Corporate chains impact local growth

by Cole Dittmer
Wednesday, July 25, 2012

With the recent surge in boutique corporate food markets and restaurants opening locations in Wilmington that are in direct competition with pre-existing, independently owned businesses, city officials and local economists like Dr. Woody Hall are hopeful the southeastern North Carolina market can support both groups. Despite the fact that Tidal Creek Co-op, Lovey’s Market and Flaming Amy’s are experiencing the introduction of competitors like Whole Foods, Trader Joe’s and Chipotle, Wilmington Mayor Bill Saffo believes the introduction of these businesses will provide the Wilmington area with continued growth.

"It is competition, but at the end of the day, it is healthy for the economy and these stores have the right to open here if they think our market is a good place," Saffo said. "As somebody who has owned a small, independent real estate company I can see the concerns smaller businesses would have, but a lot of small businesses thrive and continue to thrive in the Wilmington market because of their products, service delivery, food quality or their personal relationships they have established with customers here."

The addition of national chains, which are more prevalent in other urban North Carolina areas of North Carolina and elsewhere along the East Coast, will also impact and help to increase the number of people moving to Wilmington, Saffo said.

"For those people moving into the area, those people are looking for shops or stores they used to shop at back wherever they came from," he said. "We are finding now that you can do a lot of the shopping locally, which makes the area even more attractive."

Saffo admitted that he was surprised Wilmington has been able to draw these businesses despite the sluggish economy, but that it is a direct result of the continued growth the city has experienced throughout the last few years.

"Our area continues to grow even with one of the worst recessions in American history, maybe not as much as it used to, but we still have a population that continues to grow in size," Saffo said. "The projections are that it will continue to do so, and that is why a lot of these companies look at possibly moving here."

Dr. Woody Hall, senior economist at the University of North Carolina Wilmington, said the decisions corporations like these make about where to open new locations are based on extensive market research analysis.

"Evidently they see some opportunities here … probably because they have seen how Tidal Creek has done, how Lovey’s Market has done and how Flaming Amy’s has done," Hall said. "Those decisions are not made lightly."

Regarding the future, Hall said the fate of the independent businesses would rely on how much the market in southeastern North Carolina continues to grow.

"I think in the intermediate run it is going to give the citizens of southeastern North Carolina and the visitors to southeastern North Carolina a greater array of retail stores to visit," he said. "Beyond the intermediate run is where we may see some shake out, and the shake out will probably affect businesses like Tidal Creek, Lovey’s Market and Flaming Amy’s first."

The loyalty of their customers is one of the things Hall said local businesses will need in order to survive the influx of corporate chains into the Wilmington area.

"They have a local clientele that is probably going to stay with them for a while," he said. "If the economy improves everything should probably survive, but it is going to be some tough times initially for small mom and pop stuff."

Saffo said it is hard to tell what the balance between independent and corporate businesses will look like in Wilmington’s future, but one thing that is certain is that the dynamic will not remain the same.

"Cities have to continue to grow, counties have to continue to grow and businesses have to continue to move into a particular area — that is part of the evolution of our area," he said. "It is not the same community it was in the 60s, 70s, 80s or 90s, and I’m sure it will not be the same community in the next 20 years."

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