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Are we ready for restaurants and retailers?

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County faces uphill challenges for attracting business

By Brent Schanding

 

EDITOR’S NOTE: Earlier this month, the LaFollette Press launched
“Envision Campbell County” — a campaign to attract big-box
retailers, restaurant franchises and other businesses to the area.
We issued a reader challenge by asking our more than 2,100 Facebook fans to identify businesses you’d like to see here. 

In all, The Press garnered more than 258 responses (a full list appears in today's print editon of The LaFollette Press)
The Press contacted several of those businesses in an attempt to connect them with you — their potential
consumer.

This story addresses certain challenges that business recruiters face in luring
retailers, restaurants and other businesses to Campbell County  and  aims to explain why you likely won’t be sipping that venti-iced non-fat mocha from your
local LaFollette Starbucks, anytime soon. 

 

Campbell County consumers must drive roughly 70 miles roundtrip to shop at the nearest Target, on Clinton Highway in Knoxville. That’s a long commute for Sherry Bartley Wright,  Deborah Jones, Crystal Lewallen Hicks—and 38 others—who overwhelmingly identified the store as the No. 1 business they’d like to see in Campbell County.  

While they and others would love to see big-box retailer in Campbell County, it’s unlikely Target will aim its iconic bullseye franchise here anytime soon. 

And unfortunately, we may never know why. 

A media representative for Target spoke briefly with the LaFollette Press on Monday, but failed to follow up with relevant information on if and when they’d ever locate here — or how the company selects future sites. 

Such secrecy from big-box retailers is common but frustrating for those tasked with luring them to the area. 

“The biggest obstacle is understanding the retailers’ needs and models,” said E.L. Morton, executive director for the Campbell County Chamber of Commerce, who regularly engages both big and small businesses to help them succeed here. 

But Target isn’t the only tight-lipped retailer when it comes to its operations. 

Spokesperson Joe Bell from Cincinnati, Ohio-based grocer Kroger, Co.—another business highly desired by those in our social media survey—failed to respond to e-mail requests from the LaFollette Press about future operations. 

While other retailers and restaurants expressed pleasure that Campbell Countians desire a local presence — none expressed interest in locating here anytime soon. 

Instead, representatives from each business cited confidentiality clauses in discussing their future planss. Nevertheless,  big-box retailers, chain restaurants and others looking to relocate do often gauge the market for and consider factors before finalizing a deal. 

 

WHAT THEY’RE LOOKING FOR

“Retailers are watching our spending habits and have a running tally of—not necessarily our community—but more so our demographic spending groups,” Morton said. “If a community hits those marks, most often the retailers are coming.” 

Morton said larger retailers spend hundreds of thousands—if not millions—to measure our spending habits.  

“Private consultants provide these types of services for commercial property owners, groups and municipalities on the order of $25-50,000 per project,” he said. 

They often track ZIP codes from credit card swipes to determine retail spending habits—and sometimes even eye license plates in crowded parking lots, to see where consumers are traveling from. 

The least costly way to track consumer spending habits is by monitoring U.S. Census data, Morton said, and working closely with state and federal agencies to conduct case-by-case and long-term analysis.

If Campbell County consumers want to show retailers and restaurants this is a growing base of consumers, there’s one great way. 

“Eat out more often,” Morton said. 

Money talks to entrepreneurs, so they often look for patterns of consistent spending at existing businesses and restaurants. 

However, Morton said he understands the reality of family budgets and secondary spending priorities often take a back seat to bills and savings. 

“That makes the case a bit more challenging,” he said. 

In addition to our local pocketbooks, retailers also look at population densities, accessibility and traffic patterns. They typically want to know how many people drive or walk past a certain site—and if it’s served by public transportation. 

The larger Knoxville-Sevierville-La Follette metropolitan area boasts a population of more than 1,055,000, according to 2010 Census figures. But it also draws from heavily trafficked Interstate 75, which serves millions of additional travelers through Campbell County each year. 

So with its proximity to both the interstate and a sizable metro area, Caryville—situated conveniently on two I-75 exits—should be a prime target for development. 

However, there are limitations in that area. 

For starters, it’s mountainous and large tracts of land suitable for major retailers aren’t easily acquired there, according to past reports from elected town officials. 

Those tracts are also mostly privately owned. Without property of its own, the town of Caryville can’t offer many additional economic incentives for businesses seeking to locate there, according to town officials. 

“It would be good if we could get with the realtors and get them to provide us with their information as far as promotional properties that are available,” said Billie Russell, LaFollette city administrator, who formerly served as an industry recruiter for the county. “We could have an inventory. You can’t market yourself, if you don’t know what you have.”

But there’s also other challenges to landing businesses here, she said.  

“The issue of being able to serve alcohol has been a barrier to recruitment,” Russell said. “Nine times out of 10 [industry executives] say, we need a good sit-down restaurant. They don’t want to take clients to McDonald’s—they want something a little nicer. They want somewhere to have a drink.”

But county laws establish rigid guidelines about how many seats a restaurant in Campbell County must provide before it can serve alcohol. Those laws also place restrictions on wine and liquor sales and limit the sale of alcohol on Sundays. 

It’s a major reason why restaurants such as Applebee’s, Cheddar’s or Texas Roadhouse—all ranked highly on Campbell County consumer’s wish list—likely won’t be opening a site here anytime soon. 

There’s also a lot of other competition to attract these chains.  

And because of local economic development challenges, Campbell County often loses out to surrounding counties — including Anderson, Knox and Sevier counties—which can provide more space, better financial incentives and less red-tape restrictions. 

“Leakage reports indicate Campbell County residents spend some $4 million a year in other counties for women’s clothing alone,” Morton said. “Our food service leakage is on the order of at least half of that.”

That means Chik-fil-a— also identified by LaFollette Press readers as one of their favorite fast-food franchises—could have a slice of at least a $2 million pie if it added a Campbell County site. 

Russell said she has contacted Knoxville-based management of Chik-fil-a  and is working to recruit the chain here. And since the fast-food restaurant began saturating the Knoxville market, Russell eventually expects it to expand into outlying areas, such as Campbell County. But Chik-fil-a representatives would not confirm future plans with the LaFollette Press. 

 


BE A GOOD NEIGHBOR

Business experts note that some retailers and restaurants could be deterred or swayed by existing retail and restaurant sites here. 

For example, Kohl’s and Ross — each named by Campbell consumers as desirable retail outfitters—may not be successful next to a discount variety store or a hardware store. But place them next to other clothing retailers, such as our existing Goody’s store, and they may have a better chance of turning a profit. 

“I did call Marshall’s [about six months ago],” Russell said.  “And their regional manager had promised me he would come and meet with me when he was in this area. But I’ve never got to meet with him yet.”

A representative for Marshall’s couldn’t be reached by press time.  

Despite these and other setbacks in attracting big-box retailers, business leaders say there’s opportunity for existing small businesses to expand. 

Russell said since taking office as the new city administrator earlier this month, she’s already been engaging with downtown merchants to revitalize LaFollette by adding additional businesses. 

“I think there is an opportunity there,” Russell said. “Three or four merchants have asked me to get [another] place to eat downtown. I think there’s room for cafes and businesses downtown.”

Decades ago, downtown LaFollette offered several vibrant business, she said.  

“We had a grocery store, we had clothing stores, a little 5- and 10-cent store. Everything was in walking distance,” Russell said. “We could walk anywhere we needed to.”

But it’s not an option there now, she said. 

“I think if we can get some businesses downtown and it be what meets the people’s needs—I think we can draw a lot of people to the downtown area.”

Main Street revitalization grants and other funding sources could help fund the city’s vision, Russell said.

“But first, I think you have to target an area,” she said. “We need to concentrate on that and do it in phases. Once you’re successful with the first phase, you get the buy-in and support for continuing. I want to work on an overall strategy for the city.” 

Morton adds, it will also take more education on the importance of building a better community through business. 

“Everyday some child spends money for the first time. It is important that we teach new and long-time consumers over and over that these revenues are how we build our schools, roads, parks, libraries, fire and police departments, emergency services and more,” he said. “When you spend outside the community, ideally it is for something you cannot get here. Those dollars are the responsibility of every taxpayer who can make the choice to buy and build community locally—in every purchase.”