MuskogeePhoenix.com, Muskogee, OK

Local News

March 2, 2013

Councilors approve $25K for market studies

Supermarket analysis, public education campaign in mix

— Retail development caught the attention of city councilors who authorized expenditures totaling nearly $25,000 for a supermarket analysis and the development of a public education campaign.

The supermarket analysis was suggested by City Manager Greg Buckley, who met with a developer working with a Texas grocery chain interested in expanding its presence in Oklahoma. The developer told Buckley one of the greatest challenges he faced with regard to opening a new market was the lack of funding for site studies.

A market analysis conducted by the city could be used to recruit the unidentified grocery chain or others. The data collected during the supermarket and tenant-mix study, Buckley said, could be used to show prospective retailers how a particular store could perform within the Muskogee market.

Mayor Bob Coburn said Muskogee residents buy $138 million worth of groceries from supermarkets outside the city. That number, calculated by a retail consultant who performed an “opportunity gap” analysis, indicates local supermarkets are not meeting the market’s demands.

“We haven’t had a new grocer come to town, and we have $138 million in leakage,” Coburn said. “Would it not be a logical thing to do to take this study and then go to a potential grocer and say this is the potential market here?”

Coburn described the study as “a proactive approach on our part to attract retail development.” He cited studies that show 92 percent of all retail development is accomplished through incentives. Having this supermarket and mixed tenant study in hand “would make it much easier decision” for a company considering a presence in Muskogee.

Buckley said he sees the $17,000 study to be completed by Retail Research Group as an additional tool that can be used to promote economic development. He told city councilors the analysis “may help move Muskogee up the ladder” for companies where Muskogee already is “on their radar.” It could generate interest among others.

Ward I Councilor Lee Ann Langston questioned the need for the study when much of the data the company will use is “readily available.” She said constituents have expressed concern about the amount of money the city has spent on consultants.

Buckley said an independent study by a disinterested third party with a 20-year reputation would be more credible than an in-house study. Buckley said retail insiders recommended Retail Research Group as one of two with a good reputation.

In addition to the supermarket and tenant-mix study, city councilors approved a second study to develop a strategy to educate residents about the impact of shopping outside Muskogee. The opportunity gap analysis shows Muskogee retailers lose nearly $687 million in sales to stores in other markets.

Coburn said that costs the city about $27.5 million in lost sales tax revenue. That much money, Coburn said, has a real impact on services the city is able to provide and affects decisions regarding the wages and salaries paid to municipal employees.

The development of a public education strategy, which will be conducted by Tulsa-based Cubic Creative Agency at a cost of $7,500, is expected to be completed within 30 to 45 working days. Coburn said educating the public and realizing results could take up to three years.

“You get into the chicken and egg thing here — which comes first?” Coburn said. “Consumers say they can’t find what they want here. But if they shopped here at home, we would have the economy it takes to attract those stores people want to see in Muskogee.”

Cubic’s analysis will include three phases; research, strategy development and presentation. Research will include discussions about regional and national retail trends and best practices with the consulting firm that conducted the opportunity gap analysis.

The strategic phase will include the development of a marketing and media plan to accomplish the educational objectives. The final phase will include the creation of a presentation that can be used to sell the plan.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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