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Income Matters for Retail Development but So Does Density

Aug 28, 2024, 09:53 AM by Matt Mowell

It’s well established that retail development follows new rooftops. But what impact does an area’s household income have on retail development?

We analyzed Raleigh-Durham—known as the Research Triangle—to find out. We used a hexagon approach (each shape is roughly two square miles) to depict the distribution of income. Hexagons where the bulk of retail space has been built since 2000 are in white. 

This helps us identify notable clusters of affluence. One is the Cary/Research Triangle Park (RTP) area, which has a combination of high incomes and dense—by North Carolina standards— housing development. Cary/RTP is also a key employment hub, boosting the area’s daytime population. One of the region’s preeminent regional malls, The Streets at Southpoint, is located a few miles northeast of Cary/RTP and also attracts shoppers from nearby Chapel Hill, another affluent community.

But not all high-income hexagons are created equally. North of Raleigh and the new I-540 beltway is a swath of sprawling high-income neighborhoods. However, the population there is not yet dense enough to support substantial retail development. In fact, there are very few shopping centers in this area, including those built before 2000. This could be a consequence of fewer rooftops, zoning or both.

Much of far north Raleigh’s retail development is located further east—near the nexus of Highway 1 and the I-540 beltway. In fact, the development of the I-540 Northern Wake Expressway during the early 2000s has catalyzed new retail construction, which is also drawing patrons from the high-density housing developments sprouting up in the area. A similar situation has emerged southwest of Raleigh, where a population and home construction boom has triggered significant grocery-anchored, community and power center retail construction.

The Raleigh-Durham example illustrates the importance of both housing density and household income to retail development. In coming months, we will further examine how the density of dollars is related to retail activity.

MotM August 2024


 

 

 

 

 

 

 

 

 

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