Metroplan releases economic review, points to challenges for retailers with emergence of e-commerce | Arkansas Blog

Wednesday, January 3, 2018

Metroplan releases economic review, points to challenges for retailers with emergence of e-commerce

Posted By on Wed, Jan 3, 2018 at 9:52 AM

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Metroplan
, the regional planning agency based in Little Rock, has released its 2017 Economic Review and Outlook, the latest edition of its biannual "Metrotrends" newsletter, with a focus on the "changing face of retail."

"With slow job growth and low unemployment, the Little Rock region’s economy is stable but lacks dynamism for the moment," the publication finds. 

The report issues a warning about the potential for empty storefronts with the emergence of e-commerce:

The Little Rock region is traditionally a retailing center. For decades, Little Rock and North Little Rock were known for their malls and sophisticated shops. Later the big-box stores arrived. Shoppers from many parts of the state converged on the region, especially during the holidays. The area has consistently shown a higher-than-average concentration of business activity in retailing.

When population began migrating outward from the central cities, retailing gradually followed. The first suburban growth was in Sherwood and Jacksonville, and later Maumelle. From the late 1980s onward, migration to outlying counties increased. Saline, Faulkner and Lonoke Counties boomed as bedroom communities. Retailing followed, first with grocery stores and restaurants, and later major centers opened, too. With populations well over 100,000, Faulkner and Saline Counties now host national name-brand big-box chains, and many small retail options. In recent years almost all the net growth in retail sales has been in these counties. Pulaski County retail sales have been essentially flat, actually declining after inflation adjustment.

Local employment in retailing has continued climbing, and accounts for over 11 percent of all jobs. National retail employment, by comparison, has almost stopped growing, and its job share has declined from over 11 percent in 2012 to 10.8 percent in 2017. This may suggest the e-commerce  revolution—and its impact on jobs—has been tardy hitting Central Arkansas retail markets. National trends are worrisome, with e-commerce growth putting up to 1.5 million jobs at risk over the next five years. In the past three years major new retail centers have opened in Conway, southwestern Little Rock and (most recently) in Benton. Given national trends and local statistics, local retailing may be over-built, and a down-shift could be imminent. 
Here's more:
Like many regions, Central Arkansas faces potentially disruptive changes to its sizeable retail trade sector. Distinctive high-quality retailers will thrive, but large portions of the retail industry as we know it are threatened. Many acres of commercial land now devoted to shopping may need to be re-purposed within just a few years. There will be a growing risk of vacancy, and the urban decay which often follows. Where local codes are sufficiently flexible, however, there will be redevelopment opportunities on former retail sites, possibly involving multi-family housing and lower-intensity retail within mixed-use formats.
E-commerce presents opportunities as well, Metroplan argues, for business that can adapt and take advantage of the potential for growth through online sales and partners. Three such local retailers — Splashwear Aquatics, CocoaBelle Chocolates, and McClain & Co. — are spotlighted in the publication. The growth of e-commerce could also represent opportunities for the cyber-security industry, according to Metroplan, where "the region holds a niche in a vital field" and "has a demonstrated competitive edge. ... There will be similar spinoffs and opportunities in the data and business service sectors, which are traditional Central Arkansas strengths."

From Metroplan's press release, some other highlights:

• Retail accounts for the majority of commercial land use - 57 percent in Pulaski County.

• The Little Rock metro area remains in a pattern of slow economic and population growth, with low unemployment.

• Demand is strong for highly-skilled workers, and for unskilled workers willing to accept low wages, but there is a lack of jobs in the middle range of pay and skill.

• Areas of local strength have included education, health and social services, and trade.

• In early 2017, the total number of new units starting construction in the Little Rock region jumped to its highest level in seven years, especially multi-family construction.

• The average value of a new home continued increasing with a median of $190,099 in 2016, the highest yet recorded. The size of newly-built units also climbed in 2016 to a median of 2,775 square feet.


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