An economist hired by a Southampton Village citizens group told the Southampton Town Board last week that the addition of a third grocery store within the village limits will boost business at retail stores throughout the village, and could even bring more shoppers to the two other village grocery stores, Waldbaum’s and Schmidt’s Market.
But economist Robert Gibbs also said that if a grocery store or supermarket were to be built outside the village limits—in particular on the main thoroughfares east and west of the village—it could negatively impact village businesses greatly.
Mr. Gibbs told board members and an audience of village residents and officials on Thursday, September 19, that a grocery store on County Road 39 up to 3 miles west or 2 miles east of the village could reduce the number of cars traveling into the village by 40 percent. That reduction in visits to the village could cause declines in business at the village’s retail shops by up to 15 percent, and at the village’s two existing grocery stores by up to 20 percent.
“It would have a very quick negative impact on both the grocery stores and the retailers in the village,” Mr. Gibbs told the board. “It would be especially devastating in the offseason.”
Mr. Gibbs was hired by the Southampton Association to conduct the analysis of the village’s retail sector and the impact that a third grocery store would have. The study was commissioned in response to an application by the owners of the former Glennon Buick Cadillac dealership at the intersection of Hampton Road and Flying Point Road to construct a Fresh Market grocery store inside the village but near its eastern border.
Since Mr. Gibbs undertook the study, Citarella has announced that it will be opening a gourmet market in a former retail mall at the downtown end of Hampton Road, its third South Fork store. That project won approval from the village in May and is slated to open in the spring of 2014, according to John Bennett, the Southampton-based attorney representing the applicant, Hampton Road Realty, this week.
Mr. Gibbs, in his presentation, never specifically referred to Citarella, since his study looked at a generic third grocery store that had not yet been proposed.
The association also asked Mr. Gibbs to look at the impact that a supermarket just outside the village, on one of the main thoroughfares, would have, in light of the proposal before the Town Board now for a King Kullen supermarket and 15,000 square feet of accompanying retail shops at the intersection of Magee Street and County Road 39 in Tuckahoe, not far from the village border.
The Michigan-based economist said his analysis included demographic studies and mapping of areas that potentially send customers to village stores. Among his other findings, Mr. Gibbs said, his figures showed that despite the proliferation of vacant storefronts, the village’s supply of potential customers also could support a substantial expansion of its retail district, by 20 percent or more—some 110,000 square feet of space on top of the 500,000 it already has.
Despite the added competition of a third grocery store, the existing stores can expect to see a growth in business if each is able to differentiate their product from that of the other two, Mr. Gibbs said, because a third store would attract more people to the village from a larger area. Customers, once in the village, are willing to make multiple stops for a variety of items, at more than one grocer as well as at other village businesses.
“This is very common—people will go to the grocer and while they are in the village they will make other visits,” Mr. Gibbs said. “If they are 3 miles outside the village, they are more likely to just go to the grocer and go home again without going out of their way to make other visits.”
Supervisor Anna Throne-Holst suggested that the town conduct a similar study specifically for the King Kullen proposal, using some additional factors that Mr. Gibbs might not have accounted for in his own analysis, such as transportation factors.
Developer Robert Morrow, who proposed the two versions of the King Kullen development that have been considered by the town, said he was not familiar with the study presented to the town this week, but that two representatives of his company were at the presentation. His original application, which included 100,000 square feet of retail stores, restaurants and a bank branch, as well as a dozen apartments, included a marketing study that showed ample demand for a new grocery store in the area. “It showed, overwhelmingly, that the area could support another supermarket,” he said.
But the study did not look in depth at what impact the development might have on businesses in the village. Village businesses owners led the opposition to the original plan, which was rejected by the Town Board, but have been largely quiet about the current proposal.