BRISTOL, Tenn. (WJHL) – The Pinnacle in Bristol is booming with an ever-growing array of stores and restaurants.
Meanwhile, developers for Boones Creek in Johnson City and Tri-Cities Crossing in Kingsport are trying to recruit new retailers. But can they compete with the Pinnacle? And will we ever see beloved big box stores like Costco break ground here?
News Channel 11 asked two experts from national retail firms to weigh in- John Ruzic, Portfolio Director for Retail Strategies, and Austin Farmer, Profile Director for The Retail Coach. Both have familiarity with retail development in Tennessee and the Tri-Cities area.
How can newer retail developments compete with the Pinnacle?
RUZIC: “New centers certainly have a chance to attract major businesses and retailers. But like I said, a number of factors have to fit those retailer’s needs.”
Those factors? Demographics, lease rates, access, and visibility. It also comes down to what other retailers are nearby.
RUZIC: “Other retailers are going to want to know, who’s already at the party? Before I commit to it, who’s there?”
FARMER: “I think for the most part, it’s going to be hard to duplicate what you see at the Pinnacle and some other larger retail sites just around the area.”
Why do retailers typically choose to locate in already-developed sites?
FARMER: “You may notice with retailers, nobody wants to be the first mover, so they typically want somebody else to go first.”
This might explain why Tri-Cities Crossing has taken so long to grow. This site and Boones Creek might need a big anchor store to sign on first before smaller retailers move in.
RUZIC: “A larger and well-known big box tenant is more likely to attract a larger group of consumers to shop. So again, the more people you have, the more people that are likely to come in and make a purchase in your store.”
Once the Pinnacle landed Bass Pro Shop, other stores flocked around it. Boones Creek and Tri-Cities Crossing are likely looking for that same type of major tenant.
A lot of people in the area want to know- what are the chances we’ll see a Costco locate here?
RUZIC: “As far as Costco, they need a minimum population of 300,000 within five miles. I know the Tri-Cities does have a population of half a million or so, but that’s going to be spread out over a large area.”
The Tri-Cities doesn’t have the population density Costco currently requires to locate in an area and build a new store, even around a retail hotspot like the Pinnacle. Other big names like IKEA are the same way.
FARMER: “[IKEA is] going to want a market that has upwards of 2 million people within a 30 or 40 mile radius.”
Retailers also look at the number of corporations with high-paying jobs in an area.
FARMER: “If you see a shift in demographics to where people have more disposable income that they can spend on retail goods, those kinds of things move the needle.”
These experts say it would take huge population growth or exceptionally low lease rates to bring in these businesses, or create a second major regional development in the Tri-Cities.
So is significant development for Boones Creek and Tri-Cities Crossing still possible?
RUZIC: “Yeah, I think it could definitely be possible. If they get commitments from tenants then I think it would absolutely be possible.”
According to Farmer, you’re more likely to see smaller-format stores go to these sites. But he says that’s where the future of retail is headed anyway.
FARMER: “I think you’ll see new opportunities as retail continues to evolve out of these super-regional centers and out of these larger developments. And I think that’ll just naturally impact what happens with some of these pending developments. You’ll see them reflect the change in the market. And you’ll see some smaller-format stores and some things like that, that you probably haven’t seen before.”
These experts say nothing is impossible in retail development, but some things are more likely than others. In the end, it’s not about what retailers the Tri-Cities wants. It’s about what retailers want the Tri-Cities.