Off Target

Whitfield County’s retail shopping landscape isn’t barren.

There are scores of small businesses, more than 20 stores at the Dalton Outlet Shops, two Kmarts, two Walmart Supercenters and Walnut Square Mall, which has a slew of shops, including Belk, JC Penney and Sears.

All in a county of some 90,000 residents.

But many of those residents want more shopping opportunities. Best Buy. Dick’s Sporting Goods. Kohl’s. Target.

So far, however, those dominant big box retailers have shunned Dalton.

Why?

There isn’t a single answer, according to economic development experts, but rather a mix of factors, from the recession to banks that have tightened their lending to basic economic axioms.

A significant roadblock to retail development in Dalton and Whitfield County is the national economy. Before the recession hit in late 2007, many large retail companies had already started “quite a lot of building,” said Marilyn Helms, a business professor at Dalton State College. These companies overbuilt to an extent and are now waiting to clear up debt from those stores before building at new locations, she said.

However, banks today aren’t as apt to lend as in years past.

“It’s not that we’re not an attractive market — I’m sure we’re on their radar screen — and many of them already own land in the area or hold options and are waiting until their budgets look better,” Helms said. “What’s happening is the bank lending has hurt a lot of this expansion. Banks have tightened up the credit so if they’re using debt financing, it’s tough right now.”

Target, the Minneapolis-based company, operates almost 1,750 stores in 49 states. The closest stores are in Cartersville and Chattanooga. Company officials have said they are focusing on high density, urban areas such as Chicago and San Francisco and have put the rest of their expansion plans on hold for the next four years. Most experts aren’t forecasting an across-the-board increase in chain openings until 2012 or later.

“It goes back to demand vs. supply,” said Jason Fritz, a retail-commercial development associate with Electric Cities of Georgia (ECG). “If they (Target) can find an underserved area with a growing population they will consider the market.”

The company has minimum population, income, education, age and family size requirements and looks for sites in high traffic areas with excellent accessibility and visibility to major roads, he said. According to information from ECG, Target’s typical customer and demographic requirements include a median age of 41, a median household income of $41,000, 81 percent female customers, 50 percent college graduates and 200,000-plus people in a 10-mile ring.

According to U.S. Census Bureau statistics, Whitfield County has a median age of 34, a median household income of $43,620 and 15 percent of people 25 and older with college degrees.

Fritz said consumer confidence “is probably the leading factor” in expansion. The U.S. Consumer Confidence Index measures how shoppers feel about business conditions. The October index was 50.2. It takes a reading of 90 to indicate a healthy economy. That number hasn’t been reached since December 2007.

“When customers are confident enough to start spending, retailers will follow,” Fritz said.

There are other less noticeable challenges, he said.

“A vacant space in a power center may have an interested retailer, however a co-tenancy clause by the big box retailer might prevent the store from locating there,” Fritz said.

Despite concerns about the economy, some companies are expanding. Discount retailers such as Dollar General and Family Dollar “are thriving in this market,” while supermarkets such as Aldi (which is building a store in Dalton), Save-A-Lot and Whole Foods are also expanding, along with drug stores. Mid-price chains are beginning to expand, Fritz said.

“A good example is Kohl’s, which recently announced they are opening 40 new stores,” he said. “Dick’s Sporting Goods announced a few weeks ago they are in expansion mode and are scouting sites.”

Dalton and Whitfield County officials have begun courting retailers, said Elyse Cochran, director of the Dalton-Whitfield County Joint Development Authority. Although she concedes many companies are not expanding now, it’s important to lay the groundwork and make connections for when businesses begin building again.

“It’s an exciting time,” Cochran said. “You’re not going to see immediate results, but what you can see now and you’ll see in the next 12 months, we will be positioning ourselves so when these retailers are comfortable with making those expansion decisions we’ll be first on their radar. Whereas otherwise, if we did nothing, we may be No. 10 down on the list. We want to be No. 1. We want to be the first store that Target builds.”

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