HERMISTON — From Red Robin to Costco, everyone has a wish list of restaurants or stores they wish were closer.
Those businesses have their own lists of what they need in a new location, however, and some communities don’t measure up. A city might have too few people, too much competition, not enough local spending, too low of a median income or be too far away from an interstate.
Companies today are able to analyze exactly what makes for a successful location and what each community has to offer, Hermiston assistant city manager Mark Morgan said.
“There are companies out there that know more about Hermiston than we do as far as the market,” he said.
Companies can go beyond looking at the number of people living in a market, for example, and see how many locals are actually shopping there. Consultants like Retail Coach put together analyses by using cellphone location data from the many apps that make their money by quietly tracking users’ location and selling the information.
“Your cellphone knows where you live because it knows where you sleep at night,” Morgan said.
From there, a company can analyze how many Hermiston residents are shopping or eating in the Tri-Cities, or create a “heat map” of sorts showing where visitors to a certain Hermiston store are coming from.
“If you really want to help drive additional resources to Hermiston, spend more of your money in Hermiston,” Morgan said.
Most businesses the East Oregonian contacted to ask about what they look for in a new locations didn’t respond.
Olive Garden did send over a list of its site selection criteria. The requirements include a trade area of at least 100,000 people within a 15-minute drive (Hermiston’s ZIP code held 50,415 in 2016) and a property of at least 2 acres with at least 20,000 average daily trips past it (Hermiston’s busiest intersection at Highway 395 and Elm Avenue sees 22,000 vehicles per day). Other restaurants owned by the chain’s parent company Darden require as high as 30,000 to 50,000 average daily trips.
Some chains set their sights lower. According to Golden Corral’s website, their smallest restaurant model is made for sites with 21,500 average daily trips, 45,000 people within a 15-minute drive and 70,000 people within a 20-minute drive.
Costco, which has been the subject of rumor in many cities in Eastern Oregon and Washington, declined to comment on its site selection practices. Documents on a few websites, including a a flier on the Gallelli Real Estate website, indicate Costco is looking for sites with 200,000 people within a 5-mile radius and a median income of $75,000. Hermiston’s median income was $49,559 in 2016.
Of course, there are older Costcos that don’t fit that rule — the smallest Costco is located in Juneau, Alaska, population 32,164. But many brick and mortar retailers are also expanding more cautiously now that they have to compete with online retailers.
Not everyone considers Hermiston too small — Panda Express just announced it is building a new restaurant in the former Stockman’s Steakhouse location. Hermiston has also welcomed new retail in the past five years, including Ranch & Home, Harbor Freight and Petsense.
The community has also seen the addition of locally owned restaurants such as Delish Bistro and Veg Out. Morgan said the city provides a treasure trove of market data on its website to assist entrepreneurs who may not have the resources to conduct their own market analysis.
Morgan said people tend to be willing to drive further for some things than others, which is why different businesses may be looking at differently sized “trade areas.”
“Something like 7-Eleven is going to have a very different drive time people are willing to do versus something like Home Depot,” he said.
It also makes a difference how many competitors are already there — Morgan said when people ask why The Dalles has a Fred Meyer even though it’s smaller than Hermiston, he points out The Dalles doesn’t have a Walmart that already offers many of the same goods.
He said the city’s approach to recruiting restaurants and retail is generally to “set the table” for them with good infrastructure and fewer hurdles. Hermiston, unlike most cities, does not require a business license with the exception of food trucks.