshire, Hampden, and Franklin Counties were analyzed to determine the share
of shoppers in the three county area that currently shop in Northampton. The
survey focussed on holiday shopping behavior, and respondents were divided
into three groups:
INFREQUENT SHOPPERS people who have shopped in Northampton in the
past, but not during this past holiday season, and
NON- SHOPPERS people who have never shopped in Northampton.
The results of this survey indicate that about one -sixth (16.6 of the
people in the three county area shopped in Northampton in the 1984 holiday
season. About one- fourth (23.2 shop in Northampton infrequently, having
shopped in Northampton in the past, but not during the 1984 holiday season.
About one -half (54.3 have never shopped in downtown Northampton.
An analysis was conducted of market share data from in order to deter-
mine the geographic area from which Northampton draws the majority of its
shoppers. The results of this analysis indicate that although Northampton
draws shoppers from throughout the three county area, its primary market area
consists of Northampton, Amherst, Pelham, Belchertown, Deerfield, Easthampton,
Hadley, Holyoke, Hatfield, Southampton, Sunderland, Westhampton, Whately, and
Williamsburg (see Table 6). People who do not shop in Northampton are most
likely to live in the Springfield area, including Springfield, West. Spring-
field, Westfield, Ludlow, and Chicopee.
The Research Group
SHOPPERS people who shopped in Northampton this past holiday sea-
son,
NIS Feasibility Study Page 18
Infrequent Non
Town Shoppers Shoppers Shoppers Total
N= 147 N= 176 N= 400 N= 723
Agawam 0.0 3.7 6.9 4.7
Amherst Pelham 12.7 4.5 0.4 3.9
Belchertown 0.8 0.2 0.3 0.4
Chicopee 1.1 13.2 12.4 10.3
Deerfield- Sunderland 4.8 1.1 0.2 1.4
Easthampton 8.1 2.4 0.3 2.4
East Longmeadow 0.0 1.7 3.0 2.1
Greenfield 5.4 5.7 2.0 3.6
Hadley 3.1 0.3 0.0 0.7
Holyoke 14.1 5.9 7.4 8.4
Hatfield Whately 3.2 0.6 0.0 0.8
Longmeadow 1.0 4.1 2.5 2.6
Ludlow 0.0 1.8 4.7 3.1
Leverett Shutesbury 1.4 0.5 0.0 0.4
Montague 2.0 0.7 1.6
Northamptn 22.6 1.8 0.0 5.0
Southampton 2.0 0.9 0.1 0.7
South Hadley 3.3 4.2 1.8 2.7
Springfield 2.3 27.4 37.3 27.8
Southwick 0.0 0.0 2.2 1.2
Westfield 3.2 5.3 7.7 6.2
Westhampton 0.4 0.4 0.0 0.2
Wilbraham 0.0 1.5 2.7 1.9
Williamsburg 2.6 0.0 0.0 0.5
W. Springfield 2.4 7.1 5.4 5.2
Granby 0.3 1.1 1.0 0.9
Ashfield 1.0 0.3 0.0 0.3
Bernardston 0.4 1.0 0.1 0.4
Colrain 0.0 0.9 0.1 0.3
Northfield 0.3 0.6 0.4 0.4
Source: The Research Group's 1985 Survey of Retail Shoppers in Hampshire,
Hampden, and Franklin Counties.
The Research Group
TABLE 6
NORTHAMPTON'S MARKET SHARE OF RETAIL SHOPPERS BY TOWN
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In order to assess Northampton's growth potential from the towns in its
market area, an analysis was conducted of the percentage of shoppers from
specific towns that shopped in Northampton (see Table 7). This analysis indi—
cates that Northampton may be nearing the saturation point in terms of its
ability to increase sales from residents of Hampshire County.
As is indicated on Table 7, Northampton is currently attracting two
thirds or more of the shoppers from most of the towns in Hampshire County.
While Northampton could grow by capturing a larger percentage of the spending
of people who already shop here, it is unlikely that Northampton can attract a
larger percentage of the shoppers from these towns.
This analysis indicates that there is substantial room for growth from
shoppers in both Hamden and Franklin Counties, however. Currently, Holyoke is
the only Hampden County town from which Northampton is drawing more than a
small proportion of residents. Northampton attracts about one —third (34.3%)
of the shoppers who live in Holyoke. Northampton is attracting less than 10%
of the shoppers from the Hampden County towns of Chicopee (2.2 East Long—
meadow (0.0 Longmeadow (7.7 Springfield (1.7 and Wilbraham (0.0
Similarly, Northampton is attracting less than one —third (30.8 of the
shoppers from Greenfield.
Thus, Northampton could grow significantly by attracting a larger share
of the market from Hampden and Franklin Counties. In order to attract those
shoppers, however, a greater marketing effort would have to be targeted to
those shoppers, and stores would have to be open during times when it is most
convenient to shop. Increased evening and Sunday shopping hours may be neces—
sary to attract these shoppers.
The Research Group NIS Feasibility Study
Page 20
Town
TABLE 7
PERCENTAGE OF RESIDENTS OF SPECIFIC TOWNS WHO
SHOP IN NORTHAMPTON
Infrequent Non
Shoppers Shoppers Shoppers Total
Agawam 0.0 19.0 81.0- N= 34
Amherst Pelham 66.7 28.1 5.3 N= 28
Ashfield 75.0 25.0 0.0 N= 2
Belchertown 40.0 15.0 45.0 N= 3
Bernardston 20.0 60.0 20.0 N= 3
Chicopee 2.2 31.1 66.7 N= 75
Colrain 0.0 75.0 25.0 N= 2
Deerfield Sunderland 70.0 20.0 10.0 N= 10
Easthampton 68.4 23.7 7.9 N= 17
East Longmeadow 0.0 20.0 80.0 N= 15
Granby 7.7 30.8 61.5 N= 7
Greenfield 30.8 38.5 30.8 N= 26
Hadley 90.0 10.0 0.0 N= 5
Holyoke 34.3 17.1 48.6 N= 61
Hatfield Whately 81.8 18.2 0.0 N= 6
Longmeadow 7.7 38.5 53.8 N= 19
Ludlow 0.0 14.3 85.7 N= 22
Leverett Shutesbury 71.4 28.6 0.0 N= 3
Montague 30.4 26.1 N= 12
Northamptn 91.4 8.6 0.0 N= 36
Northfield 16.7 33.3 50.0 N= 3
Southampton 60.0 30.0 10.0 N= 5
South Hadley 25.0 37.5 37.5 N= 20
Springfield 1.7 24.0 74.4 N= 201
Southwick 0.0 0.0 100.0 N= 9
Westfield 10.3 20.7 69.0 N= 45
Westhampton 50.0 50.0 0.0 N= 1
Wilbraham 0.0 .20.0 80.0 N= 14
Williamsburg 100.0 0.0 0.0 N= 4
W. Springfield 9.5 33.3 57.1 N= 38
Total
20.3 24.3 55.3
Source: The Research Group's 1985 Survey of Retail Shoppers in Hampshire,
Hampden, and Franklin Counties.
The Research Group NIS Feasibility Study
Page 21
Demographic Characteristics of Northampton's Shoppers
An analysis was conducted of demographic information collected through
The Research Group's Survey of Retail Shoppers in Hampshire, Hampden, and
Franklin Counties (January, 1985) in order to determine the characteristics of
people who shop in downtown Northampton.
Overall, downtown Northampton attracts shoppers who are demographically
different from people who shop in other areas (see Table 8). Northampton at—
tracts younger, more well educated, more affluent professionals. People who
do not shop in Northampton, on the other hand, are older than shoppers and are
less educated and longer —term residents of the area.
In terms of age, over one —half (54.9 of Northampton's shoppers are
between the ages of 25 and 44, and their median age is 31.1. About one —third
(32.4 have children under the age of 18 living in their households, and the
majority (63.0 own their homes.
Northampton's shoppers are extremely well educated, with almost three
fourths (70.2 having attended college and about one —fifth (20.3 with ad—
vanced degrees. About one —half (54.4 are married, and about one— fourth
(26.7 are single. They'have lived in the area for a median of about 14.4
years, although 36.6% have lived in the area for 20 years or more. Almost
one —half (48.5 live in professional households where at least one adult
member is employed in a professional occupation, and almost two fifths (39.4
live in two wage— earner households. Their median household income for 1984 is
about $21,900, and about one fourth (24.7 have .household incomes over
$35,000 per year.
Infrequent shoppers (people who have shopped in Northampton in the past,
but not during the 1984 holiday season) resemble shoppers in most respects.
However, they are less likely than shoppers to have attained advanced degrees
(20.3% vs. 11.0 are more likely to have lived in the area for 20 or more
years (46.4% vs. 36.6 and have somewhat higher median household incomes
($23,821 vs. $21,901). They are also somewhat less likely than shoppers to
live in professional households (39.2% vs. 48.5
People who have never shopped in downtown Northampton are more likely
than shoppers to be over the age of 45 (46.9% vs. 34.7 are less educated
(median 12.7 vs. 14.4 years), are more likely to have lived in the area for 20
or more years (52.3% vs. 36.6 are more likely to be widowed (15.9% vs.
9.1 and are less likely to live in professional households (30.8% vs.
48.5 Non shoppers do not differ from shoppers in terms of income, working
status, homeownership, or presence of children.
The fact that Northampton is able to attract younger, more well
educated, more affluent shoppers indicates that Northampton should be able to
increase the share of the market it draws from Hampden County towns like Long
meadow, East Longmeadow, Wilbraham, and the more affluent sections of Spring—
field. However, specific efforts would need to be made to market Northampton
effectively to these potential shoppers.
The Research Group
NIS Feasibility Study Page 22
LI
The Research Group
TABLE 8
DEMOGRAPHIC CHARACTERISTICS OF PEOPLE
WHO SHOP IN DOWNTOWN NORTHAMPTON
Infrequent Non
Shoppers Shoppers Shoppers Total
Age N= 144 N= 169 N= 395 N= 708
18 to 24 10.3 5.6 10.5 9.3
25 to 34 32.3 25.3 24.7 26.4
35 to 44 22.6 28.2 17.8 21.3
45 to 54 14.8 8.5 11.6 11.5
55 to 64 9.0 19.8 18.3 16.8
65 and over 10.9 12.7 17.0 14.8
Median 31.1 32.9 33.6 32.9
Children In Household N= 147 N= 176 N= 400 N= 722
None 67.6 63.1 60.1 62,4
One 13.4 14.3 15.5 14.8
Two 11.4 17.8 13.2 13.9
Three 7.3 4.8 8.2 7.2
Four or more 0.3 0.0 3.0 1.7
Homeownership N= 143 N= 171 N= 394 N= 708
Own 63.0 67.0 65.8 65.5
Rent 37.0 33.0 34.2 34.5
Education N= 144 N= 171 N= 393 N= 709
Grade school 1.0 1.1 2.5 1.9
Some high school 3.3 2.1 12.3 8.0
High school diploma 25.5 26.6 44.7 36.4
Some college 21.3 32.2 18.0 22.1
College degree 28.6 27.0 15.6 21.0
Graduate degree 20.3 11.0 6.8 10.6
Median 14.4 13.8 12.7 13.8
Income N= 131 N= 148 N= 356 N= 635
0- $7,500 13.1 8.1 11.5 11.0
$7,500 to $10,000 7.0 8.6 10.5 0.4
$10,000 to $15,000 10.3 8.6 12.2 11.0
$15,000 to $25,000 28.4 28.0 29.1 28.7
$25,000 to $35,000 16.3 30.8 22.3 23.0
$35,000 to $50,000 17.4 13.5 10.6 13.2
$50,000 -and over 7.4 6.1 4 .6 6.7
Median $21,900 $23,821 $20, $21,
NIS Feasibility Study Page 23
Occupation N= 145 N= 170 N= 391 N= 706
Professional 35.1 27.2 19.4 24.5
Sales 5.5 5.9 5.6 5.7
Clerical 10.6 9.1 16.3 13.4
Skilled 0.9 3.8 3.6 3.1
Unskilled 1.8 0.6 3.1 2.2
Service 4.9 5.4 11.3 8.6
Unemployed 7.2 5.8 3.7 4.9
Housewife 11.6 17.9 13.0 13.9
Student 8.3 5.8 2.2 4.3
Retired 13.9 18.5 21.7 19.3
Spouse's occupation N= 104 N= 121 N= 264 N= 488
Professional 40.5 29.5 21.6 27.6
Sales 4.9 10.1 6.6 7.1
Clerical 6.4 0.4 7.4 5.4
Skilled 14.3 10.3 19.3 16.0
Unskilled 5.4 9.0 12.7 10.2
Service 4.0 6.2 a.5 4 .8
Unemployed 3.6 4.1 5.5 4.7
Housewife 0.5 2.2 2.7 2.1
Student 8.1 4.7 4.2 5.1
Retired 12.4 23.6 15.5 16.8
Marital Status N= 144 N= 174 N= 395 N= 712
Married 54.4 61.2 58.1 58.1
Single 26.7 18.7 18.9 20.4
Divorced separated 9.8 10.7 7.1 8.5
Widowed 9.1 9.5 15.9 13.0
Length of Residence
Less than 1 year
1 to 4 years
5 to 9 years
10 to 14 years
15 to 19 years
20 years or more
Working Status
1 person household
2 persons,2 working
2 persons, 1 working
2 persons, 0 working
N= 144 N= 173 N= 396 N= 713
8.6 4.0 5.7 5.9
25.1 15.9 13.5 16.4
11.2 18.8 14.3 14.7
10.4 9.9 9.2 9.6
8.3 5.0 5.0 5.7
36 46.4 52.3 47.7
N= 147 N= 176 N= 400 N= 723
29.2 30.9 32.3 31.3
39.4 27.8 34.1 33.6
19.1 21.3 20.9 20.7
12.3 20.1 12.7 14.4
Professionals in Household N= 147 N= 176 N= 400 N= 723
None 51.5 60.8 69.2 63.6
One or more 48.5 39.2 30.8 36.a
Source: The Research Group's 1985 Survey of Retail Shoppers in Hampshire,
Hampden, and Franklin Counties.
The Research Group
NIS Feasibility Study Page 24
Evaluations of Downtown Northampton as a Shopping Area
People who shop in downtown Northampton were asked to evaluate Northamp-
ton and other downtown areas in Hampshire and Hampden Counties on the follow-
ing criteria: convenience of location, availability of parking, variety and
selection of merchandise, and value for money. Again, shoppers were divided
into three categories based on their frequency of shopping in Northampton dur-
ing the past holiday season. Infrequent shoppers and non shoppers were not
asked to rate the downtown area in terms of variety and selection or value for
money.
In terms of location, the vast majority (87.8 of Northampton's
shoppers feel that Northampton is conveniently located (see Table 9). Infre-
quent shoppers and non- shoppers are significantly less likely to find
Northampton's location to be convenient (30.3% and 4.3 respectively). This
is primarily due to the fact that infrequent and non shoppers live further
away from Northampton than do shoppers.
Northampton is also rated highly among shoppers in terms of variety and
selection of merchandise and value for money. The majority of people rated
Northampton as excellent or good for these criteria (78.2% and 63.9%, respec-
tively). People who have not shopped in Northampton recently are significant-
ly less likely to know how Northampton: rates for these criteria, although
those who are able to rate Northampton for these criteria rate it highly.
Northampton is rated significantly less positively in terms of parking.
Almost two- thirds (62.2 of people who shopped in Northampton during the
holiday season rated it as fair or poor in terms of parking. People who shop
there less frequently are less likely to know how to rate Northampton on this
criteria. However, infrequent and non shoppers who do rate Northampton in
terms of parking are most likely to rate it as fair or poor.
The Research. Group
NIS Feasibility Study Page 25
Criteria
EVALUATIONS OF DOWNTOWN NORTHAMPTON AS A SHOPPING AREA
Convenience of Location N= 147
Very convenient 50.6
Somewhat convenient 37.2
Somewhat inconvenient 11.0
Very inconvenient 1.1
Don't know 0.0
Availability of Parking N= 147
Excellent 7.4
Good 27.2
Fair 37.9
Poor 24.3
Don't know 3.3
Variety and Selection
of Merchandise
Excellent
Good
Fair
Poor
Don't know
Value for Money
Excellent
Good
Fair
Poor
Don't know
Not asked.
Infrequent Non
Shoppers Shoppers Shoppers Total
N= 147
25.8
52.4
17.5
1.4
3.0
N= 147
14.5
49.4
27.0
6.1
3.0
TABLE 9
N= 175
9.9
21.4
32.5
35.8
0.3
N= 173
1.9
19.5
33.3
24.3
21.1
N= 173
15.6
40.2
14.3
3.0
27.0
N= 173
5.4
38.0
23.2
0.8
32.6
The Research Group NIS Feasibility Study
N= 400
1.0
3.3
14.9
74.0
6.8
N= 397
0.0
3.8
10.3
13:4
72.5
N= 722
13.3
14.6
18.4
R9.9
3.8
N= 717
2.0
12.4
21.5
18.2
45.9
N= 320
20.3
4 5.8
15.7
2.2
15.9
N= 320
9.6
43.2
2
3.3
19.0
Source: The Research Group's 1985 Survey of Retail Shoppers in Hampshire,
Hampden, and Franklin Counties.
Page 26
Reasons for Shopping in Downtown Northampton
Respondents to the 1985 Survey of Retail Shoppers in Hampshire, Hampden,
and Franklin Counties were asked why they shop or do not shop in Northampton
(see Table 10).
People who shop in Northampton do so because they find the location to
be convenient to home (19.7 they are in the area for other reasons (12.4
they like the stores in the downtown area (10.6 or they find shopping in
Northampton to be a positive experience because they are able to get good
buys, they like the selection or variety of merchandise available, or they
like the sales (10.3 and 7.8% were trying Northampton for the first time.
The small proportion of people who said they shopped in Northampton this
season, but less than last season did so because of parking problems (17.2
because they prefer malls (15.5 or because they shopped less in general
(8.5
The major reasons for not shopping in Northampton during holidays in-
clude finding the location to be inconvenient (55.1 preferring malls
(6.2 and having no reason to go there (5.7 Major reasons for not shop-
ping in Northampton during the most recent holiday season include inconvenient
location (21.1 having no time (13.5 not being in the area (10.0 tran-
sportation problems (8.8 and shopping less in general (6.8
The major reason for never shopping in Northampton is that Northampton
is .inconveniently located (61.9 (see Table 10). This finding is not
surprising since non shoppers are likely to live in areas that are some dis-
tance from Northampton, or in areas that are closer to other downtown shopping
areas such as Springfield or Greenfield. Other reasons for not shopping in
Northampton include lack of familiarity with the area (10.6 no reason to go
there (6. transportation problems (5.4 or never being in the area
(5.2
In order for Northampton to increase its share of the market of shoppers
that live further away from Northampton, it must overcome the current percep-
tion that it is inconviently located. Northampton could do this by promoting
specialty goods to those shoppers, since convenience of location is generally
less important to people who are interested in specialty goods. These people
are willing to travel greater distances in order to acquire goods that they
perceive to be unique.
The Research Group
NIS Feasibility Study Page 27
MAJOR REASONS FOR SHOPPING IN DOWNTOWN NORTHAMPTON
Major Reasons Shopped In
Northampton More —The Same
Like stores.
Location convenient to home
Positive shopping experience
In area for other reasons
First time there
Major Reasons Shopped Less
In Northampton During Holidays N= 18
Parking Problems 17.2
Prefer malls 15.5
Shopped elsewhere 5.7
Needs met locally 5.8
Shopped less in general 8.5
Major Reasons Never Shops In
Northampton During Holidays
Inconvenient location
Prefer malls
No reason to go there
Major Reasons Didn't Shop
In Northampton This Season
Inconvenient location
No time
Transportation problems
Was not in area
No reason to go there
Shopped less in general
Major Reasons Never
Shops In Northampton
Inconvenient location
Not familiar with area
No reason to go there
Transportation problems
Never in area
Not asked.
TABLE 10
The Research Group NIS Feasibility Study
Infrequent Non
Shoppers Shoppers Shoppers
N= 120
10.6
19.7
10.3
12.4
7.8
N= 112
55.1
6.2
5.7
N= 56
21.1
13.5
8.8
10.0
5.3
6.8
N= 392
61.9%
10.6
6.4
5.4
5.2
Source: The Research Group's 1985 Survey of Retail Shoppers in Hampshire,
Hampden, and Franklin Counties.
Page 28
r
The Research Group
CURRENT MARKET CONDITIONS IN NORTHAMPTON
An analysis of retail and service spending trends was conducted in order
to determine the share of the market that Northampton is attracting. The
results of this analysis indicate that there have been declines both in the
number of retail and service establishments in Northampton, and in their sales
in adjusted dollars between 1977 and 1982.
Despite these declines, Northampton attracts a disproportionate share of
the retail and service spending in Hampshire County. Northampton is attract—
ing approximately $70 million more in retail spending than would be expected
based upon the population and aggregate income of Northampton.
Northampton's strengths are in attracting dollars for convenience goods,
specialty goods, and services. Specific areas in which Northampton gained
market share between 1977 and 1982 are eating and drinking establishments,
drug and proprietary stores, specialty goods, and services. These all
represent types of businesses that traditionally do well in downtown settings.
Northampton generally lost market share, however, for comparison shopping
goods, which typically do better in malls.
NIS Feasibility Study Page 29
The Research Group
Retail and Service Activity in Northampton
The Census of Retail Trade and the Census of Service Industries were
used as a means of estimating the number of commercial businesses in Northamp—
ton and sales trends for those businesses. Statistics in the Census of Retail
Trade and Census of Service Industries are broken down by SIC (Standard Indus—
trial Classification) codes. Each type of retail or service business is as—
signed an SIC code -for example, "building materials and hardware" is classi—
fied as SIC 5u. The most recent data available is from 1982, and includes all
establishments in Northampton including Florence and Leeds. It is important
to note that neither Census includes all types of retail or service
businesses. For example, data on banking, insurance, or personal service
businesses such as hairdressers is not included in either Census.
In this report, the different SIC categories of retail businesses have
been grouped according to the type of goods sold, including convenience goods,
comparison shopping goods, specialty goods, and all other goods.
Convenience goods are goods for which convenience of location is the
most important criterion in terms of use. Examples of convenience goods are
food stores, drug stores, and eating and drinking establishments. Comparison
shopping goods are goods for which a comparison of price, variety, selection,
or quality is desired. Examples would include clothing stores and large
department stores. For these goods, consumers are likely to be attracted to
areas where a larger number of stores are located, such as a mall.
Specialty goods are goods that are bought without regard to price,
variety or selection and that are unique in some manner. Most specialty goods
stores fall within the miscellaneous retail category and include sporting
goods, book, stationery, jewelry, hobby, toy, and game, camera and photograph—
ic supply, gift, novelty, and souvenir, luggage and leather .goods, sewing,
needlework, and piece goods stores and mail houses. The "all other goods"
category includes automotive dealers, building materials, hardware, garden
supply, mobile home dealers, and retail nurseries, and gasoline service sta—
tions.
Service businesses include hotels, motels, and camps, automotive repair,
miscellaneous repair, amusement and recreation, legal services, and health
services (excluding hospitals).
In the following section, the number of retail and service businesses in
Northampton is discussed.
NIS Feasibility Study
Page 30
r
The Research. Group
Number of Retail and Service Establishments
Overall, between 1977 and 1982 the number of retail establishments in
Northampton declined by 17.8 from 320 to 263 (see Table 11). The declines
were primarily within the shopping and specialty goods categories, with the
number of convenience goods and other stores remaining essentially stable dur-
ing that time period.
About two fifths (100) of Northampton's retail businesses fall within
the convenience goods category. In 1982 there were 29 food stores, 60 eating
and drinking establishments, and 11 drug and proprietary stores.
Convenience goods typically do well in downtown areas, because downtowns
are more conveniently located than malls or other retail locations. Thus it
is not surprising that although Northampton experienced a decline in the total
number of retail establishments between 1977 and 1982, the number of conveni-
ence goods stores remained stable during that time period. There was an in-
crease in the number of eating and drinking establishments +9.0 a decrease
in the number of drug and proprietary stores 15.3 and the number of food
stores did not change between 1977 and 1982.
About one -fifth (19.4 of Northampton's retail establishments are com-
parison shopping goods stores. In 1982, there were 7 general merchandise
stores, 24 apparel and accessory stores, and 20 furniture and home supply
stores.
Downtowns generally have a great deal of difficulty competing with malls
in terms of comparison shopping goods. Consumers want a comparison of price,
variety, selection, or quality for these goods, and malls are able to concen-
trate larger numbers of similar types of stores into a small area than are
downtowns. The opening of the Mountain Farms Mall and later the Hampshire
Mall in Hadley and the Holyoke Mall at Ingleside during the 1970's have had a
profound impact on downtowns in Hampshire and Hampden Counties. Between 1977
and 1982, Northampton experienced a 33.8% decline in the number of shopping
goods stores, with the largest decline occurring in general merchandise
38.5 followed by apparel and accessory 31.4 and furniture and home
supplies 31.0
About one fourth (25.1 of Northampton's retail establishments are
specialty goods stores. Northampton experienced a 29.8% decline in the number
of specialty goods or miscellanous retail stores between 1977 and 1982. In
1977 there were 94 of these stores, compared with 66 in 1982. Since 1982,
however, the number of miscellaneous retail stores has increased as existing
retail space on Main and Pleasant Streets has been filled and as newly con-
structed retail space in areas such as Damon Road, the Potpourri Mall on King
Street, Roundhouse Plaza, and the Old School Commons has became available.
NIS Feasibility Study
Page 31
The remaining 17.5% of. Northampton's retail stores fall within the all
other goods category, including 10 building materials and hardware stores, 15
auto dealers, and 20 gasoline service stations. The number of auto dealers
declined by 31.8 the number of service stations increased by 5.3 and the
number of building materials and hardware stores remained the same between
1977 and 1982.
In terms of services, in 1982 there were 4 hotels, motels, or other
lodging places, 19 auto repair services, 9 amusement and recreation establish—
ments, 25 legal services, and 67 health services (excluding Cooley Dickinson
Hospital and the Veteran's Hospital in Leeds). Data on miscellaneous repair
services is not available from the 1982 Census, however in 1977 there were 18.
Between 1977 and 1982, the number of hotels, motels, and other lodging
places decreased by 42.8 automotive repair services decreased by 36.7
amusement and recreation establishments decreased by 70.9 and legal services
decreased by 34.2 Trend data for miscellaneous repair services and health
services is not available because of Census reporting changes.
Changes in the number of establishments in an area provides some indica—
tion of the strengths or weaknesses of a shopping area. However, changes in
retail and services sales more accurately indicate wheter an area is growing
or declining. Changes in Northampton's retail and service sales are discussed
in the following section.
The Research Group NIS Feasibility Study
Page 32
The Research Group
TABLE 11
NUMBER OF RETAIL AND SERVICE ESTABLISHMENTS
IN NORTHAMPTON: 1977 TO 1982
SIC Category
Percent
Change:
1977 1982 '77 -'82
Convenience Goods
54- -Food stores 29 29 0.0
58 Eating- drinking 55 60 9.0
591 Drug proprietary 13 11 -15.3
Shopping Goods
53 General merchandise 13 7 -38.5
56-- Apparel accessory 35 24 -31.4
57 Furniture -home supply 29 20 -31.0
Specialty Goods
59-- Miscellaneous retail 94 66 -29.8
All Other Goods
52-- Building materials 11 11 0
55 Automotive dealers 22 15 -31.8
554 Service stations 19 20 5.3
Service Establishments
701 -3 Hotels lodging 7 4 -42.8
75-- Automotive repair 30 19 -36.7
76-- Miscellaneous repair 18
78-9-- Amusement recreation 31 9 -70.9
81- -Legal services 38 25 -34.2
80 Health services 67
Not available.
Miscellaneous repair includes liquor, used merchandise, sporting goods,
book, stationery, jewelry, hobby, toy, and game, camera and photographic
supply, gift, novelty, and souvenir, luggage and leather goods, sewing,
needlework, and piece goods stores and mail houses.
Excluding hospitals.
Source: The Research Group based on 1977 and 1982 U.S. Census of Retail Trade
and 1977 and 1982 U.S. Census of Service Industries.
NIS Feasibility Study Page 33
Table 12 presents retail and service sales for Northampton from 1977 to
1982. 1977 figures have been adjusted for inflation using Consumer Price In—
dex adjustment factors, thus all figures are reported in 1982 dollars.
Northampton accounts for approximately one —third (35.5 of the total
retail spending for Hampshire County, with 1982 retail sales of more than $173
million. Sales for Hampshire County in 1982 were about $188 million.
Between 1977 and 1982, total retail sales in Northampton declined by
about 11.2 from about $202,382,000 to $173,576,000 Sales in Hampshire County
declined at a somewhat slower rate 6.9 During that time, the country was
experiencing an economic recession, and although Northampton fared better than
many of the region's downtowns, it was not immune. Since the early 1980's,
however, Northampton has revived to become one of the most vital downtowns in
the Pioneer Valley.
Despite overall declines in retail sales between 1977 and 1982,
Northampton experienced surprisingly large increases in spending for a number
of retail categories. In terms of convenience goods, sales for eating and
drinking establishments more than tripled +350.5 end sales for drug and
proprietary stores more than doubled +211.5 from 1977 to 1982. Sales in
these categories in Hampshire County increased only minimally during that time
period (3.7% and 3.2 respectively).
Sales for food stores in Northampton, however, declined by 20.7% from
1977 to 1982, while in the county as a whole they declined by only 1.5 His—
torically, Northampton served as the marketing hub of Hampshire County for
food stores, attracting shoppers from a wide geographic area. Within the past
decade, however, a number of supermarkets have located or upgraded in towns
surrounding Northampton, including Big Y in Easthampton :nd Super Stop Shop,
Price Chopper, and Bread Circus in Hadley. In addition, smaller supermark—
ets in the region have expanded in size or added new departments. The overall
effect has been to decentralize food shopping activity in the county.
Shoppers from more rural areas such as Sunderland and Deerfield, who would
traditionally have come to Northampton, are now shopping closer to home.
Sales trends for shopping goods clearly reflect the negative effect that
area malls have had on retail spending in Northampton. Sales for general mer—
chandise stores declined in Northampton by over one —half 51.1 between 1977
and 1982. Sales for general merchandise stores declined at a slower rate in
the county as a whole 36.3 This may be explained by the 5.1% increase in
spending for this category in the "balance of the county," which includes Had—
ley (site of the Hampshire Mall) but not Northampton, Easthampton, Amherst, or
South Hadley. Sales figures for apparel and accessory stores for Northampton
for 1977 are not available, but since 11 apparel and accessory stores went out
of business in Northampton between 1977 and 1982, it is likely that sales
trends for that time period reflected those of the county as a whole 17.8
The Research. Group
Retail and Service Spending Trends
NIS Feasibility Study
Page 34
Furniture stores, on the other hand, have done extremely -well in
Northampton since 1977. Although the number of furniture and home supply
stores declined by 9, sales increased by 124.1% during that time period.
Sales for this category in Hampshire County decreased by 12.6% from 1977 to
1982. Stores such as Carry —Outs, Contemporary Trends, and other specialty and
unique furniture —home supply stores have contributed to Northampton's success
in this category.
Sales for specialty goods or miscellaneous retail also increased in
Northampton between 1977 and 1982. Although the number of stores decreased by
28, spending for this category increased by 90.1% during that time period.
Specialty goods are an area for which downtowns can compete effectively with
malls, because for these goods, a comparison of price or selection is not
desired and people are willing to travel in order to buy goods that they per—
ceive as unique or prestigious. In addition, the ambiance or image of a down—
town area can attract shoppers who are more interested in a positive shopping
experience than in comparing prices, selection, or variety.
Service sales in Northampton generally increased between 1977 and 1982.
Overall comparisons of service sales are not available for 1977 through 1982
because of changes in Census reporting, however sales for hotels, motels, and
other lodging places declined by 34.6% and sales for automotive repair ser—
vices declined by 12..4 In the county, sales for hotels, motels, and other
lodging places declined by 34.6 and for automotive repair services by 31.0
Although figures for Northampton are not available for miscellaneous repair,
sales for this category in Hampshire County almost.doubled +97.8 Sales
for amusement and recreation more than quadrupled in the county (+44 but
again, data for Northampton is not available.
Sales for legal services increased by 9.4% in Northampton between 1977
and 1982. Data for the county is not available. The fact that Northampton is
the county seat accounts for its success in this category.
The Research Group
NIS Feasibility Study
Page 35
Northampton: Hampshire County:
1977 1982 Change: 1977 1982 Change:
SIC Category Sales Sales '77 -'82 Sales Sales '77 -'82
Convenience Goods
54- -Food stores 48,586 38,505 20.7% 134,107 128,043 4.5%
58 Eating- drinking 4,516 20,341 +350.5 55,879 57,924 3.7
591 Drug proprietary 1,964 6,176 +214.5 15,821 16,319 3.2
Shopping Goods
53 General merchandise 22,166 10,103 54.4 4 2,954 27,348 36.3
56 Apparel- accessory 7,568 26,327 21,637 17.8
57-- Furniture-
home supply 1,903 4,265 +124.1 14,386 12,571 12.6
Specialty Goods
59-- Miscellaneous
retail 12,973 24,663 90.1 82,861 72,980 11.9
All Other Goods
52 Building materials
55 Automotive dealers
554 Service stations
Total: Retail Sales
Service Establishments
The Research Group
TABLE 12
RETAIL AND SERVICE SPENDING TRENDS: 1977 TO 1982
NORTHAMPTON AND HAMPSHIRE COUNTY
6,590 28,839 24,859 13.8
18,433 35,723 93.8 78,323 63,195 19.3
5,357 17,273 +222.5 45, 51,858 14.2
202,382 173,576 14.2 524,907 4 88,603 6.9
701 -3 Hotels lodging 4,818 3,152 34.6 8,632 6,226 27.9
75 Automotive repair 5,266 4,615 12.4 15,337 10,581 31.0
76-- Miscellaneous repair 3,140 6,211 97.8
78-9-- Amusement-
recreation 1,259 6,028 32,809 +4ll4.3
81- -Legal services 3,105 3,395 9.3 5,721
80-- Health services 17,104 32,809
Not available.
-In 1982 dollars.
Miscellaneous repair includes liquor, used merchandise, sporting goods,
book, stationery, jewelry, hobby, toy, and game, camera and photographic
supply, gift, novelty, and souvenir, luggage and leather goods, sewing,
needlework, and piece goods stores and mail houses.
Excluding hospitals.
Source: The Research Group based on 1977 and 1982 U.S. Census of Retail
Trade, 1977 and 1982 U.S. Census of Service Industries, 1980 U.S.
Census of Population.
NIS Feasibility Study Page 36
A leakage analysis was conducted to determine the extent to which
Northampton is capturing its share of the total retail and service spending in
Hampshire County. Overall, the aggregate income of residents of Northampton
makes up about 20.6% of the total aggregate income of Hampshire County. If
Northampton is capturing a representative share of its residents' expendable
income, it should capture about 20.6% of the county's total retail and service
sales. The difference between potential sales (sales estimates based on an
area's population) and actual sales represents the amount of money that is ei-
ther coming into or leaking out of an area.
The results of this analysis indicate that Northampton is clearly cap-
turing a larger share of the county's retail and service spending than would
be expected based on its population (see Table 13). Potential retail sales
for Northampton for 1982 totalled approximately $100,652,000, while actual
sales for 1982 totalled about $173,576,000. The more than $70 million differ-
ence between potential and actual retail sales in Northampton represent the
dollars spent by shoppers that are attracted to Northampton from throughout
the region.
In addition, Northampton exceeded its expected potential sales for all
of the different SIC categories examined. This indicates that although
Northampton is losing market share of spending for shopping goods to area
malls, the city is still capturing a greater share of spending for this
category than would be expected.
The Research Group
Leakage Analysis of Retail and Service Spending
It is not possible to quantify the extent to which Northampton has ex-
ceeded expected service sales, because changes in Census reporting have elim-
inated some categories of businesses and added others. However, Northampton
consistently exceeded its expected potential sales for all the SIC categories
examined.
NIS Feasibility Study Page 38
LEAKAGE ANALYSIS OF RETAIL AND SERVICE SPENDING IN NORTHAMPTON
(All Figures in $1,000's)
SIC Category
Convenience Goods
54- -Food stores 26,377 38,505
58 Eating- drinking 11,932 20,341
591 Drug proprietary 3,362 6,176
Shopping Goods
53-- General merchandise 5,634 10,103
56-- Apparel- accessory 4,457 7,568
57 Furniture -home supply 2,590 4,265
Specialty Goods
59-- Miscellaneous retail 15,034 24,663
All Other Goods
52 Building materials 5,121 6,590
55 Automotive dealers 13,018 35,723
554 Service stations 10,683 17,273
Total: Retail Sales 100,652• 173,576
Service Establishments
Not available.
Source: The Research Group based on 1977 and 1982 U.S. Census of Retail
Trade, 1977 and 1982 U.S. Census of Service Industries, Sales Mark-
eting Management's 1984 Survey of Buying Power (Parts 1 and 2), and
1980 U.S. Census of Population.
The Research Group
TABLE 13
701 -3 Hotels- lodging 1,283
75-- Automotive repair 2,180
76-- Miscellaneous repair 1,279
78 -9 Amusement recreation 6,759
81- -Legal services 1,179
80 Health services 6,758
Potential Actual
1982 Sales 1982 Sales
3,152
4,615
3, 395
17,104
NIS Feasibility Study Page 39
SUPPLY OF AND DEMAND FOR RETAIL AND OFFICE SPACE IN NORTHAMPTON
An on —site survey of commercial buildings in the downtown area was con—
ducted in order to estimate the current supply of retail and office space in
the major commercial sections of Northampton. Data from the survey was com—
bined with data from assessor's records and information from local realtors,
building owners, the Northampton Redevelopment Authority, and the Center for
Economic Development at the University of Massachusetts at Amherst. The major
commercial sections of Northampton were defined as Main, Pleasant, King, Mark—
et, Hawley, Pearl, Center, Gothic, Masonic, State, Old South, and Conz Streets
and Crafts Avenue. Florence and Leeds were not included in the study.
There are currently approximately 1,416,764 square feet of commercial
space available in Northampton, of which 1,313,324 square feet is retail space
(see Table 14). The vast majority (91.9 of Northampton's retail space is
first floor storefront space, 6.2% is second floor space, and the remainder is
basement and third floor space. Approximately 23,500 square feet of addition—
al retail space is being constructed in various locations in the downtown
area.
About 50,800 square feet of Northampton's retail space is vacant, for an
overall vacancy rate of about 3.8 The vacancy rate for Main Street retail
space, however, is less than 1.0 Retail space located on Main Street is in
high demand and is absorbed extremely quickly, usually within one to three
weeks of vacancy. Retail space located on King and Pleasant Streets is ab—
sorbed more slowly, usually within one to six months of vacancy. Absorption
of retail space in other areas of Northampton varies depending upon the dis—
tance from Main Street, the quality of the space, shopper traffic, and parking
availability. Overall, about 30,500 square feet of new retail space has been
absorbed in Northampton within the past year.
Sales Marketing Ma'agement projects a 9.4% increase in retail sales
per year through 1988 for Hampshire County. If similar trends occur in
Northampton, we predict that a maximum of about 35,000 square feet of retail
space could potentially be absorbed in Northampton per year through 1988.
About 456,149 square feet of Northampton's commercial space is office
space. The majority (70.9 of office space in Northampton is second floor
space, 38.0% is first floor space, 8.2% is third floor space, and the
remainder is basement or fourth or fifth floor space.
At present, the supply of office space in Northampton exceeds the demand
for that space. A large amount of new or extensively renovated office space
has been added to Northampton's supply within the past five years, including
office space in the Roundhouse Plaza, Old School Commons, a number of build—
ings on Main and Pleasant Streets, and the. Potpourri Mall on King Street. The
result of this rapid development has been extremely high vacancy rates.
The Research Group
NIS Feasibility Study Page 40
�r
At present, about 103,4 square feet of Northampton's office space is
vacant, for an overall vacancy rate of about 22.6 The vacancy rate for
second floor space is about 34.3 for third floor space is 52.6 and for
fourth floor space is 621.5 Since first floor vacant space has been defined
as retail space, the 0.0% vacancy rate for first floor office space is
misleading. Newly renovated, elevator accessible office space on the first or
second floor with readily available parking is in highest demand and is least
likely to be vacant.
Approximately 17,20 square feet of new office space has been absorbed
in Northampton in the past year. This does not include office space that al—
ready existed (was not newly constructed or renovated) and was absorbed. It
is likely that the current oversupply of office space will be absorbed within
the next five years, if no new large scale office projects are begun.
Northampton also has approximately 30,295 square feet of space that
could be used as retail or office space but is currently underutilized (used
for storage or boarded up). This space was not included in the vacancy rate
because it would need to be renovated prior to occupancy.
The Research Group
NIS Feasibility Study Page 41
L J
Floor
Total
The Research Group
TABLE 14
ESTIMATED SQUARE FEET OF RETAIL AND OFFICE SPACE
IN NORTHAMPTON, MASSACHUSETTS
S.F. Retail S.F. Office
Retail Vacancy Office Vacancy
Space Rate Space Rate
Basement 23,803 0.0% 750 0.0%
First Floor 1,207,341 4.2% 173,474 0.0%
Second Floor 81,028 0.0% 232,642 34.3%
Third Floor 1,152 0.0% 37,499 52.6%
Fourth Floor 0 5,576 64.5%
Fifth Floor 0 6,208 0.0%
1,313,324 3.8% 456,149 22.6%
Source: The Research Group based on an on —site survey of commercial buildings
in downtown Northampton, assessor's records, and information from lo—
cal realtors and building owners.
NIS Feasibility Study
Page 42
j
fl
!_1
RENTAL STRUCTURE FOR RETAIL AND OFFICE SPACE IN NORTHAMPTON
An analysis was conducted of the rental structure for retail and office
space in Northampton. Interviews were conducted with realtors in the area
that handle commercial space rentals and with building owners and developers
in Northampton.
Rents for retail space in Northampton have increased significantly in
the past five years. In 1981, average rents for retail space ranged from
$5.00 to $8.00 per square foot, and in 1983 they ranged from $10.00 to $12.00
per square foot. At present, average rents for retail space in Northampton
range from $10.00 to $15.00, with rents as high as $22.00 per square foot oc—
curring along Main Street.
Rents for retail space in Northampton are more likely than rents for of—
fice space to vary widely depending upon the perceived desireability of loca—
tion. In general, the further from Main Street a retail space is located, the
lower the rent. Specifically:
rents for first floor retail space on MAIN STREET range from $10.00
to $30.00 per square foot, with the majority of space renting for
between $14.00 to $17.00 per square foot. Rents for second floor
space on Main Street range range from $8.00 to $12.00 per square
ri foot,
rents for retail space on PLEASANT STREET range from $6.00 to
$10.00, with the exception of spaces located at the corner of Main
and Pleasant Street which run as high as $22.00 per square foot,
rents for retail space on KING STREET range from $4.00 to $12.50 per
square foot, with the majority renting between $6.00 and $10.00 per
square foot. Newer, recently renovated retail space along King
Street ranges from $10.00 to $12.00 per square foot,
rents for retail space on OLD SOUTH STREET, GREEN STREET, and STATE
STREET range from $5.00 to $10.00 per square foot,
rents for retail space on MASONIC, GOTHIC, and CENTER STREETS and
CRAFTS AVENUE range from $5.00 to $16 per square foot, and
rents for retail space on MARKET and HAWLEY STREETS range from $3.40
to $5.00. However, when completed the renovated space in the Char
dan Foods building on Market Street will be available at a signifi—
cantly higher rate than this.
The Research Group
NIS Feasibility Study
Page 43
Rents for office space in Northampton range from about $3.50 to $20.00
per square foot, with the majority of space renting from about $8.00 to $10.00
per square foot (gross). Higher rents ($9.00 to $20.00) are generally charged
for recently renovated or newly constructed office space in more•desireable
locations (Main Street and feeder streets), while rents in the lower range are
charged for second or third —floor space that is not elevatory accessible, old—
er Class B or worse space, and space that lacks convenient parking. Office
space located on less desireable streets (King, parts of Pleasant, Market,
Conz, and South Streets) is also more difficult to rent. However, some build—
ing owners are able to command high rents on these streets provided the space
is of excellent quality and there is ample parking.
One to two years ago, office space rents in Northampton were increasing
rapidly. Because the current supply of office space has exceeded the demand
for that space, rents have stabilized within the past year. It is not likely
that office space rents will increase substantially until the current oversup—
ply of space is occupied.
The Research Group
NIS Feasibility Study Page 44