Study: Retailers shun big bucks in black neighborhoods

Study: Retailers shun big bucks in black neighborhoods

By Kimbriell Kelly
Chicago Reporter
(December 29, 2005) During this holiday shopping season, residents of Chicago’s black communities are likely to spend nearly two-thirds of their money outside of their neighborhoods, far more than those living in Latino, mixed or white areas, a Chicago Reporter analysis of consumer market information shows.

In Chicago, the rate of major retailers per 10,000 residents is nearly three times higher in white areas than in black areas, according to the analysis. Some black neighborhoods are home to far fewer retailers than white neighborhoods even when their incomes are similar.

This means blacks in Chicago are likely to spend more time, money and energy than whites when they buy gifts, groceries, clothes, tools and other items at stores located far from their homes. It also means black neighborhoods lose out on billions of dollars in consumer spending each year that could help revitalize those areas. Furthermore, Chicago could be losing millions of dollars in sales tax revenue as many drive to south suburban Calumet City, Lansing and Evergreen Park, among others, to do their shopping.

The Reporter mapped nearly 900 Chicago addresses of companies that Stores listed as the top-selling retailers in seven categories: supermarket, apparel, department store, home improvement, drug store, restaurant, and value retailer, such as Target. Stores, a monthly magazine of the National Retail Federation, the world’s largest retail trade association, ranked the retail companies by their 2004 sales revenues.

The Reporter also examined consumer expenditures and retail sales figures for each of Chicago’s 77 community areas. The data were provided by MetroEdge, a market research firm, for the city’s department of planning. The Reporter defined black and white communities as being at least two-thirds black or white. Asian and Latino neighborhoods were at least 50 percent Asian or Latino. The Reporter found:

* Residents of black communities spend an estimated 64 percent of their consumer dollars, more than $5.3 billion a year, outside of their neighborhoods.

* Among neighborhoods with median household earnings between $40,000 and $50,000 per capita, white areas have 47 percent more major retailers than black areas.

* White neighborhoods have nearly eight times more apparel retailers than black neighborhoods.

* There are three times more major retailers in communities with a median income greater than $50,000 per capita than those where the median is less than $30,000.

Retail consultants said major retailers tend to herd where others have gone. That’s led to a dearth of retail options on the South and West sides. When a major retailer does consider those areas, however, they’re confronted with other issues that prevent them from opening stores there, such as their overall unfamiliarity with the neighborhoods and perceptions about crime, the consultants said.

“The perceptions are usually worse than the reality,” said John C. Melaniphy III, formerly of Melaniphy and Associates, a North Side consulting firm providing site selection and market assistance. “It’s going to take time, but there is going to be more business.”
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Click here for free delivery of the Target Market News Bulletin You'll receive news of breaking stories, exclusives, updates and headlines on the latest developments in African American marketing and media Black Stats Frequently requested data on African American consumers Black Buying Power: $679 Billion (2004) Black U.S. Population: 38.3 million Top Five Black Cities - New York - Chicago - Detroit - Philadelphia - Houston Top Five Black Metros: - New York-New Jersey - Washington-Baltimore - Chicago-Gary - Los Angeles - Philadelphia Top Five Expenditures: - Housing 110.2 bil. - Food 53.8 bil. - Cars/Trucks 28.7 bil. - Clothing 22.0 bil. - Health Care 17.9 bil. Click here for more stats from "The Buying Power of Black America." ______________________ Get quick access to key U.S. Census Bureau Data Click here to go to African-American Census Bureau data _____________________ Copyright `© 2005 by Target Market News Inc.` All rights reserved Business address: 228 S. Wabash Ave. Suite 210 Chicago, IL 60604 t. 312-408-1881 f. 312-408-1867 info@targetmarketnews.com	Study: Retailers shun big bucks in black neighborhoods By Kimbriell Kelly Chicago Reporter (December 29, 2005) During this holiday shopping season, residents of Chicago’s black communities are likely to spend nearly two-thirds of their money outside of their neighborhoods, far more than those living in Latino, mixed or white areas, a Chicago Reporter analysis of consumer market information shows. In Chicago, the rate of major retailers per 10,000 residents is nearly three times higher in white areas than in black areas, according to the analysis. Some black neighborhoods are home to far fewer retailers than white neighborhoods even when their incomes are similar. This means blacks in Chicago are likely to spend more time, money and energy than whites when they buy gifts, groceries, clothes, tools and other items at stores located far from their homes. It also means black neighborhoods lose out on billions of dollars in consumer spending each year that could help revitalize those areas. Furthermore, Chicago could be losing millions of dollars in sales tax revenue as many drive to south suburban Calumet City, Lansing and Evergreen Park, among others, to do their shopping. The Reporter mapped nearly 900 Chicago addresses of companies that Stores listed as the top-selling retailers in seven categories: supermarket, apparel, department store, home improvement, drug store, restaurant, and value retailer, such as Target. Stores, a monthly magazine of the National Retail Federation, the world’s largest retail trade association, ranked the retail companies by their 2004 sales revenues. The Reporter also examined consumer expenditures and retail sales figures for each of Chicago’s 77 community areas. The data were provided by MetroEdge, a market research firm, for the city’s department of planning. The Reporter defined black and white communities as being at least two-thirds black or white. Asian and Latino neighborhoods were at least 50 percent Asian or Latino. The Reporter found: * Residents of black communities spend an estimated 64 percent of their consumer dollars, more than $5.3 billion a year, outside of their neighborhoods. * Among neighborhoods with median household earnings between $40,000 and $50,000 per capita, white areas have 47 percent more major retailers than black areas. * White neighborhoods have nearly eight times more apparel retailers than black neighborhoods. * There are three times more major retailers in communities with a median income greater than $50,000 per capita than those where the median is less than $30,000. Retail consultants said major retailers tend to herd where others have gone. That’s led to a dearth of retail options on the South and West sides. When a major retailer does consider those areas, however, they’re confronted with other issues that prevent them from opening stores there, such as their overall unfamiliarity with the neighborhoods and perceptions about crime, the consultants said. “The perceptions are usually worse than the reality,” said John C. Melaniphy III, formerly of Melaniphy and Associates, a North Side consulting firm providing site selection and market assistance. “It’s going to take time, but there is going to be more business.” Click here to read entire Chicago Reporter story Go to Target Market News homepage	NEW! Search the entire contents of the Target Market News Web site! Looking for hard-to-find information on the African-American consumer market? Now you can easily search the contents of the leading source for information on African-American marketing and media. Scan our entire Web site for news, research and information using Google-powered keyword searches. Hundreds of articles, stories and report findings can be accessed for free. Click here to try it now! _____________________________________________________________________________________ 12th Annual Edition Available Latest 'Buying Power' report shows black consumers spending more on home life As the American economy continues to move sluggishly, African-American households are curtailing their spending in many categories, including food, clothing and basic household items, while investing more in home repair, home entertainment and consumer electronics. Although they are trimming back, black consumers are still spending more than their white counterparts on most of these products. According to the newest edition of “The Buying Power of Black America” report, African-American households are tightening their belts when it comes to dining out, expanding their wardrobes, and leisure activities out of the home. At the same time, they are increasing their spending on home repairs and remodeling, audio and... Story and statistics continued _________________________ SUBSCRIBE TODAY! The trade publication for in-depth coverage of Black Consumer Marketing and Media news ORDER THE WORKBOOK NOW! The sixth annual event examining the latest trends, findings and practices in marketing to African-American consumers Presentations from: America Online Arbitron Inc. Burrell Carol H. Williams Advertising E. Morris Communications Ethnic Print Media Group GlobalHue Hunter-Miller Group Images USA Nia Online NSights Worldwide LLC On Wheels Inc. R.J. Dale Advertising & P.R. Target Market News U.S. Census Bureau ...and more!