Retail Market Demand and Impact Analysis City of Elliot Lake, Ontario

Transcription

1 Retail Market Demand and Impact Analysis City of Elliot Lake, Ontario Prepared for: The City of Elliot Lake November 22, 2012

2 November 21, 2012 Mr. Rob De Bortoli CAO, Elliot Lake Elliot Lake City Hall 45 Hillside Drive North Elliot Lake, ON, P5A 1X5 Dear Mr. De Bortoli: Re: Retail Market Demand and Impact Analysis City of Elliot Lake, Ontario urbanmetrics inc. is pleased to submit our report, which details our analysis of the market opportunity for additional retail/service commercial space in the City of Elliot Lake. The Elliot Lake Economic Development Advisory Committee has engaged urbanmetrics to undertake a detailed analysis of the Retail Sector in the City of Elliot Lake in light of the Algo Mall tragedy and provide the Community with a formal assessment of the retail/service commercial growth prospects in the short, medium and long-term. As a result of the Algo Mall closure, almost 20% of the commercial capacity in the City of Elliot Lake has been eliminated. This report provides an assessment of the existing and future market demand for a full range of retail/service commercial and identifies the warranted additional space in each store category. It is also intended to provide Elliot Lake with a strategy for managing its retail and service commercial space to ensure that the appropriate balance of goods and services is available locally. The analyses and appendices in the attached report provide our detailed study findings and conclusions. Yours truly, urbanmetrics inc. Peter Thoma, MCIP, RPP, PLE Partner

3 TABLE OF CONTENTS 1 INTRODUCTION STUDY APPROACH RETAIL MARKET ANALYSIS ASSUMPTIONS RETAIL AND SERVICE COMMERCIAL MARKET ANALYSIS TRADE AREA DELINEATION MARKET CHARACTERISTICS HISTORIC & FORECAST POPULATION PER CAPITA INCOME REVIEW OF RETAIL COMPETITION EXISTING TRADE AREA RETAIL FACILITIES PROPOSED COMMERCIAL DEVELOPMENTS RETAIL MARKET ANALYSIS FOOD STORE RETAIL (FSR) ANALYSIS FOOD STORE EXPENDITURES SUPERMARKET ANALYSIS NON-FOOD STORE RETAIL (NFSR) ANALYSIS NON-FOOD STORE RETAIL EXPENDITURES BUILDING AND OUTDOOR HOME SUPPLY STORE ANALYSIS PHARMACY AND PERSONAL CARE STORE ANALYSIS CLOTHING AND ACCESSORIES STORE ANALYSIS FURNITURE, HOME FURNISHINGS AND ELECTRONICS STORE ANALYSIS GENERAL MERCHANDISE STORE ANALYSIS MISCELLANEOUS RETAIL STOREANALYSIS PER CAPITA SPACE ANALYSIS RETAIL MARKET ANALYSIS CONCLUSIONS COMMERCIAL STRATEGY WARRANTED SPACE IN ELLIOT LAKE OUTSIDE PEARSON PLAZA SUMMARY OF MARKET DEPTH CONCLUSIONS APPENDIX A ONTARIO MINISTRY OF FINANCE POPULATION PROJECTIONS APPENDIX B RETAIL INVENTORY APPENDIX C NAICS CODES

4 APPENDIX D RETAIL ANALYSIS BACKGROUND APPENDIX E CONSUMER SURVEY RESULTS APPENDIX F RETAIL IMPACT ANALYSIS APPENDIX G MARKET DEPTH STORE LIST

5 1 INTRODUCTION urbanmetrics inc. has been retained by the City of Elliot Lake ( the City, Elliot Lake ) to undertake an independent market analysis to determine the amount of additional retail/service commercial space need to serve the local market. In this report, urbanmetrics analyze local market conditions in Elliot Lake, and neighbouring jurisdictions, to quantify the amount of warranted, additional retail space that could be built in Elliot Lake, taking into consideration the space already exists, plus the space that is tentatively proposed as part of Pearson Plaza redevelopment project. 1.1 STUDY APPROACH RETAIL MARKET ANALYSIS The following work plan has been undertaken to evaluate the retail market opportunity for the additional retail/service commercial space in the City of Elliot Lake: 1. Trade Area Delineation: A Trade Area has been defined for the project based on a number of factors including: existing and future competition in the local area, plus the anticipated drawing power of the Pearson Plaza. The Trade Area has been further divided into a Primary Zone (Elliot Lake) and a Secondary Zone (Spanish, Blind River, North Shore, Mississagi River IRI, and Serpent River IRI). 2. Retail and Service Commercial Inventory: An inventory of retail and service commercial uses has been undertaken in the Primary Zone of the defined Trade Area, including vacant floor space. 3. Determine the Dimensions of the Trade Area Market: The population in the Trade Area has been determined for selected years of the study period to Historic and current population levels are based on the Statistics Canada 2006 and 2011 Census data. Future population levels are based on the Ontario Ministry of Finance projections for the Algoma Census Division. In addition, income and expenditure levels have been determined for Trade Area residents for a variety of food store retail ( FSR ) and non-food store retail ( NFSR ) store categories and have been analyzed based on the expenditure approach. 4. Calculate Market Opportunity: Two types of analyses have been utilized to evaluate the market opportunity for retail and service space in the Trade Area: 1) expenditure based approach for FSR and NFSR space, and 2) per capita space analysis approach to determine the appropriate amount of service space. 5. Evaluate Impact: Based on our market analysis, any sales transfers required from existing and future potential competitive stores in the City of Elliot Lake have been determined. 3

6 Specifically, our market analysis and impact assessment has identified (a) the amount of retail and service commercial space warranted in the City of Elliot Lake; (b) the amount of space which could be accommodated beyond the space currently proposed as part of Pearson Plaza; (c) whether it would result in transfers from existing in the Primary Zone; (d) the magnitude of sales transfers, if applicable; and (e) whether the sales transfers would impact the viability of existing retailers. Extensive consumer research has been conducted by urbanmetrics in the Trade Area as a part of the analysis for this report. 1.2 ASSUMPTIONS There are several underlying and basic assumptions upon which the validity of the findings presented in this report depend. Based on our considerable experience in the commercial planning process, we recognize and appreciate the problems associated with making broad and generalized assumptions about future market conditions. Undoubtedly, deviations from historic and current trends will take place in the future. However, basic assumptions are required to determine the extent of such deviations. The basic assumptions used in preparation of this report are summarized below. During the forecast period discussed in this report, a reasonable degree of economic stability will prevail in the Province of Ontario, communities in northern Ontario, and in the City of Elliot Lake. Estimates of future population growth in the Trade Area have been based on the Ontario Ministry of Finance population projections for Algoma, which are assumed to be reliable for the purposes of this study. The official statistical sources utilized in our analysis (based largely on Statistics Canada publications, which have been noted were utilized) are considered sufficiently accurate for the purposes of our analysis. All references to the Canadian dollar in this report, which deal with present and future periods, reflect its 2011 value. It is recognized that fluctuations in the absolute value of the dollar will likely occur during the period covered in this report. However, it is assumed that the relationship between per capita income and expenditures will remain more or less constant during the period analyzed. Since this report deals with future space additions, inflation must be excluded since it has no influence on the physical space used in retail facilities. However, real growth (excluding inflation) in expenditures has been recognized in our analysis. The expected first full year of operation for Pearson Plaza is expected to be Should major changes occur that may influence the reliability of the assumptions noted above, the results of our analysis may require revisions. 4

7 2 RETAIL AND SERVICE COMMERCIAL MARKET ANALYSIS The various components of urbanmetrics retail and service commercial market demand and impact analysis is detailed in the following sections. 2.1 TRADE AREA DELINEATION The total market influence attributed to a retail commercial development typically extends over a wide area beyond any precise boundary that can be drawn. In many cases, the shopping environment, competition, anchor tenants, and the range of goods and services offered in a project will affect the extent of this market influence. For the purpose of making reliable estimates of available market support available for the proposed retail/service commercial development on the subject site, a specific Trade Area has been defined. The Trade Area utilized in our analysis assumes that the proposed development will be characterized primarily by retail and service facilities primarily serving the daily shopping needs of Trade Area residents. The Trade Area delineated for the subject site represents the geographic area from which retail/service commercial developments in the City of Elliot Lake are likely to attract the majority of their customer support. We have considered the location of existing retail/service commercial facilities, as well as the existing and projected population to evaluate the estimated drawing power of the proposed retail development. The Primary Zone is comprised of the City of Elliot Lake. The Secondary Zone includes the communities of Spanish, Blind River, North Shore, Mississagi River IRI, and Serpent River IRI. Although the subject development is expected to derive the majority of its sales volume from the Trade Area population, and particularly the City of Elliot Lake, additional market support would also be derived from expenditures made by non-trade Area residents, such as local employees, tourists, and other visitors to the local area. These expenditures represent inflow sales, which are included in our retail market demand and impact analysis. Recognizing the relatively isolated location of Elliot Lake, it is expected that retail/service commercial facilities will not derive significant support from inflow sales. 2.2 MARKET CHARACTERISTICS In order to analyze the potential market available for retail and service commercial uses in the City of Elliot Lake, it is necessary to review historic growth trends in the Trade Area to determine future population and expenditure levels. Population growth, along with income, are the two major factors influencing the level of retail expenditures in a Trade Area and the retail space in specific store categories warranted in the market. The following subsections provide a detailed overview of the population and per capita income in the various zones of the defined Trade Area. 5

8 2.2.1 HISTORIC & FORECAST POPULATION Figure 2-1 details the historic, current and forecast population for the Trade Area. The 2001, 2006 and 2011 population has been based on Statistics Canada Census data, adjusted for net undercoverage in the Census. Future projections for the Trade Area are based on the Ontario Ministry of Finance estimates for the Algoma Census Division. Appendix A provides details of the population forecast. The Primary Zone, which includes residents in the City of Elliot Lake, has been relatively constant between 2001 and The population in the Primary Zone is projected to increase by approximately 1,000 residents between 2011 and The Secondary Zone population declined between 2001 and 2011, with a decrease of approximately 570 residents. In future years, the population in the Secondary Zone is expected to decrease further, by some 60 persons. Overall, the population in the total Trade Area population is expected to increase by approximately 900 persons between 2011 and FIGURE 2-1: HISTORIC, CURRENT, AND FUTURE POPULATION Primary Zone Population 11,500 11,920 11,790 12,130 12,220 12,480 12,690 12,750 Average Annual Increase Average Annual Growth 0.7% -0.2% 1.0% 0.4% 0.4% 0.3% 0.1% Secondary Zone Population 6,290 6,000 5,720 5,820 5,780 5,690 5,580 5,660 Average Annual Increase Average Annual Growth -0.9% -0.9% 0.6% -0.3% -0.3% -0.4% 0.3% TOTAL STUDY AREA 17,790 17,920 17,510 17,950 18,000 18,170 18,270 18,410 Average Annual Increase Average Annual Growth 0.1% -0.5% 0.8% 0.1% 0.2% 0.1% 0.2% 1) The data for 2001, 2006 and 2011 are based on Statistics Canada Census of Canada. The population in future years is based on Ministry of Finance population projections. The population figures in this table have been adjusted to account for net undercoverage PER CAPITA INCOME Per capita income levels provide a basis for determining the retail expenditure levels of Trade Area residents. As detailed in Figure 2-2, we have calculated the per capita income levels of local residents for both Trade Area zones, based on 2006 Statistics Canada Census data. The Primary Zone has a per capita income level which is approximately 24.2% below the Provincial average. Average per capita income levels are moderately higher in the Secondary Zone, although they remain 16.0% lower than the Provincial average. The income indexes calculated in Figure 2-2 have been utilized to estimate the per capita retail expenditure levels for various store types in each Trade Area zone. We have assumed that future residents in the Trade Area would exhibit similar income characteristics to the existing population. 6

9 FIGURE 2-2: TRADE AREA PER CAPITA INCOME Area Males 15 Years and Over Male Average Income Females 15 Years and Over Female Average Income Total Income 2006 Population Per Capita Income Index to Province Ontario 4,744,710 $46,962 5,074,710 $29,712 $373,600,854,540 12,160,282 $30, % Primary Zone 4,735 $32,628 5,075 $22,578 $269,076,930 11,549 $23, % Secondary Zone 2,220 $39,401 2,330 $26,836 $149,998,100 5,811 $25, % TOTAL TRADE AREA 6,955 $34,790 7,405 $23,918 $419,075,030 17,360 $24, %, based on Statistics Canada, 2006 Census of Canada. 2.3 REVIEW OF RETAIL COMPETITION The following section provides a general overview of the existing and proposed/designated commercial areas located in the Trade Area. A complete inventory of all retail/service commercial uses located in the Trade Area was conducted by urbanmetrics in August We also identified other planned retail developments in the Trade Area and vicinity, namely the proposed Pearson Plaza, based on publicly available information and discussions with municipal planning staff. These existing and planned retail/service commercial facilities in the Trade Area and vicinity have been recognized in our market analysis EXISTING TRADE AREA RETAIL FACILITIES A full retail inventory was conducted by urbanmetrics in August 2012, to identify the existing retail/service commercial establishments in the Trade Area. Our retail market demand and impact analysis focuses on the existing inventory of stores the Primary Zone, in order to determine the warranted additional space in the local market. Appendix B provides the detailed inventory for the Primary Zone used in our retail market demand and impact analysis. Appendix C provides a description of the various store types included in each retail and service category. Our retail inventory indicates that the Primary Zone provides approximately 392,735 square feet of retail/service commercial space, including: 42,652 square feet of Food Store Retail (FSR) space; 174,340 square feet of Non-Food Store Retail (NFSR) space; and 175,743 square feet of service space. It is important to recognize that the existing distribution of retail/service commercial space in Elliot Lake has been impacted by the closure of the Algo Centre Mall, which previously accounted for a significant portion of the total retail space in the Primary Zone. With closure of Algo Centre Mall, Elliot Lake residents are currently under-served in terms of access to a full range of retail/service commercial facilities. 7

10 2.3.2 PROPOSED COMMERCIAL DEVELOPMENTS Pearson Plaza is a new shopping centre currently proposed in Elliot Lake on a 7.63 acre site, situated along Ontario Avenue. Although the development remains in the preliminary design stages, the proposed shopping centre is expected to provide approximately 53,000 square feet of new retail space, in addition to the reconstructed Foodland supermarket (28,000 square feet), and new public library (11,000 square feet). The development is expected to include approximately 20 retailers, in addition to food court and common corridor. The proposed development concept also allocates some space for future development, which could be used to accommodate future retail demand in the local market. A preliminary concept map for Pearson Plaza is provided in Figure 2-3. FIGURE 2-3: PROPOSED PEARSON PLAZA CONCEPT PLAN SOURCE: MCCOWAN & ASSOCIATES (NOV 2012) 8

11 3 RETAIL MARKET ANALYSIS To determine the amount of additional retail/service commercial space warranted in the City of Elliot Lake, including space outside Pearson Plaza, urbanmetrics has employed two methodologies: (1) Expenditure Approach a residual expenditure market analysis has been conducted for both food store retail ( FSR ) and non-food store retail ( NFSR ) store categories. Our residual market analysis provides an indication of the market opportunity for additional retail space in the Trade Area, and the potential impact on existing/designated and proposed retail areas in Elliot Lake, including Pearson Plaza, which is intended to have a first full year of operation in (2) Per Capita Space Approach a per capita space analysis has also been undertaken that addresses the market need for the range of service commercial uses. 3.1 FOOD STORE RETAIL (FSR) ANALYSIS FOOD STORE EXPENDITURES The calculation of the average per capita FSR expenditures available from Primary and Secondary Zone residents has been detailed in Figure 3-1. Figure 3-1 also indicates the average per capita FSR expenditure level for residents in the Province of Ontario, which is estimated at $2,188 for Expenditure data for Ontario is derived from Statistics Canada s Retail Trade data (see Appendix D for details). The provincial per capita expenditure estimate for 2011 has been used to determine the per capita expenditure levels of Trade Area residents by applying an expenditure regression equation developed by urbanmetrics based on the Statistics Canada Survey of Household Spending data (see Appendix D for details). Real growth assumptions are based on historic data and expected future trends, which have be utilized to forecast the per capita FSR expenditure potential in the Primary and Secondary Zones. Based on historic real growth and future expectations, we have assumed an annual real growth rate of 0.25% (not compounded) for FSR expenditures. Future changes in expenditure levels which result from inflation are not recognized in our real growth assumptions and therefore future expenditure levels are expressed in terms of the 2011 value of the Canadian dollar. The total FSR expenditure potential for Trade Area residents is calculated by multiplying the average per capita FSR expenditures by the corresponding population level in each Trade Area zone. Total FSR expenditures available from Trade Area residents are estimated at $37.5 9

12 million for By 2031, the total FSR expenditure potential available from Trade Area residents is expected to increase to $41.4 million, which represents a growth of $3.9 million over the study period. Total FSR expenditures in the Trade Area have also been distributed into two main store categories: supermarket/grocery and other convenience/specialty food stores. This distribution has been based on the provincial distribution. For the purposes of our analysis, only minimal changes in this distribution have been assumed over the study period. FIGURE 3-1: FOOD STORE RETAIL (FSR) EXPENDITURE POTENTIAL 2011 Dollars 2011 Province of Ontario Per Capita FSR Expenditure $ 2,188 ( Dollars Primary Zone Income Index to Province FSR Expenditure Index to Province ( Per Capita FSR Expenditure (3 $ 2,135 $ 2,151 $ 2,162 $ 2,188 $ 2,215 $ 2,242 Population 11,790 12,130 12,220 12,480 12,690 12,750 TOTAL FSR POTENTIAL ($Millions) $ 25.2 $ 26.1 $ 26.4 $ 27.3 $ 28.1 $ 28.6 FSR - Supermarket Share (4 87.4% 87.5% 87.5% 87.5% 87.5% 87.5% FSR - Grocery/Other Food Store Share (4 12.6% 12.5% 12.5% 12.5% 12.5% 12.5% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100% FSR - Supermarkets (4 $ 22.0 $ 22.8 $ 23.1 $ 23.9 $ 24.6 $ 25.0 FSR - Grocery/Other Food Store Share (4 $ 3.2 $ 3.3 $ 3.3 $ 3.4 $ 3.5 $ 3.6 Total $ 25.2 $ 26.1 $ 26.4 $ 27.3 $ 28.1 $ 28.6 Secondary Zone Income Index to Province FSR Expenditure Index to Province ( Per Capita FSR Expenditure (3 $ 2,153 $ 2,169 $ 2,180 $ 2,207 $ 2,234 $ 2,261 Population 5,720 5,820 5,780 5,690 5,580 5,660 TOTAL FSR POTENTIAL ($Millions) $ 12.3 $ 12.6 $ 12.6 $ 12.6 $ 12.5 $ 12.8 FSR - Supermarket Share (4 87.4% 87.5% 87.5% 87.5% 87.5% 87.5% FSR - Grocery/Other Food Store Share (4 12.6% 12.5% 12.5% 12.5% 12.5% 12.5% Total 100.0% 100% 100% 100% 100% 100% FSR - Supermarkets (4 $ 10.8 $ 11.0 $ 11.0 $ 11.0 $ 10.9 $ 11.2 FSR - Grocery/Other Food Store Share (4 $ 1.5 $ 1.6 $ 1.6 $ 1.6 $ 1.6 $ 1.6 Total $ 12.3 $ 12.6 $ 12.6 $ 12.6 $ 12.5 $ 12.8 TOTAL STUDY AREA TOTAL FSR POTENTIAL ($Millions) $ 37.5 $ 38.7 $ 39.0 $ 39.9 $ 40.6 $ 41.4 TOTAL FSR - Supermarkets ($Millions) $ 32.8 $ 33.8 $ 34.1 $ 34.9 $ 35.5 $ 36.2 Cumulative Growth $ 1.0 $ 1.3 $ 2.1 $ 2.7 $ 3.4 TOTAL FSR - Grocery/Other Food ($Millions) $ 4.7 $ 4.9 $ 4.9 $ 5.0 $ 5.1 $ 5.2 Cumulative Growth $ 0.2 $ 0.2 $ 0.3 $ 0.4 $ 0.5 1) 2) 3) Based on Statistics Canada, Retail Trade (full year 2011 data). See Appendix D for more information. urbanmetrics inc. estimate, based on Statistics Canada, Survey of Household Spending in 2009 (December 2010). See Appendix D for more information. Per capita Food Store Retail expenditures are forecast to increase by 0.25% per year (not compounded) in future years in real terms (i.e. excluding inflation). See Appendix D for more information. 4) The shares for 2011 are urbanmetrics inc. estimates, based on the Provincial distribution. 10

13 3.1.2 SUPERMARKET ANALYSIS There are currently two supermarkets in Elliot Lake, including a 34,000 square foot No Frills, as well as a Foodland, which is currently operating at a temporary location in Elliot Lake. The temporary Foodland supermarket has been established in Collins Hall, using financial assistance from the Business Continuity Fund established by the Provincial government. The Foodland was located in Algo Centre Mall, and previously occupied approximately 27,000 square feet of retail space. Figure 3-2 provides a detailed evaluation of the market opportunity for additional supermarket space in the Trade Area. The Primary Zone or Elliot Lake share has been forecast over the study period. This represents the expenditures available from Primary Zone residents that could be captured by a new supermarket in the local market. The remaining portion of these expenditures represent those made outside the Trade Area (e.g. Sudbury, Timmins.). According to the results of our online consumer survey research in the Trade Area, the Primary Zone share is currently 94.5% in the Primary Zone, as detailed in Appendix E. Subsequently we have estimated the Primary Zone share in the Secondary Zone at approximately 75.0%. Assuming that the majority of residents in the Primary Zone would continue to patronize local supermarkets on the subject site, a 95% future Primary Zone Share has been forecast. For the Secondary Zone, we have assumed the Primary Zone share would remain constant at 75.0%, recognizing that residents of this area may also choose to patronize stores located outside the Trade Area. Based on Primary Zone share assumptions, the total expenditures available from Trade Area residents for additional supermarket space equates to $28.9 million in 2011, increasing to $31.0 million in 2021, before increasing further to $32.2 million by The residual potential represents the additional expenditures from Trade Area residents that would be available in the future for new supermarket space in the local market. Assuming an inflow of 10% from outside the Trade Area, over the study period some 2,400 to 6,000 square feet of additional supermarket space would be warranted at a sales performance levels ranging between $500 and $600 per square foot (expressed in 2011 dollars). It is important to recognize that we have already recognized the reconstruction of the Foodland supermarket. As a result, our warranted additional space calculations reflect the amount of additional supermarket space beyond the newly reconstructed 28,000 square foot Foodland. 11

14 FIGURE 3-2: SUPERMARKET ANALYSIS SUPERMARKET ANALYSIS 2011 Dollars Primary Zone Supermarket Expenditures ($Millions) $ 22.0 $ 22.8 $ 23.1 $ 23.9 $ 24.6 $ 25.0 Estimated Primary Zone Share % (1 94.5% 95.0% 95.0% 95.0% 95.0% 95.0% Estimated Primary Zone Share ($ Millions) $ 20.8 $ 21.7 $ 21.9 $ 22.7 $ 23.4 $ 23.8 Residual Potential $ 0.9 $ 1.1 $ 1.9 $ 2.6 $ 3.0 Secondary Zone Supermarket Expenditures ($Millions) $ 10.8 $ 11.0 $ 11.0 $ 11.0 $ 10.9 $ 11.2 Estimated Primary Zone Share % (1 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% Estimated Primary Zone Share ($ Millions) $ 8.1 $ 8.3 $ 8.3 $ 8.3 $ 8.2 $ 8.4 Residual $ 0.2 $ 0.2 $ 0.2 $ 0.1 $ 0.3 TOTAL STUDY AREA Total Supermarket Expenditures ($Millions) $ 32.8 $ 33.8 $ 34.1 $ 34.9 $ 35.5 $ 36.2 Total Estimated Primary Zone Share ($Millions) $ 28.9 $ 30.0 $ 30.2 $ 31.0 $ 31.6 $ 32.2 Estimated Primary Zone Share % 88.1% 88.8% 88.6% 88.8% 89.0% 88.8% Existing Sales from Study Area Residents ($Millions) $ 28.9 $ 28.9 $ 28.9 $ 28.9 $ 28.9 $ 28.9 Residual Potential ($Millions) $ 1.1 $ 1.3 $ 2.1 $ 2.7 $ 3.3 Existing Supermarkets (60,816 sq.ft.) Sales/Sq.Ft. Levels (Including average Inflow of 10%): $ 528 WARRANTED ADDITIONAL SPACE - Primary Zone(including inflow, excluding sales transfers) Additional Residual Potential Available $ 1.1 $ 1.3 $ 2.1 $ 2.7 $ 3.3 (2 Plus Inflow 10.0% $ 0.1 $ 0.1 $ 0.2 $ 0.3 $ 0.4 TOTAL ADDITIONAL SALES POTENTIAL AVAILABLE $ 1.2 $ 1.4 $ 2.3 $ 3.0 $ 3.6 WARRANTED ADDITIONAL SQUARE FEET $500 per sq. ft. 2,400 2,900 4,700 6,000 $525 per sq. ft. 2,300 2,800 4,400 5,700 $550 per sq. ft. 2,200 2,600 4,200 5,500 $575 per sq. ft. 2,100 2,500 4,100 5,200 $600 per sq. ft. 2,000 2,400 3,900 5,000 6, Dollars PROPOSED SUPERMARKET SPACE - Primary Zone Foodland (Reconstruction) Proposed Supermarket Space (square feet GLA) 28,000 28,000 28,000 28,000 28,000 Estimated Sales per Square Foot $ 500 $ 500 $ 500 $ 500 $ 500 Total Estimated Sales ($Millions) $ 14.0 $ 14.0 $ 14.0 $ 14.0 $ 14.0 Less Inflow (%) (2 7.5% 7.5% 7.5% 7.5% 7.5% Less Inflow ($Millions) $ 1.1 $ 1.1 $ 1.1 $ 1.1 $ 1.1 Total Sales Volume From Study Area Residents ($Millions) $ 13.0 $ 13.0 $ 13.0 $ 13.0 $ ) urbanmetrics inc. estimates based on online consumer survey results. 2) urbanmetrics estimate. 3) Rounded to the nearest 100 square feet. Recognizing that the reconstruction of the Foodland supermarket will only add approximately 1,000 square feet of supermarket space in the local market, there is expected to be no impacts on existing supermarkets in Elliot Lake. To account for the Foodland reconstruction we have recorded the previous store as having closed, and recorded the new store at 28,000 square feet, with a first full year of operation in Given that the new Foodland will replace the previous supermarket, there are not expected to be any significant impacts on the existing No Frills supermarket, which is currently performing at the high-end of the typical sales performance level for this store category. 12

15 3.2 NON-FOOD STORE RETAIL (NFSR) ANALYSIS As part of our analysis, we also analyzed the potential for a number of non-food store retail ( NFSR ) tenants such as a drug store, a general merchandise store, and a range of other NFSR stores such as a florist, pet supply, electronics, telephone, and toy/game store NON-FOOD STORE RETAIL EXPENDITURES The calculation of the average per capita and total NFSR expenditures available from Primary and Secondary Zone residents is shown in Figure 3-3. Figure 3-3 also indicates the average per capita NFSR expenditure level for the Province, which is estimated at $5,554 for These expenditures are distributed between each NFSR category based on the results of our online consumer survey research, as detailed in Appendix E. Expenditure data for Ontario has been derived from Statistics Canada s Retail Trade data (see Appendix D). The provincial per capita expenditure estimate for 2011 has been used to determine the per capita expenditure levels of Trade Area residents, by applying an expenditure regression equation developed by urbanmetrics based on the Statistics Canada Survey of Household Spending data (see Appendix D). Based on historic data and expected future trends, we have assumed an annual real growth rate of 1.5% (not compounded) for NFSR expenditures. Future changes in expenditure levels which result from inflation are not recognized in our growth assumptions and therefore future expenditure levels are expressed in terms of the 2011 value of the Canadian dollar. Trade Area residents total NFSR expenditure potential has been calculated by multiplying the average per capita NFSR expenditures by the corresponding population level in each Trade Area zone. The total NFSR expenditure potential available from Trade Area residents is estimated at $88.8 million in 2011 and is expected to increase to $121.4 million by 2031, which represents a growth of $32.6 million over the study period. Total NFSR expenditures in the Trade Area have been distributed by various major NFSR store categories. The existing provincial distribution has been used to estimate the distribution by store type for the Primary and Secondary Zones. 13

16 FIGURE 3-3: NFSR EXPENDITURE POTENTIAL 2011 Dollars 2011 Province of Ontario Per Capita NFSR Expenditure $ 5,554 ( Dollars Primary Zone Income Index to Province NFSR Expenditure Index to Province ( Per Capita NFSR Expenditure (3 $ 5,015 $ 5,241 $ 5,391 $ 5,767 $ 6,143 $ 6,520 Population 11,790 12,130 12,220 12,480 12,690 12,750 TOTAL NFSR POTENTIAL ($Millions) $ 59.1 $ 63.6 $ 65.9 $ 72.0 $ 78.0 $ 83.1 Pharmacies and Personal Care Stores (4 15.6% 17.0% 17.0% 17.0% 17.0% 17.0% Clothing and Accessories Stores (4 8.4% 10.0% 10.0% 10.0% 10.0% 10.0% Furniture, Home Furnishings and Electronics Stores (4 11.1% 11.0% 11.0% 11.0% 11.0% 11.0% Building and Outdoor Home Supplies Stores (4 12.3% 12.0% 12.0% 12.0% 12.0% 12.0% General Merchandise (4 20.9% 31.0% 31.0% 31.0% 31.0% 31.0% Department Stores (4 18.0% 5.0% 5.0% 5.0% 5.0% 5.0% Miscellanous Retailers (4 5.4% 7.0% 7.0% 7.0% 7.0% 7.0% Automotive (4 8.3% 7.0% 7.0% 7.0% 7.0% 7.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100% Pharmacies and Personal Care Stores $ 9.2 $ 10.8 $ 11.2 $ 12.2 $ 13.3 $ 14.1 Clothing and Accessories Stores $ 5.0 $ 6.4 $ 6.6 $ 7.2 $ 7.8 $ 8.3 Furniture, Home Furnishings and Electronics Stores $ 6.6 $ 7.0 $ 7.2 $ 7.9 $ 8.6 $ 9.1 Building and Outdoor Home Supplies Stores $ 7.3 $ 7.6 $ 7.9 $ 8.6 $ 9.4 $ 10.0 General Merchandise $ 12.4 $ 19.7 $ 20.4 $ 22.3 $ 24.2 $ 25.8 Department Stores $ 10.6 $ 3.2 $ 3.3 $ 3.6 $ 3.9 $ 4.2 Miscellanous Retailers $ 3.2 $ 4.5 $ 4.6 $ 5.0 $ 5.5 $ 5.8 Automotive $ 4.9 $ 4.5 $ 4.6 $ 5.0 $ 5.5 $ 5.8 Total $ 59.2 $ 63.7 $ 65.8 $ 71.8 $ 78.2 $ 83.1 Secondary Zone Income Index to Province NFSR Expenditure Index to Province ( Per Capita NFSR Expenditure (3 $ 5,199 $ 5,433 $ 5,589 $ 5,979 $ 6,369 $ 6,759 Population 5,720 5,820 5,780 5,690 5,580 5,660 TOTAL NFSR POTENTIAL ($Millions) $ 29.7 $ 31.6 $ 32.3 $ 34.0 $ 35.5 $ 38.3 Pharmacies and Personal Care Stores (4 15.6% 17.0% 17.0% 17.0% 17.0% 17.0% Clothing and Accessories Stores (4 8.4% 10.0% 10.0% 10.0% 10.0% 10.0% Furniture, Home Furnishings and Electronics Stores (4 11.1% 11.0% 11.0% 11.0% 11.0% 11.0% Building and Outdoor Home Supplies Stores (4 12.3% 12.0% 12.0% 12.0% 12.0% 12.0% General Merchandise (4 20.9% 31.0% 31.0% 31.0% 31.0% 31.0% Department Stores (4 18.0% 5.0% 5.0% 5.0% 5.0% 5.0% Miscellanous Retailers (4 5.4% 7.0% 7.0% 7.0% 7.0% 7.0% Automotive (4 8.3% 7.0% 7.0% 7.0% 7.0% 7.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100% Pharmacies and Personal Care Stores $ 4.6 $ 5.4 $ 5.5 $ 5.8 $ 6.0 $ 6.5 Clothing and Accessories Stores $ 2.5 $ 3.2 $ 3.2 $ 3.4 $ 3.6 $ 3.8 Furniture, Home Furnishings and Electronics Stores $ 3.3 $ 3.5 $ 3.6 $ 3.7 $ 3.9 $ 4.2 Building and Outdoor Home Supplies Stores $ 3.7 $ 3.8 $ 3.9 $ 4.1 $ 4.3 $ 4.6 General Merchandise $ 6.2 $ 9.8 $ 10.0 $ 10.5 $ 11.0 $ 11.9 Department Stores $ 5.3 $ 1.6 $ 1.6 $ 1.7 $ 1.8 $ 1.9 Miscellanous Retailers $ 1.6 $ 2.2 $ 2.3 $ 2.4 $ 2.5 $ 2.7 Automotive $ 2.5 $ 2.2 $ 2.3 $ 2.4 $ 2.5 $ 2.7 Total $ 29.7 $ 31.7 $ 32.4 $ 34.0 $ 35.6 $

17 FIGURE 3-3: NFSR EXPENDITURE POTENTIAL continued TOTAL STUDY AREA TOTAL NFSR POTENTIAL ($Millions) $ 88.8 $ 95.2 $ 98.2 $ $ $ Cumulative Growth $ 6.4 $ 9.4 $ 17.2 $ 24.7 $ 32.6 General Merchandise Store Share ($Millions) $ 18.6 $ 29.5 $ 30.4 $ 32.8 $ 35.2 $ 37.7 General Merchandise Store Share (%) 20.9% 31.0% 31.0% 30.9% 31.0% 31.1% Cumulative Growth $ 10.9 $ 0.9 $ 2.4 $ 2.4 $ 2.5 Department Store Share ($Millions) $ 15.9 $ 4.8 $ 4.9 $ 5.3 $ 5.7 $ 6.1 Department Store Share (%) 17.9% 5.0% 5.0% 5.0% 5.0% 5.0% Cumulative Growth -$11.1 $ 0.1 $ 0.4 $ 0.4 $ 0.4 Apparel and Accessories Store Share ($Millions) $ 7.5 $ 9.6 $ 9.8 $ 10.6 $ 11.4 $ 12.1 Apparel and Accessories Store Share (%) 8.4% 10.1% 10.0% 10.0% 10.0% 10.0% Cumulative Growth $ 2.1 $ 0.2 $ 0.8 $ 0.8 $ 0.7 Furniture, Home Furnishings and Electronics Store Share ($Millions) $ 9.9 $ 10.5 $ 10.8 $ 11.6 $ 12.5 $ 13.3 Furniture, Home Furnishings and Electronics Store Share (%) 11.1% 11.0% 11.0% 10.9% 11.0% 11.0% Cumulative Growth $ 0.6 $ 0.3 $ 0.8 $ 0.9 $ 0.8 Miscellaneous Retailers Share ($Millions) $ 4.8 $ 6.7 $ 6.9 $ 7.4 $ 8.0 $ 8.5 Other Miscellaneous Retailers Share (%) 5.4% 7.0% 7.0% 7.0% 7.0% 7.0% Cumulative Growth $ 1.9 $ 0.2 $ 0.5 $ 0.6 $ 0.5 Health and Personal Care Store Share ($Millions) $ 13.8 $ 16.2 $ 16.7 $ 18.0 $ 19.3 $ 20.6 Health and Personal Care Store Share (%) 15.5% 17.0% 17.0% 17.0% 17.0% 17.0% Cumulative Growth $ 2.4 $ 0.5 $ 1.3 $ 1.3 $ 1.3 Building and Outdoor Home Supply Store Share ($Millions) $ 11.0 $ 11.4 $ 11.8 $ 12.7 $ 13.7 $ 14.6 Building and Outdoor Home Supply Store Share (%) 12.4% 12.0% 12.0% 12.0% 12.1% 12.0% Cumulative Growth $ 0.4 $ 0.4 $ 0.9 $ 1.0 $ 0.9 1) Based on Statistics Canada, Retail Trade (full year 2011 data). See Appendix D for more information. 2) urbanmetrics inc. estimate, based on Statistics Canada, Survey of Household Spending in 2009 (December 2010). See Appendix D for more information. 3) Per capita Non-Food Store Retail expenditures are forecast to increase by 1.5% per year (not compounded) in future years in real terms (i.e. excluding inflation). See Appendix D for more information. 4) The shares for 2011 are urbanmetrics inc. estimates, based on the Provincial distribution. 15

18 3.2.2 BUILDING AND OUTDOOR HOME SUPPLY STORE ANALYSIS Figure 3-4 provides a detailed evaluation of the market opportunity for building and outdoor home supply space in the Primary Zone. Based on the results of our online consumer survey, the Primary Zone share in the Primary Zone is 88.7%, as detailed in Appendix E. We have estimated the Primary Zone share in the Secondary Zone at 60.0%. With the introduction of building and outdoor home supplies space in the Trade Area, we have estimated that the future Primary Zone share for Trade Area residents would increase. In future years, the Primary Zone share has been estimated at 90% for Primary Zone residents; with a 65% Primary Zone share for Secondary Zone residents. Based on the calculations in Figure 3-4, the Primary Zone share of building and outdoor home supply expenditures derived from all Trade Area residents amounts to $11.4 million in 2014; increasing to $14.6 million by 2031 (expressed in 2011 dollars). Residual potential represents the additional expenditures available from Trade Area residents in the future for building and outdoor home supply space in the Primary Zone. Including an additional 15% inflow from outside the Trade Area, we have estimated the total additional sales potential available for Primary Zone building and outdoor home supply stores would amount to $0.7 million in 2014, increasing to $3.9 million by If we allocate the available sales potential and assume some 5,000 square feet of building and outdoor home supply space is constructed in the Primary Zone, there would still be residual market demand by the end of the study period if the new space operates at an average sales performance between $250 and to $350 per square foot (expressed in 2011 dollars). These sales performance levels are considered reasonable based on the average sales performance level for this store category in Ontario. Recognizing the majority of sales support for building and outdoor home supply space in the Primary Zone would be derived from future population and expenditure growth in the local market, any impacts on existing building and outdoor home supply stores in Elliot Lake are expected to be negligible. In Figure 3-4 we have provided an estimate of the potential sales transfers that would occur from existing building and outdoor home supply stores. Based on our estimates, only minimal transfers would be required over the study period, and no sales transfers would be required after A detailed analysis of the impact of the addition of building and outdoor home supply store space on existing building and outdoor home supply stores in the Primary Zone is provided in Appendix F. 16

19 FIGURE 3-4: BUILDING AND OUTDOOR HOME SUPPLY STORE ANALYSIS 2011 Dollars Primary Zone Home Improvement ($Millions) $ 7.3 $ 7.6 $ 7.9 $ 8.6 $ 9.4 $ 10.0 Estimated Primary Zone Share % (1 88.7% 90.0% 90.0% 90.0% 90.0% 90.0% Estimated Primary Zone Share ($ Millions) $ 6.5 $ 6.8 $ 7.1 $ 7.7 $ 8.5 $ 9.0 Residual Potential $ 0.3 $ 0.6 $ 1.2 $ 2.0 $ 2.5 Secondary Zone Home Improvement ($Millions) $ 3.7 $ 3.8 $ 3.9 $ 4.1 $ 4.3 $ 4.6 Estimated Primary Zone Share % (1 60.0% 65.0% 65.0% 65.0% 65.0% 65.0% Estimated Primary Zone Share ($ Millions) $ 2.2 $ 2.5 $ 2.5 $ 2.7 $ 2.8 $ 3.0 Residual $ 0.3 $ 0.3 $ 0.5 $ 0.6 $ 0.8 TOTAL STUDY AREA Total Home Improvement Expenditures ($Millions) $ 11.0 $ 11.4 $ 11.8 $ 12.7 $ 13.7 $ 14.6 Total Estimated Primary Zone Share ($Millions) $ 8.7 $ 9.3 $ 9.6 $ 10.4 $ 11.3 $ 12.0 Estimated Primary Zone Share % 79.1% 81.6% 81.4% 81.9% 82.5% 82.1% Existing Sales from Study Area Residents ($Millions) $ 8.7 $ 8.7 $ 8.7 $ 8.7 $ 8.7 $ 8.7 Residual Potential ($Millions) $ 0.6 $ 0.9 $ 1.7 $ 2.6 $ 3.3 Existing Home Improvement Stores(29,931 sq.ft.) Sales/Sq.Ft. Levels (Including average Inflow of 15%): $ 342 WARRANTED ADDITIONAL Home Improvement SPACE - Primary Zone(including inflow, excluding sales transfers) Additional Residual Potential Available $ 0.6 $ 0.9 $ 1.7 $ 2.6 $ 3.3 (2 Plus Inflow 15.0% $ 0.1 $ 0.2 $ 0.3 $ 0.5 $ 0.6 TOTAL ADDITIONAL SALES POTENTIAL AVAILABLE $ 0.7 $ 1.1 $ 2.0 $ 3.1 $ 3.9 WARRANTED ADDITIONAL SQUARE FEET $250 per sq. ft. 2,800 4,200 8,000 12,200 $275 per sq. ft. 2,600 3,900 7,300 11,100 $300 per sq. ft. 2,400 3,500 6,700 10,200 $325 per sq. ft. 2,200 3,300 6,200 9,400 $350 per sq. ft. 2,000 3,000 5,700 8,700 11, Dollars PROPOSED Home Improvement SPACE - Primary Zone Elliot Lake - General Location(s) Proposed Space (square feet GLA) 5,000 5,000 5,000 5,000 5,000 Estimated Sales per Square Foot $ 250 $ 262 $ 291 $ 321 $ 350 Total Estimated Sales ($Millions) $ 1.3 $ 1.3 $ 1.5 $ 1.6 $ 1.8 Less Inflow (%) (2 15% 15% 15% 15% 15% Less Inflow ($Millions) $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.3 Total Sales Volume From Study Area Residents ($Millions) $ 1.1 $ 1.1 $ 1.3 $ 1.4 $ 1.5 PROPOSED NEW SPACE SALES TRANSFER OR RESIDUAL DEMAND Total Proposed Space (sq. ft.) 5,000 5,000 5,000 5,000 5,000 Total Sales Volume ($ Millions) $ 1.3 $ 1.3 $ 1.5 $ 1.6 $ 1.8 Total Sales Volume Required from Study Area Residents (excludes inflow) $ 1.1 $ 1.1 $ 1.3 $ 1.4 $ 1.5 Total Sales Volume Available from Study Area Residents (excludes inflow) $ 0.6 $ 0.9 $ 1.7 $ 2.6 $ 3.3 Sales Transfer Required From Existing Stores (-)/Residual Market Demand (+) -$0.5 -$0.2 $ 0.4 $ 1.2 $ 1.8 1) urbanmetrics inc., based on online consumer survey results, future years based on urbanmetrics estimates. 2) urbanmetrics estimate. 3) Rounded to the nearest 100 square feet. 17

20 3.2.3 PHARMACY AND PERSONAL CARE STORE ANALYSIS Figure 3-5 provides a detailed evaluation of the market opportunity for pharmacy and personal care space in the Primary Zone. Based on the results of our online consumer survey, the Primary Zone share in the Primary Zone is 95.2%, as detailed in Appendix E. We have estimated the Primary Zone share in the Secondary Zone at 75.0%. For the pharmacy and personal care category, we have estimated that the future Primary Zone share for Trade Area residents would remain relatively constant. In future years, the Primary Zone share has been estimated at 95.0% for Primary Zone residents; with a 75.0% Primary Zone share for Secondary Zone residents. Based on the calculations in Figure 3-5, the Primary Zone share of pharmacy and personal care expenditures derived from all Trade Area residents amounts to $16.2 million in 2014; increasing to $20.6 million by 2031 (expressed in 2011 dollars). Residual potential represents the additional expenditures available from Trade Area residents in future years for pharmacy and personal care space in the Primary Zone. Including an additional 10% inflow from outside the Trade Area, we have estimated the total additional sales potential available for Primary Zone pharmacy and personal care stores would amount to $2.3 million in 2014, increasing to $6.6 million by If we allocate the available sales potential and assume some 2,000 square feet of pharmacy and personal care space is constructed as part of Pearson Plaza, performing at an average sales performance between $600 and $700 per square foot (expressed in 2011 dollars), there would be residual market demand to support additional pharmacy and personal care space elsewhere in Elliot Lake. These sales performance levels are considered reasonable based on the average sales performance level for this store category in Ontario. After considering the 2,000 square feet of pharmacy and personal care space proposed as part of Pearson Plaza, there would still be residual market demand, which would warrant between 1,700 and 7,800 square feet of additional pharmacy and personal care space in the Trade Area over the study period. Recognizing the majority of sales support for pharmacy and personal care space on the subject site would be derived from future population and expenditure growth in the Primary Zone, there are expected to be no impacts on existing pharmacy and personal care stores in Elliot Lake. In Figure 3-5 we have provided an estimate of the residual market demand for additional pharmacy and personal care space in the Primary Zone. Based on our estimates, no sales transfers would be required during the study period. In fact, our analysis indicates that there would be market opportunity for additional pharmacy and personal care space in Elliot Lake. A detailed analysis of the impact of the addition of pharmacy and personal care store space on existing pharmacy and personal care stores is provided in Appendix F. 18

21 FIGURE 3-5: PHARMACY AND PERSONAL CARE STORE ANALYSIS 2011 Dollars Primary Zone Pharmacies and Personal Care ($Millions) $ 9.2 $ 10.8 $ 11.2 $ 12.2 $ 13.3 $ 14.1 Estimated Primary Zone Share % (1 95.2% 95.0% 95.0% 95.0% 95.0% 95.0% Estimated Primary Zone Share ($ Millions) $ 8.8 $ 10.3 $ 10.6 $ 11.6 $ 12.6 $ 13.4 Residual Potential $ 1.5 $ 1.8 $ 2.8 $ 3.8 $ 4.6 Secondary Zone Pharmacies and Personal Care ($Millions) $ 4.6 $ 5.4 $ 5.5 $ 5.8 $ 6.0 $ 6.5 Estimated Primary Zone Share % (1 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% Estimated Primary Zone Share ($ Millions) $ 3.5 $ 4.1 $ 4.1 $ 4.4 $ 4.5 $ 4.9 Residual $ 0.6 $ 0.6 $ 0.9 $ 1.0 $ 1.4 TOTAL STUDY AREA Total Pharmacies and Personal Care ($Millions) $ 13.8 $ 16.2 $ 16.7 $ 18.0 $ 19.3 $ 20.6 Total Estimated Primary Zone Share ($Millions) $ 12.3 $ 14.4 $ 14.7 $ 16.0 $ 17.1 $ 18.3 Estimated Primary Zone Share % 89.1% 88.9% 88.0% 88.9% 88.6% 88.7% Existing Sales from Study Area Residents ($Millions) $ 12.3 $ 12.3 $ 12.3 $ 12.3 $ 12.3 $ 12.3 Residual Potential ($Millions) $ 2.1 $ 2.4 $ 3.7 $ 4.8 $ 6.0 Existing Pharmacies and Personal Care Stores (36,230 sq.ft.) Sales/Sq.Ft. Levels (Including average Inflow of 10%): $ 377 WARRANTED ADDITIONAL Pharmacies and Personal Care SPACE - Primary Zone(including inflow, excluding sales transfers) Additional Residual Potential Available $ 2.1 $ 2.4 $ 3.7 $ 4.8 $ 6.0 (2 Plus Inflow 10.0% $ 0.2 $ 0.3 $ 0.4 $ 0.5 $ 0.7 TOTAL ADDITIONAL SALES POTENTIAL AVAILABLE $ 2.3 $ 2.7 $ 4.1 $ 5.3 $ 6.6 WARRANTED ADDITIONAL SQUARE FEET $600 per sq. ft. 3,900 4,400 6,900 8,900 $625 per sq. ft. 3,700 4,300 6,600 8,500 $650 per sq. ft. 3,600 4,100 6,300 8,200 $675 per sq. ft. 3,500 4,000 6,100 7,900 $700 per sq. ft. 3,300 3,800 5,900 7,600 9, Dollars PROPOSED PHARMACIES AND PERSONAL CARE SPACE - PRIMARY ZONE Pearson Plaza Proposed Space (square feet GLA) 2,000 2,000 2,000 2,000 2,000 Estimated Sales per Square Foot $ 600 $ 612 $ 641 $ 671 $ 700 Total Estimated Sales ($Millions) $ 1.2 $ 1.2 $ 1.3 $ 1.3 $ 1.4 Less Inflow (%) (2 10.0% 10.0% 10.0% 10.0% 10.0% Less Inflow ($Millions) $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1 Total Sales Volume From Study Area Residents ($Millions) $ 1.1 $ 1.1 $ 1.2 $ 1.2 $ 1.3 PROPOSED NEW SPACE SALES TRANSFER OR RESIDUAL DEMAND Total Proposed Pharmacies and Personal Care Space (sq. ft.) 2,000 2,000 2,000 2,000 2,000 Total Sales Volume ($ Millions) $ 1.2 $ 1.2 $ 1.3 $ 1.3 $ 1.4 Total Sales Volume Required from Study Area Residents (excludes inflow) $ 1.1 $ 1.1 $ 1.2 $ 1.2 $ 1.3 Total Sales Volume Available from Study Area Residents (excludes inflow) $ 2.1 $ 2.4 $ 3.7 $ 4.8 $ 6.0 Sales Transfer Required From Existing Stores (-)/Residual Market Demand (+) $ 1.0 $ 1.3 $ 2.5 $ 3.6 $ 4.7 Warranted Additional Space Elliot Lake - General Location(s) (excludes $600 per sq. ft. 1,700 2,200 4,200 6,000 $625 per sq. ft. 1,600 2,100 4,000 5,800 $650 per sq. ft. 1,500 2,000 3,800 5,500 $675 per sq. ft. 1,500 1,900 3,700 5,300 $700 per sq. ft. 1,400 1,900 3,600 5,100 6,700 1) urbanmetrics inc., based on online consumer survey results, future years based on urbanmetrics estimates. 2) urbanmetrics estimate. 3) Rounded to the nearest 100 square feet. 19

22 3.2.4 CLOTHING AND ACCESSORIES STORE ANALYSIS Figure 3-6 provides a detailed evaluation of the market opportunity for clothing and accessories space in the Primary Zone. Based on the results of our online consumer survey, the Primary Zone share in the Primary Zone is 60.0%, as detailed in Appendix E. We have also estimated the Primary Zone share in the Secondary Zone at 60.0%. With the introduction of clothing and accessories space in the Trade Area, we have estimated that the future Primary Zone share for Trade Area residents would increase. In future years, the Primary Zone share has been estimated at 70% for Primary Zone residents; with a 65% Primary Zone share for Secondary Zone residents. Based on the calculations in Figure 3-6, the Primary Zone share of clothing and accessories expenditures derived from all Trade Area residents amounts to $9.6 million in 2014, increasing to $12.1 million by 2031 (expressed in 2011 dollars). Residual potential represents the additional expenditures available from Trade Area residents in the future for clothing and accessories space in the Primary Zone. Including an additional 10% inflow from outside the Trade Area, we have estimated the total additional sales potential available for Primary Zone clothing and accessories stores would amount to $2.3 million in 2014, increasing to $4.2 million by If we allocate the available sales potential and assume some 8,600 square feet of clothing and accessories space is constructed as part of Pearson Plaza, performing at an average sales performance ranging between $300 and $400 per square foot (expressed in 2011 dollars), there would be residual market demand to support additional clothing and accessories space elsewhere in Elliot Lake. These sales performance levels are considered reasonable based on the average sales performance level for this store category in Ontario. After considering the 8,600 square feet of clothing and accessories space proposed as part of Pearson Plaza, there would still be residual market demand, which would warrant up to approximately 8,600 square feet of additional clothing and accessories space in the Trade Area by Recognizing the majority of sales support for clothing and accessories space on the subject site would be derived from future population and expenditure growth in the Primary Zone, any impacts on existing clothing and accessories stores in Elliot Lake are expected to be negligible. In fact, no sales transfers would be required to support the proposed clothing and accessories store space after In Figure 3-6 we have provided an estimate of the potential sales transfers that would occur from existing clothing and accessories stores. A detailed analysis of the impact of the addition of clothing and accessories store space on existing clothing and accessories stores is provided in Appendix F. 20