New study finds robust hospitality market, cites eye-opening 250%+ increase in residential income and retail spending potential downtown since 2000
(INDIANAPOLIS, Ind., May 15, 2019) The future looks bright for current and potential retailers across downtown Indianapolis, according to a report being released by the Indy Chamber in partnership with Downtown Indy Inc. today at an event aimed at kick-starting a new retail development initiative, dubbed ‘BuyIN.’ The study, conducted by Chicago-based real estate research and advisory firm Hunden Strategic Partners (HSP), found that the total retail spending power of downtown residents, employees, students and visitors has exploded from less than $200 million in 2000 to eclipse a half-billion dollars last year, on the way to a projected $650 million by 2024.
“This analysis confirms the economic power – and potential – of the retail sector in the heart of Indianapolis,” said Indy Chamber President & CEO Michael Huber. “It also highlights the need to encourage diverse retail options, to keep up with demand and attract new residents, visitors and employers downtown.”
“Downtown Indy’s growing density and walkability create distinct opportunities for retailers to meet the needs of our increased number of residents, workers and visitors,” said Sherry Seiwert, president and CEO of Downtown Indy, Inc. “Therefore, we originally commissioned the study to gain a better understanding of the purchasing power of those demand-drivers moving to Downtown. Clearly, there is great opportunity for retailers here in Downtown.”
In total, HSP estimates that the average daily number of downtown Indianapolis residents, visitors and employees has increased from roughly 200,000 in 2000 to nearly 240,000 in 2018. Approximately half this increase comes from residential growth; notably, the total personal income of downtown dwellers has skyrocketed from $1.5 billion in 2000 to approach $4.5 billion today.
“As downtown has grown, the retail market has changed, too,” explained Catherine Esselman, Senior Project Manager for Indianapolis economic development at the Chamber. “Obviously there’s overlap in the needs of visitors, employees and visitors, but the evolution of the residential market creates more buying power and new kinds of opportunities.”
The report notes that grocery options, long seen as a ‘missing link’ to convenient downtown living, have expanded to largely serve the Mile Square and surrounding neighborhoods. However, significant demand still exists for general merchandise retailers, home and garden suppliers, furniture stores, auto parts and accessories and a few other categories to conveniently meet the daily needs of the downtown community.
“Downtown is so dynamic that there are certain to be mismatches between retail supply and demand,” Esselman added. “But identifying these gaps is the first step to developing strategies to help close them.”
Other key findings of the “Downtown Indianapolis Retail Spending Power” study include:
- Strong residential and business growth – including 100+ new tech companies locating in the urban core since 2000 – has pushed the boundaries of “downtown” beyond the Mile Square, taking in IUPUI and 16 Tech, upper Mass Ave and other areas within two-and-a-half miles of Monument Circle;
- Employees continue to commute downtown in growing numbers and make up a plurality of the daily downtown population, but residents and overnight visitors have shown faster gains since 2000;
- As implied by the significant jump in total personal income, recent residential growth in downtown has skewed towards higher income households (and smaller families) – the median downtown income has grown from $25,922 (2000) to $57,258 (2018), increasing retail buying power accordingly;
- Retail spending by ‘day trip’ visitors (attracted downtown primarily by events and recreational activities) has more than doubled since 2000, hitting $100 million in 2018;
- Downtown continues to see strong hotel occupancy rates driving significant retail spending by overnight visitors, more than $150 million in 2018;
- Projecting hospitality trends and a strong pipeline of major events scheduled for downtown venues, HSP estimates an additional $100 million in annual oversight visitor retail spending in 2024.
Huber linked the latter two points to the Indy Chamber’s support for sustainable funding for the Marion County Capital Improvement Board and expanded hotel and Convention Center capacity.
“The data justifies continued optimism for our convention and tourism sector,” he noted. “But we need appealing retail and recreational amenities, more hotel rooms and available event space to turn these projections into positive economic outcomes.”
To help retailers capitalize on downtown growth – and support a climate that continues this growth among employees, residents and visitors alike – the Chamber is partnering with the City of Indianapolis to use the report as a starting point for BuyIN: Advancing Indy’s Retail Strategy.
The BuyIN launch takes place this evening at Helium Comedy Club at Circle Centre Mall, mixing a discussion of retail programs and priorities – including an update on the St’Art Up 317 retail and art pop-up shop initiative in collaboration with PATTERN – with “food, drinks and laughs,” according to Esselman, who will oversee the new effort at the Indy Chamber.
“Our partners at Visit Indy and Downtown Indy focus on hospitality and downtown vitality, and there are a number of initiatives aimed at specific high-tech industry clusters,” said Huber. “But we can’t overlook the symbiotic relationship between retail development and broader economic development – that’s where BuyIN comes in, and where Cat’s efforts will make a real difference.
“From selling daily necessities to supplying great shopping experiences, quality retail is part of quality of life,” he finished. “Our goal is business development to meet and create retail demand in Indiana’s largest commercial district: We invite all downtown retailers to participate in BuyIN and profit from its success, as we attract more people downtown to live, work and play.”
An overview of the HSP downtown retail report can be downloaded at www.IndyChamber.com/BuyIN.