3. Retail Demand Analysis

Retail demand within an area is generally driven by residents, employees, and visitors. Retail preferences for each of these consumer groups vary, however, they typically demand retail goods and services that are accessible to them.

To comprehend the demand for retail in the area, an analysis is performed to obtain insights into consumer spending, the overall supply of retail, and sales figures. These metrics are crucial for gauging the existing and future performance of retail stores across different categories.

This retail demand analysis is conducted for the Pioneer Square District Secondary Trade Area, which is where retail is likely to draw from residential and employee customers.

Below is an overview of the demographics within the Pioneer Square Secondary Trade Area. Population, household, and housing trends are documented to set the context for the retail demand analysis.

The Pioneer Square Secondary Trade Area had a population of 5,839 in 2022. The Secondary Trade Area experienced an increase in population from 2010 to 2022 with the addition of 753 new residents. These new residents have increased the area’s population by 15 percent since 2010.

The Secondary Trade Area had 2,566 households, as shown in Exhibit 12. Since 2010, the Secondary Trade Area has added 642 households increa the overall household count by 33 percent.

In 2022, the Secondary Trade Area had 2,979 housing units. Since 2010, the area added 885 housing units an increase of 42 percent. Although the Secondary Trade Area saw an increase in housing units, a 2022 housing analysis study found that there was a concentration of subsidized housing units in the area that has created challenges in creating an urban neighborhood that supports a range of housing types for families, seniors, and young adults.

Demand for retail in the Pioneer Square Secondary Trade Area is measured through consumer expenditures. Typically, workers spend around 5 to 10 percent of their disposable income near their places of work (lower-income workers spend a higher proportion of this income). Examining consumer expenditures can provide insights into the demand for retail store types. Exhibit 15 below, shows that under current conditions (Low 30% scenario), there is a surplus of retail supply across all categories, meaning additional retail services are not demanded in the area. The exception to this is furniture and home furnishing stores where there exist a gap and as a result demand for this retail store type in the Secondary Trade Area. Analysis indicates that retail demand and retail market potential in the Secondary Trade Area are extremely sensitive to what future employment looks like because employees represent such a large segment of overall demand.

In the high return to work scenario (70 percent of pre-pandemic employees returning to work) there is a greater demand for more retail and services, specifically for food and beverage services. These services can help support street-level activation throughout the Secondary Trade Area. Adding additional new housing to the district also increases overall demand for retail and services throughout the Secondary Trade Area. This analysis suggests that in order to support new and existing retail and service businesses in Pioneer Square, district stakeholders will need to support a four-prong approach to increasing demand to support more ground-floor activity and services:

1) Encourage workers to return to in-person work, especially for larger employers in the district.

2) Support new business and employment growth to fill vacant spaces and add additional worker demand.

3) Add new market rate and workforce housing to add more residential population to support more demand.

4) Increase visitor traffic to support businesses.