Retailers expand where they can succeed

Retailers have "to expand or die," Purdue University professor Richard Feinberg said

"It's very hard to grow existing stores' business every year, so they have to expand to increase sales and profits," said Feinberg, who is the university's Director for the Center for Customer Driven Quality. "They have to go somewhere where they're not."

Retailers determine the location of new outlets by the kinds of customers that shop at their existing stores and on what new places in their market areas would support their business, he said.

"They look at the demographics of people who buy in their current stores: their income and education levels," Feinberg said. "They look to see what prospective area matches that before making a commitment. The best companies have very sophisticated profiles of communities. They rank order them and put their store in those areas."

Retailers also confine their stores to communities that are logistically near where they already have outlets so the new locations can easily and inexpensively be supplied with their products.

"Each retailer is making his decision on new locations based on a number of individual criteria," said Grant Monahan, spokesman for the Indiana Retail Council. "It bodes well for Northwest Indiana when you see new stores coming."

David Lasser, owner of Commercial In-Sites in Merrillville, said most retailers use about a 60-mile radius from a center point to locate their outlets.

"These retailers and developers are saying we're going to hit every major population center in that radius, whether it's Schaumburg, Merrillville, Hoffman Estates or Hammond," Lasser said.

The retailers are filling in a map of the Chicago suburbs.

"They're saying there are -- fill in the blank -- number of people per mile as a criteria, or they take the busiest roads," Lasser said. "They highlight those. They circle the major intersections."

Target's criteria is to place its stores about every 10 miles. That makes it easier to place a Target than a Nordstrom store, which uses a different base, Lasser said.

Average per-household income and the number of people per household also play a big part, Lasser said.

"In some area subdivisions, the average home is $500,000," he said. "That's what's going to create the backbone for the market for higher-end retailers. From Commercial In-Sites' perspective, any time we are in a western or northern suburb and we see a store we haven't seen in Northwest Indiana, we look at it as just a matter of time."

Retailers are usually going to go to the hottest markets first, Lasser said.

"It (Northwest Indiana) is a very good market, but it's still not Oak Brook."

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