National retailers and restaurant chains are popping up throughout Northwest Arkansas. CVS Pharmacy plans three stores in the area while Dunkin' Donuts will open in Fayetteville, its second Northwest Arkansas location.
Dwight Hill, managing director of The Retail Advisory, said as an area's population grows, so does the number of businesses looking to expand into that region. The Retail Advisory is a retail management consultancy based in Dallas.
Enough Retail?
Below is a selection of the area’s highest and lowest “location quotient” scores in the retail and services sectors. The chart shows local changes in the quotient from 2001 to 2013. Location quotient scores show the concentration in an area of certain types of businesses compared to the national average. Scores of less than one show where concentration falls below the national average.
Business sector 2001 2013
Overall retail 0.94 1.03
Convenience stores 0.46 0.12
Computer and software stores 0.55 0.40
Men’s clothing stores 0.13 0.43
Hardware stores 0.55 0.51
Pharmacies and drug stores 0.46 0.74
Sporting goods stores 0.78 1.64
Prerecorded music stores 0.97 1.65
Used cars dealers 2.31 1.83
Cateterias and buffets 0.79 2.1
Warehouse clubs and superceners 3.97 2.48
Source: Northwest Arkansas Council
"Generally companies start with identifying their customer, where their customer is located and their customer's shopping habits," Hill said.
Once the company identifies those attributes, it analyzes metropolitan statistical areas and determines locations based on traffic patterns, existing shopping centers and even competitor locations, he said. Northwest Arkansas' Metropolitan Statistical Area includes Washington Benton and Madison counties in Arkansas and McDonald County, Mo.
Despite recent growth, Mike Harvey, chief operating officer of the Northwest Arkansas Council, said the area could use even more retail options.
"We are underserved when compared to national retail concentration numbers," he said. "We have a ways to go, but I think we would be considered a great opportunity for many types of businesses looking to break into new markets."
Harvey points to a calculation called location quotient that shows how concentrated an industry is in a region and compares it to a national average. Any industry with a location quotient score below one falls short of the national rate.
The area's overall retail location quotient was 1.03 last year, up from 0.94 in 2001.
Potential areas of growth can be spotted when examining individual sectors. For example, the area's location quotient was 0.72 for shoe stores and 0.43 for men's clothing.
The rating shows women's clothing stores are above the national average with a 1.1 rating.
Harvey said the opening of Pinnacle Hills Promenade helped fill some of the need. The Rogers mall is an outdoor retail complex. The Promenade has more than 100 retailers and restaurants just off Interstate 540.
Brenda Majors, Pinnacle Hills Promenade marketing manager, said the shopping center will welcome new retail brands later this year. She declined to give details.
"Not only are we attracting new businesses to this area, but we are also getting second looks from businesses that passed us over before," she said.
Hill said many national chains set a population benchmark before it will even consider entering an area. The population guidelines differ from business to business. Numerous companies declined to provide specifics about how they decide where to locate, but several pointed to growing population as key.
The U.S. Census Bureau listed the local statistical area's population at 482,200 on July 1, 2012, growing by more than 8,000 people a year.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said the area's size may attract some new businesses, but does not yet have the concentrated population or income levels needed to pull in certain high-end retailers such as Nordstrom.
Brooke White, Nordstrom spokeswoman, said the department store chain does look for a certain population and demographic mix. The company has an aggressive growth plan for opening more Nordstrom Rack stores, the chain's clearance and off-price division. A Nordstrom Rack will open at Woodland Plaza in Tulsa, Okla., on April 3.
Rumors of Macy's opening up a store locally circulate every few years, but a spokeswoman with that company said it has no new store announcements for Northwest Arkansas.
Cabela's decided to open a Northwest Arkansas store in August 2012 after studying catalog and internet sales to determine where customers live and what they buy, said Wes Remmer, company spokesman. The outdoor retailer is considered by many in the industry to be a destination retailer, meaning it draws in customers from outside the area.
"We also like to be visible and easily accessible to our customers, meaning certain sites offer special appeal," Remmer said. "When we looked at Rogers, all the criteria came together, and it became an easy decision to open our first Arkansas location."
The local store is located at 2300 Promenade Blvd. in Rogers, just off I-540.
High-traffic areas are important to many types of businesses, even when it creates a concentration of one type of business in one spot, Hill said.
"Look at CVS, Walgreens and RiteAid. There are times you will see those guys on three of four corners together," he said. "Often it's because of traffic count and population density."
A proposed CVS store in Springdale will be built at the corner of Thompson Street and Robinson Avenue. A Walgreens is across the street and Walmart is just a block away. A Fayetteville CVS site is at the northeast corner of Township Street and College Avenue, also across the street from a Walgreens. The Bella Vista CVS store is under construction at the intersection of Bella Vista Way and Mercy Way, near the Mercy Medical Clinic.
"Our criteria for new store sites are highly visible, easily accessible and well trafficked locations that are convenient for our customers," said Michael DeAngelis, CVS spokesman.
Hill said it is not unusual for a chain to open more than one store in a new area in a short time.
"It is more cost effective to open multiple stores from a supply chain perspective," he said. "It doesn't make as much sense to have to resupply just one store. That is why chains will take a real methodical approach before opening that first store."
He used fast food chain In-N-Out Burger's entrance into the Dallas market as an example. He said the chain opened with a force about three years ago with seven locations. The company has since opened up a distribution center in the Dallas area.
Casey's General Store has grown to 17 locations in the two-county area in just a couple of years. The convenience store chain has 1,783 stores in 14 states. The first Arkansas store opened in Bella Vista in 2011.
Brian Johnson, Casey's vice president of finance, said more than half of the company's stores are in towns with a population of 3,500 or less, but Northwest Arkansas has proven to be a good fit for the brand.
"We like to be in healthy, growing areas. I would say our growth in Northwest Arkansas has been relatively quick, even for us," he said.
Kum & Go is also expanding its Northwest Arkansas footprint. The West Des Moines, Iowa-based company entered the local convenience store market in 1998 when it bought 7-11 stores in the area. The company built its first store in September 2007 in Lowell. It now has 17 stores across the area.
"Due to the rapid population growth in Northwest Arkansas over the past 10 years, this has become a primary market for Kum & Go," said Traci Rodemeyer, company spokeswoman. "We are also in the process of remodeling or rebuilding several of our older assets to keep our brand strong and consistent throughout our stores."
She said two new stores will be built in Fayetteville and a Lowell site will be rebuilt this year. Kum & Go has 420 stores in 11 states.
Restaurants are continually sprouting here. LongHorn Steakhouse opened in mid-March near Best Buy at the Pinnacle Hills Promenade in Rogers.
"The area is home to some of our sister brands, like Olive Garden, and has the kind of expanded residential and retail presence and access to a strong business base that we look for in potential locations," said Erica Ettori, LongHorn spokeswoman.
Also opening later this year near LongHorn Steakhouse is Twin Peaks. Dunkin' Donuts is opening a second Northwest Arkansas location. The new site will be on Martin Luther King Jr. Boulevard near the corner of Beechwood Avenue in Fayetteville.
Freddy's Frozen Custard & Steakburgers is also opening a pair of area restaurants: the southwest corner of Wedington Drive and Salem Road in Fayetteville and across from McDonald's in the Scottsdale Center in Rogers.
A spokesman for Whataburger would not comment on rumors of the company opening a Fayetteville site.
"Whataburger is consistently looking at new locations to better serve our customers. There are a number of factors that go into our decision to build a new restaurant and if we ever do decide to open a restaurant in Fayetteville, we'll be happy to share the news at the appropriate time," James Turcotte, senior vice president for Whataburger Real Estate, wrote in an email.
NW News on 03/23/2014