City of Burlington Official Plan Review Commercial Strategy Study Phase 1: Commercial Market Supply and Demand Analysis February 21, 2013 (Revised June 10, 2013)
February 21, 2013 Ms. Andrea Smith, MCIP, RPP Senior Planner Policy, Planning and Building Department City of Burlington 426 Brant Street Burlington, Ontario L7R 3Z6 Dear Ms. Smith: Re: Commercial Strategy Study (Phase 1: Commercial Market Supply and Demand Analysis) urbanmetrics inc. is pleased to submit our Commercial Market Supply and Demand Analysis report to the City of Burlington, which provides a summary of our findings as they relate to the supply of and future demand for commercial facilities throughout the City to 2031. This background report has been prepared as part of the City of Burlington s broader Official Plan Review Commercial Strategy Study, which is being undertaken jointly by urbanmetrics inc. and The Planning Partnership, plus staff from the City of Burlington s Planning and Building Department. The primary purpose of this report is to provide commercial market analysis to the City of Burlington to guide the formation of future commercial land use policy recommendations. In particular, this report quantifies the future retail and service commercial space requirements in the City of Burlington to 2031, and provides recommendations as to how future space can be accommodated within the urban system.
The analyses and appendices in the attached report provide our detailed study findings and conclusions. These findings and conclusions represent our best judgement, based on the information that was available to us at the time of our research. Accordingly, the findings, conclusions, projections, and recommendations presented herein should be reviewed and interpreted with reference to evolving circumstances and economic conditions. It has been a pleasure conducting this part of the assignment on behalf of the City of Burlington, and we look forward to discussing our results. Yours truly, urbanmetrics inc. Rowan F. J. Faludi, CMC, MCIP, RPP, PLE Partner 416 351 8585 x223 rfaludi@urbanmetrics.ca
TABLE OF CONTENTS EXECUTIVE SUMMARY... I 1 INTRODUCTION... 1 1.1 BACKGROUND... 1 1.2 STUDY OBJECTIVES... 2 1.3 2003 OFFICIAL PLAN REVIEW RETAIL COMMERCIAL STUDY... 3 1.4 APPROACH... 4 1.5 ASSUMPTIONS... 7 2 CITY OF BURLINGTON GEOGRAPHY AND DEMOGRAPHIC CHARACTERISTICS... 9 2.1 LOCATIONAL CHARACTERISTICS... 9 2.1.1 Regional context...9 2.1.2 Internal Transportation... 10 2.2 DEMOGRAPHIC CHARACTERISTICS... 11 2.2.1 Historic and Forecast Population Growth... 11 2.2.2 Age Structure... 13 2.2.3 Income Structure... 14 2.2.4 Ethnicity... 16 2.2.5 Family Structure... 17 2.2.6 Historic and Forecast Employment Growth... 18 3 RETAIL STRUCTURE... 19 3.1 INVENTORY... 19 3.2 INVENTORY OF VACANT SPACE... 27 3.3 CHANGE IN COMMERCIAL SPACE SINCE 2002... 29 3.4 COMMERCIAL SPACE PER CAPITA... 32 3.5 INVENTORY IN RELATION TO THE ACTIVE TRANSPORTATION NETWORK... 37 3.5.1 Transit Accessibility... 37 3.5.2 Walkability... 37 3.5.3 Cycling and Recreation Trail Network... 37 3.6 POTENTIAL FUTURE COMMERCIAL DEVELOPMENTS... 42
3.7 COMPETITIVE RETAIL FACILITIES OUTSIDE BURLINGTON... 47 4 THE CITY OF BURLINGTON S TRADE AREA... 49 4.1 TRADE AREA DEFINED... 49 4.1.1 Licence Plate Surveys... 49 4.1.2 Downtown Survey Origins... 53 4.2 BURLINGTON TRADE AREA... 55 4.3 TRADE AREA POPULATION PROJECTIONS... 59 4.4 TRADE AREA INCOME LEVELS... 61 4.5 TRADE AREA EXPENDITURES... 61 4.5.1 Per Capita Non Food Store Retail (NFSR) Expenditures... 62 4.5.2 Per Capita Food Store Retail (FSR) Expenditures... 64 5 BURLINGTON RESIDENTS SHOPPING PATTERNS... 66 5.1 DISTRIBUTION OF BURLINGTON RESIDENTS EXPENDITURES (2012)... 66 5.2 ONLINE SHOPPING... 70 6 COMMERCIAL TRENDS... 72 6.1 POWER CENTRES AND LARGE FORMAT RETAILERS... 73 6.2 THE BROADENING OF SHOPPING CENTRE MERCHANDISING... 75 6.3 NEW DEVELOPMENT CONCEPTS... 75 6.3.1 Lifestyle and Hybrid Centres... 75 6.3.2 New Urbanism... 78 6.3.3 Outlet Centres... 80 6.4 FOREIGN RETAILERS THE US INVASION... 82 6.5 BLURRING OF THE RETAIL HIERARCHY... 83 6.6 NON STORE RETAILING... 84 6.7 ACTIVE/TRANSIT ORIENTED COMMERCIAL DEVELOPMENT... 85 6.8 SUMMARY... 86 7 BURLINGTON RESIDENTS RETAIL DESIRES AND PREFERENCES... 88 7.1 BURLINGTON RESIDENTS PERCEPTIONS OF BURLINGTON SHOPPING FACILITIES... 88 7.2 BURLINGTON RESIDENTS PERCEPTIONS OF DOWNTOWN BURLINGTON... 89
8 ROLE OF DOWNTOWN BURLINGTON... 94 8.1 DOWNTOWN TRADE AREA... 98 9 FUTURE WARRANTED SPACE ANALYSIS... 101 9.1 FOOD STORE RETAIL EXPENDITURE ANALYSIS... 102 9.1.1 CIty of Burlington Share... 102 9.1.2 Residual Expenditure Potential from Burlington Residents... 102 9.1.3 Market Opportunity for FSR Space... 102 9.2 NON FOOD STORE RETAIL EXPENDITURE ANALYSIS... 103 9.2.1 CIty of Burlington and Secondary Trade Area Shares... 104 9.2.2 Residual Expenditure Potential from Trade Area Residents... 104 9.2.3 Market Opportunity for NFSR Space... 106 9.3 OTHER SELECTED RETAIL AND SERVICE SPACE POTENTIAL... 106 9.4 SUMMARY OF ADDITIONAL WARRANTED COMMERCIAL SPACE... 108 10 DOWNTOWN MARKET ANALYSIS... 110 10.1 DOWNTOWN PRIMARY TRADE AREA POPULATION GROWTH... 110 10.2 PROJECTED FUTURE WARRANTED SPACE IN THE DOWNTOWN... 111 10.2.1 Non Food Store Retail Analysis... 111 10.2.2 Food Store Retail Analysis... 113 10.2.3 Services and Selected retail Space Analysis... 115 10.2.4 Downtown Warranted Space Summary... 116 11 SUPPLY AND DEMAND RECONCILIATION... 117 12 CONCLUSIONS... 119 APPENDIX A LICENCE PLATE SURVEY RESULTS... 123 APPENDIX B ONLINE/TELEPHONE CONSUMER SURVEY RESULTS... 132 APPENDIX C INVENTORY OF COMMERCIAL SPACE... 159 APPENDIX D BACKGROUND DATA AND DEFINITION OF TERMS... 161
LIST OF FIGURES Figure ES 1: Summary of Future Warranted Space in Burlington (2012 2031)... vi Figure ES 2: Summary of Supply and Demand Reconciliation... vii Figure 2 1: City of Burlington Regional Context... 9 Figure 2 2 Burlington Street Network... 10 Figure 2 3: Historic Population, City of Burlington (2006 2011)... 12 Figure 2 4: Forecast Population, Halton Region Municipalities (2011 2031)... 12 Figure 2 5: City of Burlington Age Distribution (2006 2011)... 13 Figure 2 6: Per Capita Income, Halton Region Municipalities (2006)... 14 Figure 2 7: Per Capita Income Index to Province by Dissemination Area, CIty of Burlington (2006)... 15 Figure 2 8: Top 5 Ethnic Origins, City of Burlington (2006)... 16 Figure 2 9: Family Structure, CIty of Burlington (2011)... 17 Figure 2 10: Persons and Children per Family, Halton Region (2011)... 17 Figure 2 11: Historic and Forecast Employment, Halton Region Municipalities (2011 2031)... 18 Figure 3 1: Burlington Commercial Space Inventory (square feet)... 20 Figure 3 2: Burlington Commercial Space Inventory Locations... 21 Figure 3 3: Burlington Major Commercial Structure... 22 Figure 3 4: Supermarket Chain Representation in Burlington... 23 Figure 3 5: Supermarkets in Burlington... 25 Figure 3 6: Two Kilometre Distance Around Supermarkets... 26 Figure 3 7: Vacant Space Summary... 28 Figure 3 8: City of Burlington Change in Commercial Space 2002 2012 (square feet)... 31 Figure 3 9: City of Burlington Per Capita Commercial Space... 34 Figure 3 10: Per Capita Retail Space in Selected GTA Municipalities... 35 Figure 3 11: Per Capita Food Services and Drinking Space in Selected GTA Municipalities... 36 Figure 3 12: Burlington Transit Route Map... 39 Figure 3 13: 400 Metre Radius Around Supermarkets... 40 Figure 3 14: Major retail nodes and Burlington s Cycle/Trail network... 41 Figure 3 15: Potential Future Commercial Developments... 44 Figure 3 16: Location of Potential Future Commercial Developments... 46 Figure 4 1: City of Burlington Licence Plate Survey Results, Map of Customer Origins... 51 Figure 4 2: City of Burlington Licence Plate Survey Results, Customer Origin Distribution... 52 Figure 4 3: Downtown Burlington On Street Intercept Survey Results, Respondent Origin Distribution... 53
Figure 4 4: Downtown Burlington On Street Intercept Survey Results, Map of Respondent Origins... 54 Figure 4 5: City of Burlington Trade Area... 56 Figure 4 6: 2003 and 2012 Burlington Trade areas... 58 Figure 4 7: City of Burlington Trade Area, Historic and Forecast Population (2006 2031)... 60 Figure 4 8: City of Burlington Trade Area, Per Capita Income Levels (2006)... 61 Figure 4 9: City of Burlington Trade Area, Per Capita NFSR Expenditure Potential... 63 Figure 4 10: City of Burlington Trade Area, Per Capita FSR Expenditure Potential... 65 Figure 5 1: Online/Telephone Consumer Survey, Major Retail Nodes... 68 Figure 5 2: Distribution of Burlington Residents Expenditures by REtail Area & Store Category (NFSR)... 69 Figure 5 3: Distribution of Burlington Residents Expenditures by REtail Area & Store Category (FSR + Restaurants)... 70 Figure 5 5: Distribution of Online Expenditures by Category (Value of Expenditures)... 71 Figure 5 4: Prevalance of Online Shopping Among Survey Respondents (Made On Line Purchase in past month)... 71 Figure 7 1: Availability of Existing Retail Facilities by Store Format, City of Burlington... 88 Figure 7 2: Availability of Existing Retail Facilities by Store Type, City of Burlington... 89 Figure 7 3: Frequency of Visits to Downtown Burlington, Day & Evening... 89 Figure 7 4: Method of Travel to Downtown Burlington... 90 Figure 7 5: Satisfaction with Downtown Parking (Adequacy, Convience & Affordability)... 91 Figure 7 6: Availability of Existing Retail Facilities by Store Type, Downtown Burlington... 92 Figure 7 7: Importance of Various Downtown Functions to Burlington Residents (Out of 10)... 92 Figure 8 1: Reasons for Visiting Downtown Burlington, On Street Intercept Surveys... 95 Figure 8 2: Map of Downtown Burlington... 97 Figure 8 3: distribution of downtown burlington visitors... 98 Figure 8 4: downtown burlington trade area... 100 Figure 9 1: Food Store Retail (FSR) Analysis... 103 Figure 9 2: Non Food Store Retail (FSR) Analysis... 105 Figure 9 3: Warranted Additional Retail and Service Space in Burlington (2012 2031)... 108 Figure 9 4: Summary of Future Warranted Space in Burlington (2012 2031)... 109 Figure 10 1: Downtown Warranted NFSR Space Projection... 112 Figure 10 2: Downtown Warranted FSR Space Projection... 114 Figure 10 3: Services and Selected Retail Warranted Space Analysis... 115 Figure 10 4: 2031 Future Warranted Downtown Space Summary... 116 Figure 11 1: Supply and Demand Reconciliation... 118 Figure A 1: Customer Origin Survey Results, 2012 (Number of Licence Plates)... 124 Figure A 2: Customer Origin Survey Results, 2012 (Percentage of Licence Plates)... 125
Figure A 3: Map of Customer Origin Licence Plate Survey Results (Mapleview Centre)... 126 Figure A 4: Map of Customer Origin Licence Plate Survey Results (Mapleview Centre)... 127 Figure A 5: Map of Customer Origin Licence Plate Survey Results (Burlington Power Centre)... 128 Figure A 6: Map of Customer Origin Licence Plate Survey Results (Millcroft Centre)... 129 Figure A 7: Map of Customer Origin Licence Plate Survey Results (Appleby Dundas Power Node)... 130 Figure A 8: Map of Customer Origin Licence Plate Survey Results (Burloak Centre)... 131 Figure B 1: Online/Telephone Consumer Surveys, Demographic Characteristics... 133 Figure B 2: Online/Telephone Consumer Surveys, NFSR Expenditurs by Burlington Residents (WEIGHTED)... 134 Figure B 3: Online/Telephone Consumer Surveys, FSR & Restaurant Expenditurs by Burlington Residents (WEIGHTED)... 135 Figure B 4: Online/Telephone Consumer Surveys, Survey Questionnaire... 136 Figure C 1: Inventory of Burlington Commercial Space by Retail Category and Major Retail Node... 159 Figure D 1: Ontario Retail Trade Average Per Capita Expenditures by Retail Category (2012)... 163 Figure D 2: Province of Ontario Income/Expenditure Regression Equations, 2010... 164 Figure D 3: Province of Ontario, Historic Real Growth in Food Store Retail (FSR) Expenditures... 165 Figure D 4: Province of Ontario, Historic Real Growth in Non Food Store Retail (NFSR) Expenditures... 166 Figure D 5: Retail/Service Store Classification, Based on North American Industry Classification System (NAICS)... 167
EXECUTIVE SUMMARY urbanmetrics inc. and The Planning Partnership have been retained by the City of Burlington to undertake a Commercial Strategy Study, which is being prepared as part of the City s ongoing Official Plan Review process. The Commercial Strategy Study is intended to re evaluate the commercial policies of the City of Burlington Official Plan in order to address Strategic Plan directions, and to ensure that: The City s policies address current and future commercial land use needs; Commercial areas can be effectively and efficiently planned; Policies are reflective of recent changes to commercial land use planning and other trends; and, Policies can be effectively implemented. As part of Phase 1 of this broader Commercial Strategy Study, urbanmetrics has prepared the following Commercial Market Supply and Demand Analysis background report, which is intended to provide the required commercial market analysis to guide the formation of future commercial land use policy recommendations. In particular, this report quantifies the future retail and service commercial space requirements in the City of Burlington to 2031, and provides recommendations as to how future space can be accommodated within the urban system during this time period. The following provides a brief overview of our key research findings and conclusions. REPORT FINDINGS BURLINGTON S COMMERCIAL MARKET CHARACTERISTICS Based on 2011 Census data and population estimates prepared by the Regional Municipality of Halton, the current population of Burlington is approximately 183,100 1. This level of population provides the critical mass to maintain the full range of retail and service facilities in the commercial hierarchy. 1 Includes adjustments for census undercount, as detailed in Section 4.3 of this report. i
In recent years, the City of Burlington has experienced moderate population growth; increasing by an estimated 2,520 individuals during the previous inter census period (i.e., 2006 to 2011). This represents an average annual growth rate of 1.3%. By 2031, Burlington s population is forecast to reach a total of approximately 195,700 persons, representing total market growth of 12,600 residents between 2012 and 2031. This additional market growth will ultimately increase the demand for new retail and service commercial facilities in the City. As the City is quickly approaching its Greenfield capacity, the largest share of residential growth will be attracted to intensification sites: including the downtown Urban Growth Centre; Urban Growth Corridors along Plains Road and Fairview Street; and mixed use areas around the existing malls and GO rail stations. Income levels in Burlington, and in the balance of Halton Region, are well above the average for the Province of Ontario as a whole. Based on 2006 Census data, for example, per capita income levels in the City of Burlington were approximately 23% higher than the Provincial average in 2005. This indicates that there is significant individual spending power among Burlington residents. BURLINGTON S EXISTING COMMERCIAL STRUCTURE Based on a recent inventory of retail and service commercial uses in the City, there is currently some 10.6 million square feet of commercial space located in Burlington. Of this total, approximately 45% is comprised of Non Food Store Retail (NFSR) facilities, 39% is comprised of services, 9% is made up of food and beverage facilities, and 5% is vacant. Burlington has a traditional commercial structure, with the single largest concentration of overall commercial space within the downtown core. It also has two enclosed regional shopping centres (Burlington Mall and Mapleview Shopping Centre) and four major power centre nodes, which are situated at Brant Street and the Queen Elizabeth Way (QEW); Plains Road and the Queen Elizabeth Way (QEW); Appleby and Upper Middle Road; and Dundas and Appleby. Together, these major retail nodes contain some 4.3 million square feet of commercial space and account for approximately 41% of the total supply in Burlington. The commercial vacancy rate in Burlington is currently 5.0%, which is indicative of a balanced and healthy market. Although there are several nodes with relatively high vacancy rates, they tend to be due to space transitions and unique circumstances rather than signifying structural issues with the City s commercial supply. Since the City s previous commercial study was prepared in 2003, the growth in commercial space in Burlington generally outpaced population growth. Accordingly, Burlington has experienced a significant growth in space on a per capita basis over the past ten years. ii
Overall, per capita space ratios are currently above the average of comparable municipalities, which to some extent can be explained by its income characteristics and its accessibility to the highway network within the western Greater Golden Horseshoe. It is important to note, however, that the healthy vacancy rates in the community suggest that Burlington is generally not over stored. FUTURE COMMERCIAL DEVELOPMENT IN BURLINGTON Based on information provided by the City of Burlington, a number of potential future commercial developments have been identified, which are expected to generate a significant amount of new commercial space in Burlington throughout the study period to 2031: Immediate Development Prospects, which include those applications that have recently received approval, or are close to receiving full planning approval, are expected to add some 125,000 square feet of commercial space. Other Proposed Developments, which include all other formal development applications at various stages of the City s approval process, would potentially yield some 721,000 square feet of new retail and service development space. Significant Undeveloped Designated and Zoned Sites, which include a variety of vacant land parcels located in the City s existing commercial nodes. These sites are generally zoned for commercial uses but are not yet subject to formal planning or building permit applications. If developed, these sites would add some 347,000 square feet of commercial space to the existing supply. If all of these developments proceed as planned, they would add a total of some 1.194 million square feet to the existing supply of commercial space in Burlington. Over half of this space would comprise the expansion of the existing regional commercial node at Dundas and Appleby Line in north west Burlington. The City of Burlington s Planning Department has also identified a number of sites as having potential for future commercial development, which include both serviced and un serviced sites that are generally zoned for mixed commercial residential or commercial employment uses. These Other Potential Commercial Development Sites include the 225,000 square foot IKEA outlet, which would be vacated if the planning application facilitating the relocation of the existing IKEA store is approved. Based on a review of recent development trends in the Greater Toronto Area, and across Canada, future commercial development in the City of Burlington will likely be influenced by the following: The Evolution of Power Centre and Large Format Retail Development; The Broadening of Shopping Centre Merchandise; iii
The Introduction of Lifestyle Centres and Hybrid Mixed Use Centres; The Principles of New Urbanism; Outlet Centre Development; The Influx of U.S. Retailers to Canada; The Blurring of the Retail Hierarchy; Non Store Shopping; and, Transit/Active Transportation Supportive Commercial Development. CITY OF BURLINGTON AND DOWNTOWN TRADE AREAS Based on the results of licence plates surveys conducted at five of Burlington s major shopping destinations, as well as on street intercept surveys undertaken in the downtown, Burlington commercial facilities derive the majority of their sales volume from residents of the City. In addition, however, Burlington retailers also attract a significant portion of their customers from nearby communities in neighbouring municipalities such as Oakville and Hamilton. Accordingly, a Trade Area for the City of Burlington has been delineated that includes three separate zones, as follows: Primary Zone (City of Burlington); Secondary Zone East (Western Oakville); and Secondary Zone West (Lower Hamilton and Dundas). Based on recent Census data and population estimates prepared by the Regional Municipality of Halton and City of Hamilton, a total of some 497,700 individuals currently reside in the Burlington Trade Area. The population of this area is forecast to increase by some 45,900 persons over the study period; reaching a total of 543,600 by 2031. Downtown Burlington serves the entire City of Burlington, with a commercial Primary Zone that extends east of King Road; south of Highway 403 and the Queen Elizabeth Way (QEW); west of Walkers Line; and north of Lake Ontario. Based on the results of onstreet intercept surveys undertaken in the City s core, approximately 63% of visitors to the downtown originate from this Primary Trade Area. The 2011 population of the Primary Trade Area for Downtown Burlington has been estimated at 46,000 persons, including adjustments for census undercount. Based on Halton Region s Best Planning estimates, the population of this area is expected to reach 53,000 by 2031; largely through infill and intensification in the City s Urban Growth Centre. iv
BURLINGTON RESIDENTS SHOPPING PATTERNS, PREFERENCES & PERCEPTIONS Based on the results of the online/telephone consumer surveys, Burlington residents undertake the majority of their shopping within the City of Burlington. In fact, Burlington Non Food Store Retail (NFSR), Food Store Retail (FSR) and Restaurant facilities currently capture approximately 93.4%, 85.1% and 83.4% of the total value of expenditures made in these store categories, respectively. Approximately 15% of Burlington residents NFSR expenditures in 2012 were made outside the City of Burlington. Although relatively limited, most of this expenditure outflow from the City can be accounted for by retail facilities situated in the neighbouring municipalities of Oakville, and Hamilton to a slightly lesser extent. The majority of Burlington residents NFSR expenditures are made at Burlington Mall, Mapleview Centre or Burlington Power Centre. Collectively, these three centres capture approximately 40% of the total value of residents NFSR expenditures. Approximately one third (31%) of Burlington residents are currently engaged in some form of non store, or online shopping. In total, Burlington residents online expenditures accounted for less than one tenth of the total value they spent at actual brick and mortar FSR, NFSR and Restaurant facilities. The majority of local residents online expenditures related to service based items, including more than half of which that related to the purchase of various tickets and travel related services (53.7%). An additional 32.9% and 13.4% of online expenditures were made on retail merchandise (including downloaded materials) and other services, respectively. Overall, the majority of Burlington residents are currently satisfied with both the type and format of retail and service offerings available to them in the City. A large portion of residents, however, feel that there are currently too many Fast Food Restaurants and Big Box retailers in the City. Similarly, many believe that the City would benefit from an increase in the quantity/quality of pedestrian retail areas, retail accessible by transit and convenience/neighbourhood scale retailers. Based on the results of the online/telephone consumer and on street intercept surveys, as well as feedback obtained during public consultation events, there is a strong demand for additional food store retail offerings in Downtown Burlington. In particular, there is a strong desire for additional specialty food stores, a second supermarket/grocery store, and a regular famer s market in the downtown. v
FUTURE COMMERCIAL SPACE WARRANTED IN BURLINGTON Based on the results of our detailed retail market demand analysis, a total of approximately 1.55 million square feet of additional retail and selected service commercial space will be warranted in Burlington to serve the existing and future population of the City by 2031. Of this total additional warranted space, approximately 1.19 million square feet (77%) would be in the form of Non Food Store Retail (NFSR), while approximately 100,000 square feet (7%) of space would be accounted for by the Food Store Retail (FSR) category. In combination with the existing supply of commercial space in Burlington, a total of 11.6 million square feet of commercial space would be warranted by 2031. This represents a total growth in commercial space of approximately 15%. FIGURE ES 1: SUMMARY OF FUTURE WARRANTED SPACE IN BURLINGTON (2012 2031) Retail/Service Category Existing Space (2012) Cumulative Additional Space 2016 2021 2026 2031 Total Space (2031) Non Food Store Retail (NFSR) 4,801,961 270,400 618,500 899,800 1,192,100 5,994,061 Food Store Retail (FSR) 997,503 17,200 46,200 72,700 101,100 1,098,603 Selected Services 4,164,408 27,400 95,800 162,300 246,300 4,410,708 Liquor, Beer & Wine Stores 100,740 800 2,700 4,600 6,900 107,640 TOTAL SPACE 10,064,612 315,800 763,200 1,139,400 1,546,400 11,611,012 In Downtown Burlington, there will be a requirement for some 190,500 square feet of additional commercial space by 2031, including: approximately 76,500 square feet of Non Food Store Retail (NFSR) space; 31,300 square feet of Food Store Retail (FSR) space; and 82,700 square feet of other service and selected retail space. vi
SUMMARY & CONCLUSIONS Based on the market analysis contained in this report, there will be a need for some 1.55 million square feet of new commercial space in the City by 2031. At the same time, there is currently some 1.194 square feet of commercial space either committed or proposed in the City of Burlington, resulting in a residual shortfall of approximately 350,000 square feet of commercial space. FIGURE ES 2: SUMMARY OF SUPPLY AND DEMAND RECONCILIATION Square Feet Demand Non Food Store Retail 1,192,100 Food Store Retail 101,100 Selected Services 246,300 Liquor/Beer/Wine Stores 6,900 Total Demand 1,546,400 Supply Immediate Development Prospect 125,268 Other Proposed Developments 721,350 Significant Undeveloped Designated and Zoned Sites 347,354 Total Supply 1,193,972 Unfulfilled Demand 352,428 Including an application by IKEA to expand and relocate to a site at Walkers Line and the QEW, which has been recommended for approval by Planning Staff, approximately 957,000 square feet is already approved on Regional Commercial sites. This would consume some 60% of the demand by 2031. By 2031, there will be demand for some 101,100 square feet of additional food store space. Recognizing an approved supermarket on Dundas Street, this would leave a residual of approximately 65,000 square feet. A large share of this would be required to serve future growth in the downtown. Approximately 190,500 square feet of new commercial space will be required in Downtown Burlington by 2031. If this amount of space were developed in the City s core, it would leave approximately 160,000 square feet available for new development in the rest vii
of the City. This is a relatively small amount and should support new population along the Urban Growth Corridor and mixed use development in proximity to the GO Transit stations and Regional Mall sites, as well as, providing local serving commercial space in areas such as west Aldershot which may lack certain retail facilities. There are already a number of vacant sites in these areas with approval for commercial space, often as part of a mixed use zoning category. Where applications for new commercial space are made, approval should give priority to those developments supporting population intensification areas and in existing areas lacking local serving retail facilities. The results of the market analysis clearly indicate that the available supply of commercially designated lands will be sufficient to meet future demand to 2031. As such, there will be no need to designate additional commercial lands to support growth to 2031. The only exceptions to this would be to meet local serving needs in existing undersupplied portions of the City, such as west Aldershot, or to provide for local serving retail to support future residential development in intensification areas. Similarly, the conversion of employment lands to commercial is not required to support future growth in Burlington and should be avoided. viii
1 INTRODUCTION 1.1 BACKGROUND This Commercial Market report represents the first phase of a three phase process to complete a commercial strategy study as part of the City s 2012 Official Plan Review. It contains an extensive analysis of the supply of and demand for commercial uses in the City of Burlington. A review of land use policies regulating the development of commercial lands, is also part of this first phase and contained in a separate report. The remaining two phases include: the formulation of policy directions and design recommendations (Phase 2), and the preparation of urban design guidelines (Phase 3). In addition to these three phases, the study process has included a downtown strategy discussion paper, which has been finalized and considered in as part of this report. As the City approaches its greenfield development capacity, the emphasis of the current Official Plan Review is to develop policy that guides land use planning decisions in a planning context where intensification and infill is the primary form of development. Rather than focus on the creation of new neighbourhoods, the emphasis will be on refining existing ones. It is through this lens that the Commercial Strategy Study has been conducted. An additional area of focus has been the downtown as this area is an integral component of the current commercial system in the city. It is also an area that has been identified as an Urban Growth Centre to meet intensification targets, and because of this, its commercial role within the city has the potential to redefine itself and evolve. The Commercial Strategy Study also serves to address the City s Strategic Plan directions regarding vibrant neighbourhoods and prosperity directions. As such, a focus of the study is to create a strategy to redevelop aging retail areas into mixed use people places ; encourage a vibrant and healthy mixed use downtown; and create more mixed residential/commercial places within existing neighbourhoods. Solutions for integrating retail areas with the public and active transportation networks is also a directive for this study. To this end, the impact of the designated Provincially identified mobility hub in the downtown on commercial opportunities has also been considered. 1
1.2 STUDY OBJECTIVES The purpose of the overall Commercial Strategy Study is to obtain policy direction that incorporates commercial land use planning with neighbourhood planning and urban design. The focus is not only to ensure adequacy of commercial space, but also its integration within neighbourhoods and community facilities/infrastructure. The review includes both retail and service commercial uses. Specifically, the fundamental inquiries of the Phase 1 Market and Policy report are: 1. What are the national, provincial, regional and local market conditions and lifestyle trends that are likely to influence the amount, location, design, form and function of commercial development to 2031, within the city and within the downtown? 2. How is the existing supply of commercial lands and floor areas to accommodate current and future retail and service commercial needs to 2031, within the city and the downtown? 3. What is the growth potential of commercial activity in the downtown given that a portion of the downtown mixed use centre is designated as an Urban Growth Centre? 4. How adequate is the existing commercial policy framework positioned to address current and projected demand in the context of expected trends, in the city and the downtown? In addition to these basic questions, the first phase of the study has included extensive input from Burlington residents, businesses and other stakeholders, in terms of their preferences for the future development of the downtown and the urban structure. The principal areas of inquiry for the remaining study phases are: 5. How should the current policy framework be modified to serve the city s and downtown s land needs over the planning period to 2031? 6. Given downtown s size, location and competitive environment, what role should it play in the commercial hierarchy? Is its highest potential as a regional, city wide, or neighbourhood destination, or some combination thereof? 7. What steps can the city take to facilitate the successful integration of commercial areas within neighbourhoods to implement the Strategic Plan with respect to Vibrant Neighbourhoods and Prosperity directions? 8. What steps can the city take to facilitate the development, redevelopment, revitalization and intensification of commercial lands within nodes and corridors, and within mobility hub areas, so as to: 2
a. incorporate good principles of urban design and sustainability; b. make efficient use of hard infrastructure; c. accommodate co location with community facilities/infrastructure; and d. integrate commercial lands within a neighbourhood. 9. How should the policy framework be modified to align with upper tier policy (e.g. Provincial Policy Statement and Places to Grow)? 10. What information does the city need to track in order to monitor commercial activity in the city and the downtown? 11. What mechanisms can be used to assist in the implementation of the commercial land use objectives (e.g. programs and partnerships)? 1.3 2003 OFFICIAL PLAN REVIEW RETAIL COMMERCIAL STUDY This Market Study builds on the work undertaken in the previous retail commercial study for Burlington undertaken in 2003 by Robin Dee & Associates and Sorenson Gravely Lowes Planning Associates Inc. In the 2003 study, the consultants identified a demand for approximately two million square feet of additional commercial space between 2003 and 2021 in the Primary Zone comprising the City of Burlington and the Hamilton community of Waterdown. All of this warranted space had been accounted for by way of expansion potential at existing commercial projects; vacant and designated sites; and approved proposals. Based on the results of this current Market Study, the actual growth in commercial space in just the City of Burlington to 2012 has exceeded that amount. At the same time, however, the average vacancy rate for the City has declined from 6.4% to 5.0% suggesting that even though the City has seen a sizeable increase in its commercial inventory, the market had the capacity to absorb it. The 2003 study also concluded that the current retail hierarchy in the Official Plan provides, in general, for an appropriate distribution of retail space across the City while providing a high level of service. With considerable growth in the commercial structure since 2003, the same conclusion can be reached with regards to the distribution of commercial space as it exists today. Since the 2003 study, the City has seen the addition of a new regional power centre node at Appleby Line and Dundas and the strengthening of most of its other major commercial nodes, including the downtown. At the same time, new competition by way of power centre development at Burloak and the QEW in Oakville and at Dundas and Highway 6 in Waterdown has maintained the competitive balance between Burlington and its neighbouring municipalities. 3
It is also important to recognize that since the 2003 study, the Government of Ontario introduced its Provincial Policy Statement and Growth Plan for the Greater Golden Horseshoe. While overall, the population growth rates assumed in the Dee/SGL study are in line with the more current Growth Plan influenced projections, there is now a greater emphasis placed on intensification. As a result, this current study is based on a large share of future population growth will in existing areas, with the largest share in the downtown. This will ultimately influence where future commercial development should be focused. 1.4 APPROACH The following provides an overview of the various work steps that have been undertaken urbanmetrics in preparing this Commercial Market Supply and Demand Analysis: Collection, Review and Analysis of Relevant Background Materials We have collected and reviewed a variety of relevant background information that was obtained directly from the City of Burlington, as well as through our own independent research. This includes a review of the City s existing Official Plan commercial policies; relevant policy and strategic documents prepared by or on behalf of the City; recent market demand and impact analyses undertaken in and around the City of Burlington; Burlington development application statistics; as well as population and employment forecasts prepared by the City of Burlington, Halton Region and other nearby municipalities. Commercial Market and Trends Analysis Based on recent work undertaken by urbanmetrics, we have provided a summary of prevailing national, regional and local trends in retail development and consumer shopping behavior, which will likely influence the future commercial structure and competitiveness of retail/service facilities located in the City of Burlington. In particular, we have considered such factors and trends as: the entry of new department stores and other major retailers into Canada; retailing and urban intensification; the aging population; transit supportive retail development; the future of power or big box retailing; and active transportation strategies around retailing. Determination of Burlington Market Characteristics We have undertaken a detailed demographic and trend analysis for the City as a whole, including a review of the City and Regional Municipality of Halton s population projections, economic characteristics and age structure. 4
Inventory of Commercial Space in Burlington An inventory of all retail and service commercial space located in the City of Burlington has been undertaken and subsequently classified by store type, based on the North American Industrial Classification System (NAICS). Based on this information, we have calculated key performance measures for the City as a whole and for specific sub areas (e.g., Downtown Burlington), including: vacancy rates and per capita space ratios. We have also compared the results of our 2012 inventory with that undertaken by Robin Dee & Associates as part of the previous Official Plan Review Retail Commercial Study prepared for the City in 2003. This comparison has provided the context to determine how the current supply of commercial space in Burlington should be taken into consideration with regards to determining future space requirements. Identification of Future Retail Opportunities Based primarily on information provided by the City of Burlington, a review of Official Plan and Zoning information, and our own fieldwork, we have identified locations for potential future commercial development, redevelopment and/or intensification. Empirical Research (Licence Plate, On Street Intercept and Online/Telephone Consumer Surveys) We have undertaken a variety of background consumer survey research to determine the current shopping patterns and behavior of Burlington residents. This background market research has included licence plate surveys, on street intercept surveys, as well as an online/telephone consumer survey of Burlington residents, as described below. Licence Plate Surveys a total of some 1,849 unique licence plate records were collected over a three week period in the Fall of 2012 (i.e. September and October) at six major shopping destinations located in or near the edges of the City of Burlington. (i.e., Burlington Mall, Mapleview Centre, Burlington Power Centre (Brant Street & the Queen Elizabeth Way), Millcroft Centre, the Appleby Dundas Power Node and Burloak Centre in Oakville). The results of these surveys have been used to determine the geographic draw or Trade Area of commercial facilities located in the City of Burlington. On Street Intercept Surveys approximately 300 on street intercept surveys were completed with local residents, employees, visitors and other patrons of Downtown Burlington between September and October 2012. The results of these surveys have been used to identify shopping patterns, modes of transportation and customer origins for the downtown. 5
Online/Telephone Consumer Surveys a total of 885 online and telephone consumer surveys have been completed 2 to determine Burlington residents shopping patterns, as well as their perceptions of and satisfaction levels with the various type and format of commercial facilities in Burlington. Public/Stakeholder Consultation In addition to the various empirical research that has been undertaken as input to our commercial market analysis, urbanmetrics and The Planning Partnership have also engaged local residents, business owners and other members of the public to obtain feedback as to their opinions regarding the current and future state of Downtown Burlington. For example, a Downtown Public Workshop public consultation event was held on November 7, 2012, at the Burlington Arts Centre with more than 130 members of the public. This event included an interactive visioning exercise that polled participants based on a number of questions relating to their satisfaction with downtown and the specific improvements that they thought could be made, as well as smaller break out sessions that dealt with specific table topics intended to further develop the ideas and issues presented earlier in the event. The results of this type of public consultation have been used to assess the current state of Downtown Burlington, the various functions it serves, how well it is currently meeting the needs of the City, and how well current land use planning policies are supporting its vibrancy, as detailed in the accompanying Interim Commercial Strategy Discussion Paper on Downtown Burlington, which was prepared by urbanmetrics inc. and The Planning Partnership earlier. Analysis of Burlington Market Dimensions and Conditions Relying on the license plate, on street, telephone and on line surveys; the inventory of competition; and the population analysis, a Trade Area has been for the City of Burlington as a whole, and the downtown core. These geographic areas have served as the basis for our market supply and demand analysis. Within these areas, we have also estimated future population growth and determined the unique income and expenditure characteristics of Trade Area residents; which have served as important inputs to our market analysis. Commercial Needs Assessment Using the results of the previous work steps, we have undertaken a detailed market demand analysis by major store type; including Food Store Retail (FSR) and Non Food Store Retail (NFSR). In particular, this analysis has relied on Trade Area population estimates, income and expenditure characteristics of Trade Area residents, commercial inventory information, as well as the results of the 2 Includes 364 completed telephone surveys, 261 fully complete on line surveys, and 260 partially completed on line surveys. 6
online/telephone consumer surveys and license plate surveys, which have been used to develop market shares and inflow ratios for our expenditure analysis. Where Statistics Canada expenditure data is not available, we have relied on a per capita space methodology for selected other retail and service categories. This analysis has been used to project commercial space needs in the City of Burlington to 2031. Similarly, this analysis has also been used to determine how well the existing supply of commercial land and space will be able to accommodate existing and future retail and service commercial needs throughout this period. Development of Conclusions and Recommendations Based on the results of the various research and analysis described in the previous work steps, we have provided a summary of our key research findings and conclusions. We have also developed a number of recommendations as to how the City s future space requirements can be accommodated within the existing urban system of Burlington. 1.5 ASSUMPTIONS In any analysis requiring estimates of future conditions, it is necessary to make certain basic assumptions, as follows: Over the forecast period, to the year 2031, a reasonable degree of economic growth and stability will prevail in Canada, Ontario and specifically in Halton Region. It is expected that over this period cyclical downturn and upturn will occur. The population forecasts, which are based on Halton Region s Best Planning Estimates are assumed reasonable and will not vary significantly from actual counts in the future. The various sources employed in our analysis to calculate retail expenditures, base year Burlington shares or capture rates, and sales per square metre/foot performance levels for the various retail store types analyzed are considered sufficiently reliable. Commercial uses examined in this report include retail, service commercial, and local serving/street front office uses. For the purposes of our market analysis, certain commercial uses have not been evaluated, including automotive sales, car rental firms, service stations, funeral services and hotel/motel accommodation uses. All dollar references are in 2012 dollars, which exclude inflation, unless noted otherwise. Our research and analysis has been conducted in accordance with the terms of reference for this assignment and our authorized scope of work. The findings and recommendations presented in this report represent our best judgment based upon the information available to us as of the date of our research. 7
Accordingly, the findings and recommendations presented herein should be reviewed and interpreted with reference to evolving circumstances and economic conditions. If, for any reason, there are significant deviations from any of these assumptions, the report and its conclusions should be reviewed or re examined. 8
2 CITY OF BURLINGTON GEOGRAPHY AND DEMOGRAPHIC CHARACTERISTICS 2.1 LOCATIONAL CHARACTERISTICS 2.1.1 REGIONAL CONTEXT Burlington is strategically situated within the Western GTA highway network, with exceptional connectivity to Oakville, Mississauga, and the City of Toronto to the east; Hamilton and the Niagara Region to the south; and Hamilton and Brantford to the west. As a result, the City is well positioned to draw retail sales inflow from well beyond its borders and to attract retailers seeking a regional market exposure. FIGURE 2 1: CITY OF BURLINGTON REGIONAL CONTEXT 9
Based on 2006 Statistics Canada Place of Work data, Burlington is well balanced in terms of commuter flows, with some 41,300 Burlington residents working outside the City and 39,805 non Burlington residents working in the City. Approximately 60% of non residents working in Burlington live in Hamilton. To a much less extent, Burlington draws employment from Oakville, Mississauga and the City of Toronto. Commuting trips by Burlington residents outside the City are much more evenly distributed among these same municipalities, with about 24% of commuting outflow destined for Oakville; and 21% destined for each Mississauga and Toronto respectively. These commuting flow patterns provide a guide to the retail inflows and outflows to and from the City. 2.1.2 INTERNAL TRANSPORTATION Within Burlington, the major roadways are oriented along a grid system, with the major north south routes being Brant Street, Guelph Line, Walkers Line, and Appleby Line. The major east west routes are Dundas Street, Fairview Street/Plains Road, New Street and Lakeshore Road. In addition, the City is spanned by Provincial expressways 403, 407 and the QEW. FIGURE 2 2 BURLINGTON STREET NETWORK Linear commercial development has occurred along Brant Street between the QEW and downtown and along the Fairview/Plains Road corridor. Other major retail development has tended to have occurred in a more clustered or nodal pattern at strategic intersections and highway interchanges. In general, the road and highway system provides excellent connectivity throughout the urbanized portions of the City. The City is also served by a bus transit system with convergence points at a Central Downtown Bus Terminal and the three GO rail stations. The transit network also extends to downtown Hamilton and the Hamilton GO station. All major retail destinations in the City can be accessed by transit. The City also maintains a cycling/recreational trail network, with dedicated bike lanes, off road trails, paved shoulders, and shared lanes. The system is not fully connected, with barriers created by the major highways. The best route connectivity exists along the off road trails on hydro right of ways; the waterfront; and New Street. 10
2.2 DEMOGRAPHIC CHARACTERISTICS The socio demographic characteristics of a community can influence the market demand for retail space, including consumers preferences for certain types of retail facilities and the attraction of retail businesses to a community. Changes in the demographics of a community and lifestyle patterns can alter the demand for different types of retail and service commercial facilities, with population growth and income levels the ultimate influencers of demand. Some of the key drivers of change include the compositional variations in a population (i.e., aging and declining household sizes), per capita income levels and lifestyle changes associated with an aging population. The following section of the report provides an evaluation of the following characteristics of the City of Burlington s population: Current and historic population; Forecast population growth; Age structure; Income levels; Ethnicity; Family structure; Current and historic employment levels; and, Forecast employment growth. Section 4.5 of this report further examines the population projections for the City of Burlington and its Trade Area to assist in determining future retail space needs. 2.2.1 HISTORIC AND FORECAST POPULATION GROWTH Based on Statistics Canada Census data, the population of the City of Burlington reached an estimated 175,585 persons in 2011. This represents a growth rate of approximately 6.8% from 2006, or an average annual growth rate of 1.4%. This is slightly higher than the provincial population growth rate during this period (i.e., 2006 to 2011) and below that for the entire Regional Municipality of Halton (i.e., City of Burlington, Town of Oakville, Town of Milton and Town of Halton Hills). Figure 2 3 illustrates the historic change in population between 2006 and 2011 for the City of Burlington, as well as for the Regional Municipality of Halton and the Province of Ontario as a whole. 11
FIGURE 2 3: HISTORIC POPULATION, CITY OF BURLINGTON (2006 2011) 2006 2011 Actual Growth (2006 2011) % Growth (2006 2011) City of Burlington 164,380 175,585 11,205 6.8% Halton Region 439,255 501,470 62,215 14.2% Ontario 12,160,282 12,851,821 691,539 5.7% SOURCE: Statistics Canada Census data (2006 and 2011). Figures represent actual Census populations, and have not been adjusted for undercount. Based on population forecasts prepared by the Regional Municipality of Halton, the City of Burlington is expected to experience moderate population growth over the next two decades. By 2031, the City s population is projected to grow by approximately 12,000 persons to 186,000, representing total growth of 7.1% from 2011 levels. As summarized in Figure 2 4, the level of population growth forecast for the City of Burlington is lower than that for other municipalities in Halton Region; both in terms of net population growth and percentage growth. In fact, the amount of population growth projected for Burlington between 2011 and 2031 accounts for less than 5% of the total growth that is expected to occur throughout the Region this period. FIGURE 2 4: FORECAST POPULATION, HALTON REGION MUNICIPALITIES (2011 2031) 2006 2011 2016 2021 2026 2031 Actual Growth (2011 2031) SOURCE: Regional Municipality of Halton, Best Planning Estimates of Population, Occupied Dwelling Units and Employment, 2011 2031 (June 2011). % Growth (2011 2031) Oakville 165,529 174,780 198,205 221,826 234,121 246,400 71,620 41.0% Burlington 164,446 173,761 175,438 178,847 182,034 186,169 12,408 7.1% Milton 53,938 88,438 124,645 161,750 195,735 228,084 139,646 157.9% Halton Hills 54,978 56,066 57,922 61,672 77,003 91,885 35,819 63.9% Halton Region 438,891 493,045 556,210 624,094 688,894 752,537 259,492 52.6% 12
2.2.2 AGE STRUCTURE As households age, their needs and spending habits shift. In very broad terms, young adults tend to spend a higher proportion of their income on fashion, entertainment and recreation merchandise. As these individuals get married and have children, spending patterns tend to shift towards items and services related to housing and childrearing. Similarly, when family sizes increase and children age, housing, home furnishings and home décor items occupy a much greater share in household expenditures. Following retirement, housing and furnishings needs are typically reduced, although in many cases the quantity is replaced by higher quality. In addition, as consumers age, there is a greater emphasis on service related expenditures. Based on 2011 Census data, the median age of the Burlington population was 41.8, which represents a slight increase from the City s 2006 median age of 40.3. It is also interesting to note that the 2011 median age of Burlington residents is somewhat higher than that of the Ontario population (40.4) and neighbouring communities such as Oakville (40.2). Overall, therefore, it is evident that Burlington has a relatively mature population in comparison to other areas of the Province and Greater Toronto Area. The chart in Figure 2 5 provides a summary of the current and historic age distribution of the Burlington population by five year age group. As shown, the City s population is well represented in all age groups, with the largest share concentrated in the 35 to 59 age range. It is also important to note that Burlington s middle age and senior populations have continued to increase over the 2006 to 2011 period, with growth recorded in all age categories for persons 45 years and over. Although the Burlington population has continued to age, there has also been some growth in the younger market population as well; with increases of more than 5% in each of the 15 19, 20 24 and 25 29 age categories. FIGURE 2 5: CITY OF BURLINGTON AGE DISTRIBUTION (2006 2011) 85 years and over 80 to 84 years 75 to 79 years 70 to 74 years 65 to 69 years 60 to 64 years 55 to 59 years 50 to 54 years 45 to 49 years 40 to 44 years 35 to 39 years 30 to 34 years 25 to 29 years 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years 0 to 4 years 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Burlington (2011) Burlington (2006) SOURCE: urbanmetrics inc., based on Statistics Canada Census data (2006 and 2011). 13
2.2.3 INCOME STRUCTURE In combination with future population levels, per capita income is an important element in determining the current and future retail expenditure potential of Burlington residents. As summarized in Figure 2 6, income levels are generally quite high throughout the entire Regional Municipality of Halton, and particularly so in the Town of Oakville and City of Burlington. Based on 2006 Census data, per capita income levels in the City of Burlington are approximately 5% below the Regional average; however they are more than 23% above the Provincial average. FIGURE 2 6: PER CAPITA INCOME, HALTON REGION MUNICIPALITIES (2006) Municipality/Region Per Capita Income (2005) Index to Halton Region Income Indices SOURCE: Statistics Canada Census data (2006). Figures represent 2005 income levels. Index to Province Oakville $ 45,268 1.14 1.47 Burlington $ 37,736 0.95 1.23 Milton $ 34,480 0.86 1.12 Halton Hills $ 35,277 0.88 1.15 Halton Region $ 39,867 1.00 1.30 Ontario $ 30,723 0.77 1.00 The map in Figure 2 7on the following page provides an illustration of per capita income levels indexed to the Provincial average for the entire City of Burlington, as well as parts of neighbouring municipalities such as Oakville, Milton, and Hamilton. As shown, per capita income levels are generally greater than or equal to the Provincial average for the vast majority of dissemination areas identified in Burlington, Oakville and southern Milton. Moreover, the relatively limited numbers of low income pockets in these municipalities are concentrated along the Queen Elizabeth Way highway corridor, which consists primarily of non residential land uses. Overall, there is significant individual spending power in the City of Burlington, as well as many of the surrounding municipalities in the Region. Although the various retail and service commercial facilities located in the City primarily serve local residents, many of Burlington s regional shopping centres will be able to draw on the spending power of adjacent municipalities as well. 14
FIGURE 2 7: PER CAPITA INCOME INDEX TO PROVINCE BY DISSEMINATION AREA, CITY OF BURLINGTON (2006) SOURCE: urbanmetrics inc., based on Statistics Canada Census data (2006). 15
2.2.4 ETHNICITY In general, ethnicity has the greatest influence on food retailing and food services and much less so with respect to non food retailing. In recent years, however, large ethnic markets have influenced the type of retailers and formats attracted to some parts of the Greater Toronto Area (GTA). For example, the Chinese and East Asian population in communities such as Markham and Scarborough have spawned the development of Asian Retail Formats, which are characterized by very small retail units, few retail anchors, and a high proportion of restaurant space. Similarly, the East Indian Community has attracted many retailers unique to this population base in municipalities where they are heavily concentrated. In 2006 the most recent census period for which this type of data is available the majority of Burlington residents identified themselves as Canadian or of Western European descent. In fact, nearly one quarter identified themselves as Canadian (23.7%), while more than four in every five residents indicated that their ethnic origin was either English, Scottish or Irish. Figure 2 8 provides a summary of the top five ethnic origins in the City of Burlington, based on 2006 Census data. FIGURE 2 8: TOP 5 ETHNIC ORIGINS, CITY OF BURLINGTON (2006) Ethnic Origin Population (2006) % of Total English 59,275 36.1% Scottish 39,470 24.0% Canadian 38,985 23.7% Irish 33,730 20.5% German 16,565 10.1% Total Population 164,380 100.0% SOURCE: Statistics Canada Census data (2006). Population totals represent the sum of single and multiple responses for each ethnic origin category. All figures based on the Census population and do not include undercount adjustments. Given that Burlington and other nearby communities in the Western GTA have not experienced the same level of ethnic diversification as in other parts of the province (e.g., City of Toronto, York Region), no major changes are anticipated in terms of the types of goods being demanded in the City of Burlington, nor the type of retail formats being developed (i.e., based on ethnicity alone). A more detailed review of the trends that are likely to affect the type and format of retail/service commercial facilities located in the City of Burlington is provided in Section 6 of this report. 16
2.2.5 FAMILY STRUCTURE As is characteristic of most of the communities in Halton Region, the majority of families in Burlington are two parent families; a large portion of which have children at home. Figure 2 9 provides a summary of the family structure of some 51,105 families identified in the City of Burlington, based on 2011 census data. As shown, the majority of Burlington families include two parents (85.7%) and nearly half have children at home (46.8%). The average number of children in each family is 1.1, resulting in a persons per family average of exactly 3.0. As summarized in Figure 2 10, these characteristics are generally consistent with other nearby communities in Halton Region, however family sizes are slightly smaller in Burlington. FIGURE 2 9: FAMILY STRUCTURE, CITY OF BURLINGTON (2011) # of Families % of Total Two parent families 43,785 85.7% With no children at home 19,960 39.1% With children at home 23,935 46.8% Lone parent familiies 7,340 14.4% TOTAL 51,105 100.0% Persons per family 3.0 Children per family 1.1 SOURCE: Statistics Canada Census data (2006 and 2011). FIGURE 2 10: PERSONS AND CHILDREN PER FAMILY, HALTON REGION (2011) 4.0 3.0 2.0 1.0 3.0 1.1 Burlington 3.2 1.2 Halton Hills 3.2 1.3 Milton 3.2 1.3 Oakville Children Per Family Persons Per Family SOURCE: Statistics Canada Census data (2011). 17
2.2.6 HISTORIC AND FORECAST EMPLOYMENT GROWTH Based on 2011 employment estimates obtained from the Regional Municipality of Halton, the City of Burlington currently supports a total of more than 95,000 jobs. This represents approximately 38% of the Region s total workforce; a slightly higher proportion than their corresponding share of the Region s total population (35%). Figure 2 11 provides a summary of the historic and projected employment projections prepared by the Region of Halton. As shown, Burlington is expected to experience a growth in employment of approximately 10,000 jobs by 2031. This is a very high level in relation to population growth and represents one 0.8 jobs per new resident. Recognizing that only about half of the population is of working age, this implies that a portion of new jobs will be filled by persons commuting from other parts of the region. Similarly to the population projections summarized in Section 2.2.1, this growth represents a relatively small portion of the total employment growth that is anticipated across Halton Region. FIGURE 2 11: HISTORIC AND FORECAST EMPLOYMENT, HALTON REGION MUNICIPALITIES (2011 2031) 2006 2011 2016 2021 2026 2031 Actual Growth (2011 2031) SOURCE: Regional Municipality of Halton, Best Planning Estimates of Population, Occupied Dwelling Units and Employment, 2011 2031 (June 2011). % Growth (2011 2031) Oakville 82,089 90,969 106,485 120,795 122,578 128,359 37,390 41.1% Burlington 87,854 95,656 98,710 102,846 104,145 105,349 9,693 10.1% Milton 27,232 44,452 62,553 81,106 96,631 114,330 69,878 157.2% Halton Hills 19,228 19,856 20,744 22,936 32,356 41,962 22,106 111.3% Halton Region 216,403 250,932 288,493 327,683 355,710 390,000 139,068 55.4% It is important to note that future employment growth from outside of Burlington could provide additional market support for the various existing and potential new retail/service commercial facilities located in or near the City s various employment areas, including the downtown core. 18
3 RETAIL STRUCTURE 3.1 INVENTORY Figure 3 1 summarizes the Burlington Commercial Inventory by major node. The location of each node is indicated on Figure 3 2. The inventory follows Statistics Canada and NAICS classification practices and is based on store types rather than merchandise 3. In total there are some 10.6 million square feet of commercial space in the City, of which approximately 45% is comprised of non food retail stores; 39% is comprised of services; 9% is made up of food and beverage stores; and 5% is vacant. Burlington has a traditional commercial structure, with the single largest concentration of commercial space being within the downtown core. The City has two enclosed regional shopping centres (Burlington Mall and Mapleview Shopping Centre) ranked 20 th and 32 nd in terms of size of all enclosed malls in Ontario. It also contains four major power centre nodes: at Brant Street and the QEW; Plains Road and the QEW; at Appleby and Upper Middle Road; and: at Dundas and Appleby. Together these major nodes contain some 4.3 million square feet or about 41% of the total inventory. The largest share of space is comprised of local serving (i.e. convenience, neighbourhood and district retail) and arterial commercial facilities not part of a major shopping centre or node. This structure is preferable from a smart growth perspective because it provides for a more balanced distribution of commercial space in relation to residential communities. Conversely, commercial structures which are more focused on regional retail nodes typically require longer shopping trips. Burlington contains all of the major non food retailers and store types found in most urban GTA municipalities, including: Two Bay Department Stores; A Sears Department Store; Two Walmart Department Stores; Two Zellers Stores, which are being taken over by Target; Home Depot and Rona building centres; A Costco Warehouse Membership Club; and, 3 For example, department and warehouse membership club sales are classified by Statistics Canada as General Merchandise, regardless of merchandise type. For this reason, food store space in Walmart and Costco would be listed under the general merchandise category. 19
Two Canadian Tire Stores. The City also has a number of large scale specialty retailers found only in select locations throughout the region which would draw from well beyond the City, including: Mountain Equipment Co op; IKEA; SAIL; and, Lee Valley Tools. Owing to its strategic location central within the Greater Golden Horseshoe highway network; access to a variety of recreation areas; and its relatively high income characteristics, Burlington has the ability to attract some retailers that are very selective with regards to store locations. FIGURE 3 1: BURLINGTON COMMERCIAL SPACE INVENTORY (SQUARE FEET) Fairview Mapleview Millcroft Walkers Guelph Appleby Guelph Remainder of Remainder of Fairview Street Street, Brant Street Ikea Power Plains Road Shopping Burlington Power Line/New Line/New Line/New Line/QEW North South Downtown East West Power Centre Centre /Aldershot Centre Mall Centre Guelph (11) Street Street Street Power Node Burlington Burlington Total City 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Supermarkets & Grocery 26,300 65,268 32,152 58,434 83,029 59,981 116,877 62,000 20,000 69,200 133,976 34,387 761,604 Specialty and Other Food 22,955 19,778 20,704 4,641 47,834 2,604 2,860 1,350 1,270 10,100 6,888 28,095 5,850 1,000 49,898 10,072 235,899 Total Food 49,255 85,046 52,856 63,075 83,029 47,834 2,604 2,860 61,331 118,147 72,100 26,888 28,095 75,050 1,000 183,874 44,459 997,503 Pharmacies & Personal Care 12,000 6,800 1,423 4,700 37,303 18,937 17,006 1,000 26,503 3,200 25,880 38,685 65,928 17,027 276,392 General Merchandise 11,850 9,956 141,233 126,464 6,128 261,544 408,285 168,009 9,219 137,271 1,300 5,094 10,000 22,212 2,600 1,321,165 Apparel and Accessories 58,300 37,627 16,000 34,631 6,050 268,854 114,766 12,000 28,000 3,856 10,100 3,700 10,764 1,000 605,648 Home Furnishings 46,800 168,104 36,800 103,186 286,598 34,730 20,278 53,169 11,484 1,015 17,000 1,750 20,494 3,150 51,000 141,330 231,858 1,228,746 Other Miscellaneous 23,833 116,378 62,743 38,440 50,965 21,303 42,843 11,432 10,870 78,400 14,563 12,286 8,900 25,000 126,315 136,569 780,840 Building and Outdoor Home Supply 3,500 36,162 41,326 21,220 1,140 2,200 19,569 148,060 90,405 116,300 479,882 Selected Automotive 7,300 19,830 10,158 10,000 2,500 13,500 46,000 109,288 Total Non Food Retail 156,283 382,327 317,932 302,721 288,021 133,951 609,282 648,000 219,931 22,104 288,314 24,669 78,554 84,004 224,060 470,454 551,354 4,801,961 Other Retail: LBW 6,400 11,260 13,409 1,000 20,806 17,986 13,500 16,379 100,740 Banks/Credit Unions 33,000 15,106 12,864 14,745 4,743 7,525 13,544 19,400 16,400 15,477 6,900 47,944 35,232 242,880 Health Care 121,538 28,164 30,703 44,520 1,391 7,459 13,400 11,556 11,180 7,000 27,560 26,197 119,397 171,798 621,863 Cultural, Entertainment & Recreation 69,800 24,262 61,898 4,087 28,700 58,062 2,400 4,800 49,800 100,000 5,559 79,599 140,134 629,101 Food Services & Drinking Places 150,866 108,840 52,775 35,872 1,094 90,238 22,137 11,232 55,548 20,418 44,300 13,890 27,672 22,775 16,275 116,787 123,377 914,095 Consumer Goods Rental 2,700 8,249 2,000 21,500 34,449 Personal & Household Goods Repair & Maintenance 4,000 10,016 24,466 2,500 26,696 630 1,712 728 11,800 1,200 60,869 104,700 249,317 Personal Care 76,000 15,310 5,376 43,590 6,353 6,446 14,632 6,350 11,600 8,232 19,955 18,676 1,050 58,473 36,579 328,622 Selected Civic & Social Organizations 46,563 9,600 10,000 2,500 40,000 880 1682 5,200 16,500 132,925 Social Services 4,300 8,514 7,900 5,500 1,200 14,721 8,084 50,219 Other Services 209,310 43,032 102,280 81,763 971 18,116 9,996 2,810 26,860 2,850 68,785 7,175 100,049 286,940 960,937 Total Services 718,077 262,844 238,463 102,770 5,181 386,401 31,482 108,650 109,001 59,478 163,140 49,100 272,449 90,164 17,325 605,039 944,844 4,164,408 Total Occupied Space 930,015 741,477 622,660 468,566 376,231 569,186 643,368 759,510 411,069 217,715 523,554 100,657 379,098 262,718 242,385 1,275,746 1,540,657 10,064,612 Vacant 121,684 41,136 10,218 30,333 3,043 62,607 7,774 10,766 12,000 37,797 3,420 8,550 7,746 38,736 56,831 81,722 534,363 Grand Total 1,051,699 782,613 632,878 498,899 379,274 631,793 651,142 770,276 423,069 255,512 526,974 109,207 386,844 301,454 242,385 1,332,577 1,622,379 10,598,975 Upper Middle and Dundas/ Appleby Power Node Source: urbanmetrics inc. 20
FIGURE 3 2: BURLINGTON COMMERCIAL SPACE INVENTORY LOCATIONS Source: urbanmetrics inc. 21
FIGURE 3 3: BURLINGTON MAJOR COMMERCIAL STRUCTURE 22
In terms of supermarkets, the City is represented by all of the major chains and banners found in urban GTA municipalities. Figure 3 4 summarizes the distribution of supermarket space by chain. Figure 3 5 shows the location of each of the 17 supermarkets in Burlington. The three major chains control approximately 87% of the supermarket space, operating both full line and discount stores. Loblaws, through its Fortinos and No Frills banners, is the most represented chain with five stores and 47% of the space. The discount segment is a relatively small component of the market representing approximately 22% of space distributed among the No Frills, Food Basics, Price Chopper and FreshCo banners. As a relatively high income community, discount food stores in Burlington play a smaller role than they would in other municipalities. FIGURE 3 4: SUPERMARKET CHAIN REPRESENTATION IN BURLINGTON Source: urbanmetrics inc. In addition to this space, the two Walmart Supercentres also contain supermarket scale food components and the Costco warehouse membership club has a food component estimated at approximately 60,000 square feet. 23
Figure 3 6 provides an analysis of the geographic representation of Supermarkets within the City. In general, a typical trade area for a supermarket in an urban area is approximately two kilometres. On Figure 3 6, two kilometre radii around each supermarket have been delineated as a guide to how well different parts of the City are served by food stores. In general, the urban portions of the City are well served by the existing supply of supermarkets with the exception of Aldershot, where the closest store is the Fortinos superstore at the QEW and Plains Road. Much of this community is outside of a two kilometre radius. There is, however, a large concentration of smaller food stores along Plains Road which serves the Aldershot community. 24
FIGURE 3 5: SUPERMARKETS IN BURLINGTON 25
FIGURE 3 6: TWO KILOMETRE DISTANCE AROUND SUPERMARKETS 26
In conclusion, with the exception of Aldershot, the urban portions of the City are adequately served by the distribution of supermarkets and other major food retailers across the City. 3.2 INVENTORY OF VACANT SPACE Figure 3 7 summarizes the vacant space inventory for the City. Overall the vacancy rate is 5.0%, which is indicative of a balanced market. While there are several nodes with relatively high vacancy rates, these tend to be due to space transitions and unique circumstances rather than signifying structural issues with the City s commercial supply. For example, the vacant space in the downtown area includes, internal space in Burlington Square a project which has always struggled to lease to retail tenants and has tended to attract institutional users; a block which is being redeveloped; and a specialty retail center ( Village Square ) which has had difficulty attracting retail tenants due to its configuration. Excluding these projects, the downtown vacancy rate would be approximately 5.0% or in line with the City average. Appleby Village at Appleby Line and New Street was a former enclosed community scale shopping centre, which has recently de malled to a new format open concept centre and is still has some vacant units for lease. Similarly, the vacant space within the Upper Middle Road/Guelph Line Node is concentrated primarily in the Fortinos Plaza, which has recently undergone a renovation/expansion and is still in the process of leasing space. In summary, the vacant space inventory is indicative of a healthy and balanced market within the City and the individual commercial nodes. 27
FIGURE 3 7: VACANT SPACE SUMMARY Vacant Total Space Vacancy Rate 1 Downtown 121,684 1,051,699 11.6% 2 Fairview Street East 41,136 782,613 5.3% 3 Fairview Street East 10,218 632,878 1.6% 4 Brant Street Power Node 30,333 498,899 6.1% 5 IKEA Power Node 3,043 379,274 0.8% 6 Plains Road/Aldershot 62,607 631,793 9.9% 7 Mapleview Shopping Centre 7,774 651,142 1.2% 8 Burlington Mall 10,766 770,276 1.4% 9 Millcroft Power Node 12,000 423,069 2.8% 10 Upper Middle and Guelph Line 37,797 255,512 14.8% 11 Dundas/Appleby Power Node 3,420 526,974 0.6% 12 Walkers Line/New Street 8,550 109,207 7.8% 13 Guelph Line/New Street 7,746 386,844 2.0% 14 Appleby Line/New Street 38,736 301,454 12.8% 15 Guelph Line/QEW Power Node 242,385 0.0% 16 Remainder of North Burlington 56,831 1,332,577 4.3% 17 Remainder of South Burlington 81,722 1,622,379 5.0% Grand Total 534,363 10,598,975 5.0% Source: urbanmetrics inc. 28
3.3 CHANGE IN COMMERCIAL SPACE SINCE 2002 Figure 3 8 summarizes the change in commercial space by node and by category since the City s previous commercial study was prepared in 2003. We would note that the inventory for this study was conducted in the fall of 2002, where as in this current study, the inventory was conducted in the fall of 2012. The two inventories were conducted by the same firm, with the 2002 store inventory acting as the base for the 2012 inventory. This facilitates comparison between the two inventories as it avoids the issue of differing size estimates by different consultants. However, an important difference is that in 2005, Statistics Canada changed its retail classification system which has resulted in some variances in the space inclusions between the two periods. The most significant differences are as follows: The food categories are relatively unchanged, with the minor exception that vitamin/food supplement stores had been moved from other food to pharmacies and personal care; Within the non food categories, the pharmacy and personal care category now includes a number of store types previously included in other categories, such as optical; hearing aids; and nutritional supplements. The apparel accessories category now includes jewellery and luggage/leather, which were previously categorized under the other miscellaneous category. The building and outdoor home supply category has been bolstered through the inclusion of a range of home renovation supply firms (e.g. kitchen cabinets; plumbing; electrical; spas; pool supplies; etc. that had previously been categorized as wholesale. In addition, hardware stores had been classified as other miscellaneous retail. The other miscellaneous category, in addition to the above noted changes, now includes used goods (previously not considered retail) and excludes a number of minor categories. The services categories have changed significantly and with the exception of banks/credit unions; health care; and food services and drinking places, it is not possible to compare the individual categories between the two inventories. For these reasons, the comparison between the two years should be viewed generally, with more credence given to those categories experiencing minimal changes and the more general space totals. Overall, the size of the two inventories has grown by approximately 3.4 million or by just under 50%. Recognizing that some categories have been bolstered by space not previously included in the inventory, the actual commercial space growth is approximately 40%. This is still considerably more than the population growth over this period, which was approximately 16%. It is also important to note that the amount of vacant space increased by only 12% (i.e. below the rate of population growth), indicating that despite the very large growth in commercial space, market take up or absorption was not an issue. 29
In particular, the downtown did not appear to be affected by the growth in commercial space elsewhere in the City, as the total amount of vacant space was virtually unchanged (117,504 square feet in 2002 vs. 121,684 square feet in 2012). Excluding the redevelopment block, the vacant space in the downtown likely declined over this period. In terms of categories, the food store category grew by a relatively modest amount in keeping with population growth. This is consistent with broader economic trends, which have seen minimal growth in this category owing to the rise of food retailing by non food retailers (e.g. Walmart, Costco, and Shoppers Drug Mart) and an increase in food service (restaurants and fast food outlets) consumption. The non food category grew by approximately 49%. Excluding the building supply and automotive supply categories, which would have most affected by the addition of previously non classified retail space, the growth in non food space would have been approximately 42%. In summary, over the growth in commercial space in Burlington over the past ten years has outpaced population growth. At the same time, however, the space has generally been absorbed within the market and has not appeared to negatively impact the downtown. 30
FIGURE 3 8: CITY OF BURLINGTON CHANGE IN COMMERCIAL SPACE 2002 2012 (SQUARE FEET) 2002 2012 Difference % Difference Supermarkets & Grocery 689,789 763,404 73,615 11% Specialty and Other Food 163,825 234,099 70,274 43% Total Food 853,614 997,503 143,889 17% Pharmacies & Personal Care 116,148 276,392 160,244 138% Department Stores 699,236 773,567 74,331 11% Canadian Tire Stores 160,539 183,407 22,868 14% Costco 118,277 118,277 0% General Merchandise 73,997 245,914 171,917 232% Apparel and Accessories 416,864 605,648 188,784 45% Home Furnishings 771,568 1,228,746 457,178 59% Other Miscellaneous 607,725 780,840 173,115 28% Building and Outdoor Home Supply 211,851 479,882 268,031 127% Selected Automotive 41,642 109,288 67,646 162% Total Non Food Retail 3,217,847 4,801,961 1,584,114 49% Other Retail: LBW 68,415 100,740 32,325 47% Banks/Credit Unions 137,313 242,880 105,567 77% Health Care 315,713 621,863 306,150 97% Cultural, Entertainment & Recreation 629,101 629,101 n/a Food Services & Drinking Places 678,806 914,095 235,289 35% Consumer Goods Rental 34,449 34,449 n/a Personal & Household Goods Repair/Main. 249,317 249,317 n/a Personal Care 370,556 328,622 41,934 11% Selected Civic & Social Organizations 132,925 132,925 n/a Social Services 50,219 50,219 n/a Other Services 1,033,033 960,937 72,096 n/a Total Services 2,535,421 4,164,408 1,628,987 64% Total Occupied Space 6,675,297 10,064,612 3,389,315 51% Vacant 478,788 534,363 55,575 12% Grand Total 7,154,085 10,598,975 3,444,890 48% Source: urbanmetrics inc. 31
3.4 COMMERCIAL SPACE PER CAPITA Figure 3 9 summarizes the square feet per resident in the City as per the 2012 inventory by commercial category. Over all there is approximately 58 square feet per capita in the City. This is a relatively high ratio compared with most other GTA municipalities. While the services category is often difficult to compare between different inventories due to differences in methodologies and study purpose, we have provided a comparison between Burlington and a range of other GTA municipalities for the food; non food and food service categories. The municipalities chosen are the urban municipalities in the GTA for which recent inventories are available. The comparable municipalities include 4 : Halton Region Burlington Oakville Peel Region Brampton York Region Markham Richmond Hill Vaughan Newmarket Durham Region Pickering Ajax Waterloo Region City of Waterloo 4 Inventory data was not available for the City of Mississauga, the City of Oshawa, and the Town of Aurora, The City of Toronto was not considered a reasonable comparable. 32
Between 2002 and 2012 the per capita non food store space in Burlington has effectively remained constant. The current rate of 5.4 square feet per capita is above average and between the levels found in Markham and Waterloo. Given the above average income characteristics of the City and the minimal change in supply over the past 10 years, a higher than normal ratio of space per population in the food category is not remarkable. On the other hand, both the non food and food services/drinking categories have grown significantly on a per capita basis over the past 10 years. The current non food space per capita ratio is higher than all of the urban comparables with the exception of Newmarket. In terms of non food stores, the per capita space in the general merchandise category (which includes department stores, Costco, Canadian Tire, dollar stores, and a range of other general retailers), as well as the home furnishings category, are particularly above the norm for urban GTA municipalities. The food services/drinking space per capita ratio in Burlington is also above the group average 5, but within the middle of the selected municipalities. In summary, the Burlington has experienced a significant growth in space on a per capita basis over the past ten years. On a per resident basis, its commercial space is above the average of comparable municipalities, which to some extent can be explained by its income characteristics and its accessibility to the highway network within the western Golden Horseshoe region. Vacancy rates within the community, however, suggest that Burlington is generally not over stored. 5 Data for food services/drinking space was not available for the full set of comparable municipalities. 33
FIGURE 3 9: CITY OF BURLINGTON PER CAPITA COMMERCIAL SPACE Square Feet Square Feet Per Capita 2012 Population 183,100 Supermarkets & Grocery 763,404 4.17 Specialty and Other Food 234,099 1.28 Total Food 997,503 5.45 Pharmacies & Personal Care 276,392 1.51 General Merchandise 1,321,165 7.22 Apparel and Accessories 605,648 3.31 Home Furnishings 1,228,746 6.71 Other Miscellaneous 780,840 4.26 Building and Outdoor Home Supply 479,882 2.62 Selected Automotive 109,288 0.60 Total Non Food Retail 4,801,961 26.23 Other Retail: LBW 100,740 0.55 Banks/Credit Unions 242,880 1.33 Health Care 621,863 3.40 Cultural, Entertainment & Recreation 629,101 3.44 Food Services & Drinking Places 914,095 4.99 Consumer Goods Rental 34,449 0.19 Personal & Household Goods Repair & Maintena 249,317 1.36 Personal Care 328,622 1.79 Selected Civic & Social Organizations 132,925 0.73 Social Services 50,219 0.27 Other Services 960,937 5.25 Total Services 4,164,408 22.74 Total Occupied Space 10,064,612 54.97 Vacant 534,363 2.92 Grand Total 10,598,975 57.89 Source: urbanmetrics inc. 34
FIGURE 3 10: PER CAPITA RETAIL SPACE IN SELECTED GTA MUNICIPALITIES 6 NON FOOD STORE RETAIL (NFSR) FOOD STORE RETAIL (FSR) Source: urbanmetrics inc. 6 urbanmetrics Commercial Inventories for Burlington (2012), Vaughan, Pickering, Newmarket, Ajax, Waterloo, and Oakville. John Winter and Associates Limited Inventory of Commercial Space for Markham. Realty Research Group, 2006 Retail Market Analysis Update for Whitby. 2005 Malone Given Parsons: Retail Policy Review Study for Brampton 35
FIGURE 3 11: PER CAPITA FOOD SERVICES AND DRINKING SPACE IN SELECTED GTA MUNICIPALITIES 7 6.0 5.0 4.5 5.2 5.3 5.8 4.6 5.0 4.3 4.0 3.0 3.1 3.5 2.0 1.0 0.0 Pickering (2009) Oakville (2005) Waterloo C (2009) Vaughan (2009) Markham (2004) Newmarket (2009) Average Burlington (2012) Burlington (2002) Source: urbanmetrics inc. 7 urbanmetrics Commercial Inventories for Burlington (2012), Vaughan, Pickering, Newmarket, Ajax, Waterloo, and Oakville. John Winter and Associates Limited Inventory of Commercial Space for Markham. Realty Research Group, 2006 Retail Market Analysis Update for Whitby. 2005 Malone Given Parsons: Retail Policy Review Study for Brampton 36
3.5 INVENTORY IN RELATION TO THE ACTIVE TRANSPORTATION NETWORK 3.5.1 TRANSIT ACCESSIBILITY Figure 3 12 illustrates the Burlington Transit Route Map and major shopping destinations. In terms of accessibility, every major shopping node and large food store anchored shopping centre is on at least one transit line. Downtown Burlington is the convergence point for five Burlington Transit Lines and one Hamilton transit line. While all of the major shopping destinations can be accessed by transit, the ease of access and transfers required will ultimately depend on the origin of the shopper and their ultimate destination. From a practical standpoint, shopping by bus transit is typically only undertaken as an alternative to automobile travel, due to age, affordability or mobility issues. In an affluent community, such as Burlington, bus oriented shopping for the vast majority of residents would not be a lifestyle choice, but rather a necessity for young persons without a drivers license; seniors no longer able to drive; and low income persons. In addition to the bus transit system, the City is served by all day GO train service along the Lakeshore Line, with stations at Aldershot, Brant Street (Burlington Station) and Appleby. There is a developing commercial node in proximity to the Brant Street Station, with planning policies supportive of mixed use development in proximity to these stations. 3.5.2 WALKABILITY Figure 3 13 illustrates 400 metre radii around the City s supermarkets. This illustrates the pedestrian proximity of weekly shopping opportunities. We would note that there are a variety of specialty food and convenience stores also serving the City, but for the most part, the vast majority of the City is outside a reasonable walking distance to a weekly food destination. 3.5.3 CYCLING AND RECREATION TRAIL NETWORK Figure 3 14 illustrates the location Burlington s supermarkets and major shopping destinations in relation to the City s cycling and recreation trail network. As indicated by this map, the downtown is relatively well connected via off road trails and bike lanes. Although not shown on the Map, the Waterfront Trail extends along Lakeshore Road in Burlington extending east through the GTA and south to the Niagara Region. The two enclosed regional shopping centres are also connected to the network via bike lanes, as are three of the four power nodes. Eleven of the seventeen supermarkets can also be accessed from the cycling network. It is important to recognize, however, that 37
regardless of the overall connectivity to the network, barriers to cycling safety can still exist in terms of entering and exiting shopping centres and in terms of on site movement. This is being addressed as part of the urban design components of the Commercial Strategy. 38
FIGURE 3 12: BURLINGTON TRANSIT ROUTE MAP 39
FIGURE 3 13: 400 METRE RADIUS AROUND SUPERMARKETS 40
FIGURE 3 14: MAJOR RETAIL NODES AND BURLINGTON S CYCLE/TRAIL NETWORK 41
In summary, Burlington s major retail centres are well connected via the transit system, but are much less accessible for pedestrians and cyclists. 3.6 POTENTIAL FUTURE COMMERCIAL DEVELOPMENTS Figure 3 15 summarizes the potential future commercial developments based on information provided by City of Burlington planning staff. Figure 3 16 identifies the location of these opportunities. The potential developments have been subdivided into four groups: Immediate Development Prospects These are active applications that have recently been or are close to receiving full planning approvals. Other Proposed Developments Other applications received by the Planning Department in various stages of the approval process. Significant Undeveloped Designated and Zoned Sites These are vacant lands within existing commercial nodes, which are zoned for retail commercial uses, but are not yet subject to planning and/or building permit applications. Other Potential Commercial Development Sites These are sites identified by the City of Burlington Planning Department as having potential for future commercial development. They are a variety of sites, both serviced and un serviced. Most of the serviced properties are zoned for mixed commercial residential or commercial employment uses and are restricted in the amount of commercial space that can be developed. This category also includes the 225,000 square foot IKEA outlet, which would be vacated, if the planning application facilitating the relocation of the store to a site at Walkers Line and the QEW is approved. In addition to these future developments, the Zellers stores at Burlington Mall and Millcroft Centre are being converted to Target department stores. It is assumed that the Target stores will generate higher sales volumes and be generally more competitive than the former Zellers outlets. Target has also partnered with Sobeys to provide a selection of grocery items, but their first Canadian stores do not to contain supermarket scale food components. A large scale proposal of note would be an application by IKEA to relocate and expand its current operations at Plains Road and the QEW to Walkers Line and the QEW. The proposal would include a retail outlet, warehouse, and head office. The commercial component would comprise just over 300,000 square feet. The intended property is in a designated Business Corridor, which would permit only a limited range of commercial uses. Consequently an Official Plan Amendment and rezoning would be required to facilitate this development. As we understand, planning staff is recommending approval of this application, which has not yet been approved by Council. 42
As indicated in Figure 3 15 the immediate development prospects would add some 125,000 square feet to the City. The undeveloped designated sites, if developed would add some 347,000 square feet, while the other proposed developments would add some 721,000 square feet. In total if all of these developments proceed, they would add some 1,194,000 millions square feet to the Burlington Inventory. Over half of this space would comprise the expansion to the existing regional commercial node at Dundas and Appleby Line in northwest Burlington, which generally has the requisite planning approvals in place. In addition to these sites, are a variety of other potential sites with commercial permissions. For the most part these are sites with mixed use permissions where commercial space can be included in conjunction with other development. These properties also include the existing IKEA site, which will be available for redevelopment/re tenanting, if IKEA relocates as is currently proposed. There are also a range of lands designated Business Corridor, which have not been shown in Figure 3 15, but have permissions for a limited range of commercial uses. 43
FIGURE 3 15: POTENTIAL FUTURE COMMERCIAL DEVELOPMENTS Immediate Development Prospect Site Size Proposed Commercial Space Address Zoning Zone Description Maximum Commercial Space Permitted (SM) Hectares Acres Proponent SM SF 2042 2080 Lakeshore Rd H DW 374 Downtown Mixed Use 0.8 2.0 Mayrose Tycon (Bridgewater) 1,025 11,029 181 Plains Rd. W MXG 239 Mixed Use General 1,800 0.9 2.3 Dawn Victoria Homes 344 3,701 18 Plains Rd. W MXG Mixed Use General 1,800 0.7 1.8 EMSHIH Development Inc. / Signature Retirement Living 1,000 10,760 1940 Ironstone Dr. UCR1 388 Uptown Mixed Use 1,200 0.6 1.4 Appleby Burlington Ltd. 1,311 14,106 2424 Queensway Dr. CN2 387 Neighbourhood Commercial 300 0.4 1.0 Ren's Pet Depot 1,000 10,760 392 398 Pearl Street DW 417 Downtown Mixed Use 555 0.3 0.7 Riechman's Seniors Building 500 5,380 1893 Appleby Line UCR3 270 Uptown Mixed Use 575 0.5 1.2 Williamsburg Seniors Holding Inc. 612 6,585 3041 3061 Walkers Line CN1 416 Neighbourhood Commercial 5,850 2.4 6.0 Embee Properties 5,850 62,946 Total Short Term Total Space 11,642 125,268 Other Proposed Developments Site Size Proposed Commercial Space Address Zoning Zone Description Maximum Commercial Space Permitted (SM) Hectares Acres Proponent SM SF 3455 North Service Rd. BC1 Business Corridor 9.9 24.5 IKEA (Excluding Head Office and Warehouse) 28,567 307,381 501 515 John/2027 Maria DC Downtown Mixed Use 0.4 0.9 Carriage Gate/Medica One 2,000 21,520 2089 2095 Fairview Street MXT 386 Mixed Use Transit Station 1.9 4.6 Molinaro Group 1,625 17,485 4140 Fairview St. MXG Mixed Use General 1,800 1.8 4.4 DiCarlo Homes 1,630 17,539 3011 Appleby Line CR 312 Regional Commercial 13,935 6.0 14.8 Calloway REIT Inc. 15,000 161,400 3251 Appleby Line CR 408 Regional Commercial 26,670 15.2 37.5 Lowes 13,138 141,365 5210 5236 Dundas Street ROH 4 /D Development Zone/Residential 1.2 2.9 ADI Development Group 435 4,681 3505 Dundas Street H CN1 321 Neighbourhood Commercial 4,645 1.9 4.7 Embee Jovic 4,645 49,980 Total Other Proposed Total Space 67,040 721,350 Significant Undeveloped Designated and Zoned Sites Site Size Estimated Commercial Space Address Zoning Zone Description Maximum Commercial Space Permitted (SM) Hectares Acres Description SM SF 933 Brant St. CR 351 Regional Commercial 0.4 1.0 Expansion Potential to Existing Commercial Node 1,000 10,760 2301 Appleby Line CR Regional Commercial 3.2 7.8 Expansion Potential to Existing Commercial Node 8,000 86,080 2515 Appleby Line CR Regional Commercial 0.5 1.1 Expansion Potential to Existing Commercial Node 1,200 12,912 3251 Appleby Line CR 408 Regional Commercial 26,670 15.2 37.5 Remaing Lands Excluding Lowes 13,532 145,604 3091 Appleby Line H CR 418 Regional Commercial 8,550 3.7 9.2 Approved Site with Commercial Potential 8,550 91,998 Total Expansion Potential 32,282 347,354 44
Other Potential Commercial Development Sites Address Zoning Zone Description Maximum Commercial Space Permitted (SM) Hectares Acres 1065 Plains Rd. E CR Regional Commercial 5.1 12.6 3232 Tremaine Rd. D Development Zone 0.8 2.0 3278 Tremaine Rd. D Development Zone 0.4 1.0 5463 Dundas St. D Development Zone 48.8 120.6 5421 Dundas St. D Development Zone 17.7 43.8 5401 Dundas St. D Development Zone 2.2 5.6 1309 Appleby Line D Development Zone 7.4 18.2 421 John St. DC Downtown Mixed Use 0.4 1.0 391 Brant St. DC Downtown Mixed Use 0.3 0.7 3119 North Service Rd. CE 37 Employment Commercial 11.1 27.5 3119 North Service Rd. CE 37 Employment Commercial 1.4 3.4 2200 Industrial St. CE 34 Employment Commercial 15,800 1.4 3.5 2210 Industrial St. CE 34 Employment Commercial 15,800 1.2 2.9 1070 Waterdown Rd. H GE1 57 General Employoment (1 3.7 9.1 4495 North Service Rd. GE1 General Employoment (1 10.5 26.0 1021 Emery Ave. GE2 General Employoment (1 1.7 4.1 101 Masonry Crt. MXC 26 Mixed Commercial Corridor 5,600 5.1 12.6 4415 Fairview St. H MXC 414 Mixed Commercial Corridor 5,600 6.5 16.0 1167 Plains Rd. E MXE Mixed Use Employment 500 0.8 2.0 1178 Plains Rd. E MXE Mixed Use Employment 500 0.5 1.4 1215 Appleby Line MXE Mixed Use Employment 500 1.2 3.0 5091 Fairview St. MXE Mixed use Employment 500 1.3 3.2 277 Plains Rd. E MXG Mixed Use General 1,800 2.5 6.2 457 Plains Rd. E MXG Mixed Use General 1,800 0.7 1.8 71 Plains Rd. E MXG Mixed Use General 1,800 0.4 0.9 769 Brant St. MXG 8 Mixed Use General 1,800 0.3 0.7 779 Brant St. MXG Mixed Use General 1,800 0.1 0.2 1200 King Rd. See 4000 3 Mixed Use/Gen Employment 49.1 121.4 561 Wedgewood Dr. CN2 Neighbourhood Commercial 0.5 1.2 1150 Plains Rd. W CN2 Neighbourhood Commercial 0.6 1.4 5001 Corporate Dr. UCR3 273 Uptown Mixed Use 0.2 0.4 0000 Burlington Spcls See 1642 9.4 23.2 Notes Existing IKEA (225,694 SF) Approx 3.4 Hectares Developed with Leons Store Portion Near Road Designated Mixed Use Employment Split Zoned 3.4 HA vacant Partly Occupied 1,289 M of site area undeveloped Parking Lot Potential Redevelopment Parking Lot Potential Redevelopment Pinedale Plaza 4,823 M Fill On Property and Environmental Constraints 1) Lands designated General Employment on this table are overlain with a Mixed Commercial Corridor designation on themajor street front. Source: urbanmetrics inc. based on information provided by the City of Burlington. 45
FIGURE 3 16: LOCATION OF POTENTIAL FUTURE COMMERCIAL DEVELOPMENTS Source: urbanmetrics inc. based on information provided by the City of Burlington 46
3.7 COMPETITIVE RETAIL FACILITIES OUTSIDE BURLINGTON The City of Burlington is part of a broader regional commercial structure which spans the Greater Toronto Area. The City is most influenced by the commercial nodes in Oakville and Hamilton. Oakville has traditionally been underserved in terms of regional retail facilities and has tended to rely on facilities in its neighbouring municipalities, including Burlington. In 2007, a major retail power centre development opened in Oakville at Burloak Drive and the QEW on the Oakville/Burlington border. At 530,000 square feet, the Rio Can Burloak Centre is anchored by a Home Depot, a Cineplex Odeon and a Longos supermarket and contains a range of mostly non food retail tenants. While this development could serve as an intervening opportunity, reducing inflow into Burlington from Oakville, the license plate surveys conducted at the major Burlington retail nodes indicate that the retail sales volumes from Oakville have persisted. Potentially, the lack of a department store anchor has reduced the effectiveness of the Burloak power centre in terms of diverting Oakville shoppers. In 2013, the Zellers at Hopedale Mall in south central Oakville will be converted to a Target department store, which may serve to influence non food sales in southeast Burlington and south Oakville. In Hamilton, the closest commercial competition to Burlington would be Eastgate Square to the south, and the community of Waterdown to the northwest. Eastgate Square is a 550,000 square foot regional shopping centre on Centennial Parkway anchored by a Sears department store and a Fortinos Supermarket. It is currently undergoing a major renovation to re tenant the former Walmart, which recently vacated the shopping centre. The expansion will add SportChek, Winners, Urban Planet, as well as a range of other ancillary tenants. The Walmart store has relocated and expanded on a new Smart Centres power centre at Centennial Parkway and the QEW, adjacent to the Skyway Bridge connecting to Burlington. This development may serve to constrain some inflow into Burlington in the future. Since the 2003 Burlington Commercial Study, significant commercial expansion has occurred within the Hamilton community of Waterdown adjacent to the City of Burlington, including the development of a major power center node at the intersection of Highway 6 and Dundas Street (Highway 5). This node now contains approximately 600,000 square feet of power centre retail space, including Walmart, Canadian Tire, Rona, and Zellers (Under Conversion to Target). This node currently represents approximately half of the 1.2 million square feet existing within the former community of Waterdown 8, with vacant lands available for further expansion. In addition, the Waterdown Secondary Plan, which would expand the Waterdown urban area to the east, would add additional district and local serving retail sites on Dundas Street. This development has likely curtailed inflow from the Waterdown community, as it has added anchor tenants that were not previously available to local residents. 8 Based on an inventory conducted by Malone Given Parsons, Waterdown Bay Landowners Market Impact Study, August 2011. 47
In summary, Burlington has seen considerable expansion in its commercial inventory over the past ten years, with growth outpacing population increases. It currently has a commercial supply on a per resident basis that exceeds that in most urban GTA municipalities. However, its overall vacancy rate suggests that the current retail space supply is in balance with market requirements, which has been bolstered by above average incomes and a strategic location with respect to the western GTA highway network. There is just over million square feet of additional commercial space (representing approximately 10% of the current inventory) proposed or approved within the City, with the potential for smaller scale commercial development on a number of other mixed use and mixed employment sites. In the future, there may be some reduction in inflow from Hamilton due to new development in Waterdown and near the Centennial Parkway/QEW interchange, although this is not expected to significantly affect overall demand for commercial space within Burlington. 48
4 THE CITY OF BURLINGTON S TRADE AREA An evaluation of the retail market in Burlington requires an understanding of the demand and supply factors that influence the need for new retail and service facilities. Essential to this evaluation is the delineation of the trade area or market area served by the City and the determination of population and per capita income levels within this area. 4.1 TRADE AREA DEFINED A trade area typically represents the geographic area from which a retail development (or retail area) would normally expect to derive the majority of its sales volume. The physical size of a trade area typically varies due to outside factors such as the local road network, natural physical barriers (e.g., rivers, bridges, etc.) and the proximity of competing shopping destinations. These influences can all serve to limit and otherwise define the geographic drawing power of a retail area. Furthermore, retail gravity, or the number and concentration of stores at a shopping node or venue, can define the attractiveness of a retail destination. An area where many retail alternatives and stores are concentrated enhances the consumer drawing power and increases the distance consumers are willing to travel to shop there. For the City of Burlington, competitive retail centres that exist in Hamilton, Oakville and other neighbouring communities will continue to influence the scope of retail opportunities in Burlington. These existing shopping opportunities and other proposed retail developments in and around these communities will continue to define and limit the trade area for the City of Burlington. To estimate the extent of Burlington s Trade Area, we have relied on licence plate surveys conducted at selected shopping destinations located in and around the City of Burlington; the results of on street intercept surveys conducted in the City s downtown; our understanding of the inventory of commercial space in Burlington; and the major retail opportunities in neighbouring municipalities. The following subsections provide an overview of the various research and analysis that was undertaken as input to the delineation of the City s Trade Area. 4.1.1 LICENCE PLATE SURVEYS The licence plate surveys were conducted over a three week period in the Fall of 2012, including the last two weeks of September and the first of October. A total of 1,849 licence plates were collected at six different shopping destinations located in or near the edges of the City of Burlington, including : Burlington Mall, Mapleview Centre, Burlington Power Centre (Brant/QEW), Millcroft Centre, Appleby Dundas Power Node, and Burloak Centre (Oakville). The detailed results of these surveys have been provided in Appendix A. 49
Although licence plate surveys provide a general indication of customer origins, they can have some limitations. For example, they do not capture pedestrians or persons travelling by means such as public transit. Although our methodology attempts to exclude shopping centre employees and trades people working at a shopping centre, invariably some non shoppers may have been included in the sample. In addition, some corporate leased vehicles or rental cars may be registered to the company and not the person driving the vehicle. Finally, the licence plate data obtained by the Ministry of Transportation for vehicles registered to rural addresses often provides the location of a nearby post office box only and not the dissemination area of the owner s actual location of residence. The summary results from the licence plate surveys conducted at Burlington shopping destinations (i.e., excluding Burloak Centre) are illustrated in Figure 4 1 on the following page. As shown, the survey results highlight a strong concentration of customers who originated from within Burlington; the primary market area for the City s retail and service commercial facilities. In addition, however, the five Burlington retail locations at which surveys were conducted also attracted a significant number of customers from nearby communities to the immediate east and west of the City. In particular, the inflow from Western Oakville, Dundas and Lower Hamilton was significant; likely as a result of the accessibility provided by the Queen Elizabeth Way (QEW) and Highway 403. Figure 4 2 provides a detailed summary of the distribution of customer origins for each of the five Burlington retail locations at which surveys were conducted, as well as for the nearby Burloak Centre in Oakville. As might be expected, the local serving retail facilities in Burlington including Millcroft Centre and the Appleby Dundas Power Node had a more focused customer draw, whereas some of the more regionally oriented shopping centres (e.g., Mapleview Centre, Burlington Power Centre) drew a larger portion of their customers from outside the City. Overall, approximately 50% of the licence plates surveyed at Burlington retail locations were associated with customers originating from within the City of Burlington, which represents the Primary Zone of the Trade Area considered in our analysis. An additional 11% of the licence plates surveyed originated from within one of the two Secondary Zones identified, which includes the western portion of Oakville and Dundas/Lower Hamilton, respectively. These results indicate a typical inflow of customers from outside the Trade Area and further confirm that Burlington commercial facilities derive the majority of their sales volume from local residents (i.e., residents of the City of Burlington). 50
FIGURE 4 1: CITY OF BURLINGTON LICENCE PLATE SURVEY RESULTS, MAP OF CUSTOMER ORIGINS SOURCE: urbanmetrics inc., based on licence plate survey results undertaken in September and October, 2012. 51
FIGURE 4 2: CITY OF BURLINGTON LICENCE PLATE SURVEY RESULTS, CUSTOMER ORIGIN DISTRIBUTION SUMMARY NUMBER OF LICENCE PLATES Trade Area Secondary Zone Secondary Zone Survey Location Primary Zone TOTAL TRADE AREA Outside Trade Area TOTAL 1 East West (Burlington) (West Oakville) (Lower Hamilton) Burlington Mall 178 13 21 212 89 301 Mapleview Centre 119 20 28 167 135 302 Burlington Power Centre 126 15 19 160 132 292 Millcroft Centre 182 15 7 204 80 284 Appleby Dundas Node 161 31 6 198 84 282 Burloak Centre 92 73 20 185 101 286 TOTAL 858 167 101 1,126 621 1,747 Burlington Locaons Only (excluding Burloak Centre) 766 94 81 941 520 1,461 SUMMARY PERCENTAGE OF LICENCE PLATES Survey Location Primary Zone (Burlington) Trade Area Secondary Zone East (Oakville) Secondary Zone West (Lower Hamilton) TOTAL TRADE AREA Outside Trade Area TOTAL 1 Burlington Mall 56.7% 4.1% 6.7% 67.5% 28.3% 95.9% Mapleview Centre 37.8% 6.3% 8.9% 53.0% 42.9% 95.9% Burlington Power Centre 40.0% 4.8% 6.0% 50.8% 41.9% 92.7% Millcroft Centre 60.5% 5.0% 2.3% 67.8% 26.6% 94.4% Appleby Dundas Node 53.5% 10.3% 2.0% 65.8% 27.9% 93.7% Burloak Centre 30.4% 24.1% 6.6% 61.1% 33.3% 94.4% TOTAL 46.4% 9.0% 5.5% 60.9% 33.6% 94.5% Burlington Locaons Only (excluding Burloak Centre) 49.5% 6.1% 5.2% 60.9% 33.6% 94.5% SOURCE: urbanmetrics inc., based on licence plate survey results undertaken in September and October, 2012. 1 Totals exclude licence plate survey records for which detailed location information (i.e., dissemination areas) were unavailable from the Ministry of Transportation. These records account for approximately 5% of the total survey sample. 52
4.1.2 DOWNTOWN SURVEY ORIGINS Similarly to the licence plate survey research presented in the previous section, we have also relied on the results of on street intercept surveys undertaken by urbanmetrics in Downtown Burlington in order to delineate the Trade Area for the City. As detailed in Section 2 of our earlier Interim Commercial Strategy Discussion Paper on the downtown, a total of approximately 300 intercept surveys were completed with local residents, employees, visitors and other patrons of Downtown Burlington between September and October of 2012. Figures 4 3 and 4 4 provide a summary of the geographic distribution of patrons of Downtown Burlington, based on postal code information that was obtained directly from respondents who participated in the on street intercept surveys. As shown, approximately 80% of the respondents surveyed originated from within the City of Burlington (i.e., the Primary Zone of the Trade Area). Moreover, the vast majority of the individuals surveyed currently reside in the southern portion of Burlington (i.e., south of the Queen Elizabeth Way and Highway 403). In addition, some 14% of respondents originated from the neighbouring communities of Oakville and Hamilton. Although only a portion of the respondents who completed this survey were specifically visiting the downtown to shop, the results of these surveys provide additional insight as to the extent to which the various retail and service commercial facilities located in Downtown Burlington attract customers from outside the City s core, as well as beyond. Based on the results of our research, it is evident that from a commercial perspective Downtown Burlington currently serves primarily as a local serving retail node and does not attract a significant portion of its customers from outside the City. FIGURE 4 3: DOWNTOWN BURLINGTON ON STREET INTERCEPT SURVEY RESULTS, RESPONDENT ORIGIN DISTRIBUTION Location/Community # of Survey Respondents % of Total City of Burlington 232 79.5% Burlington South (south of Queen Elizabeth Way and Highway 403) 201 68.8% Burlington North (north of Queen Elizabeth Way and Highway 403) 31 10.6% Other Nearby Communities 40 13.7% Town of Oakville 9 3.1% City of Hamilton 31 10.6% All Other Locations 20 6.8% Grand Total 292 100.0% SOURCE: urbanmetrics inc., based on the results of on street intercept surveys undertaken in Downtown Burlington between September and October, 2012. 53
FIGURE 4 4: DOWNTOWN BURLINGTON ON STREET INTERCEPT SURVEY RESULTS, MAP OF RESPONDENT ORIGINS SOURCE: urbanmetrics inc., based on the results of on street intercept surveys undertaken in Downtown Burlington between September and October, 2012. 54
4.2 BURLINGTON TRADE AREA Based primarily on the results of the various survey research presented in the previous sections, as well as our detailed understanding of the inventory of commercial space in Burlington plus the major retail opportunities in neighbouring municipalities, we have delineated a Trade Area for the City of Burlington. This geographic area has served as the basis for our market supply and demand analysis, as summarized throughout the balance of this report. The City of Burlington is recognized as the Primary Zone of the Trade Area, from which the vast majority of expenditures at the City s commercial facilities will be derived. We have also recognized the expenditures expected to be derived from the surrounding area as well. For this reason, two secondary zones have been delineated, including the Secondary Zone East, which includes part of western Oakville and the Secondary Zone West, which includes all of Lower Hamilton and the community of Dundas. The following provides a brief overview of the geographic extent and the general characteristics of each of these three trade area zones. Primary Zone (City of Burlington) This zone comprises the City of Burlington in its entirety, generally extending north of Lake Ontario; south of Derry Road; and between Highway 6/Milburough Line and Burloak Drive in the west and east, respectively. Secondary Zone East (Western Oakville) This zone comprises the western portion of the Town of Oakville, which is situated to the immediate east of the City of Burlington. This zone is generally bound by Burloak Drive in the west (i.e., the shared municipal boundary with the City of Burlington); Highway 407 and Lower Base Line in the north; Sixteen Mile Creek in the east, and Lake Ontario in the south. Several of the City of Burlington s major retail centres are easily accessible to Western Oakville residents via the Queen Elizabeth Way (QEW) and other major east west traffic corridors that extend between Burlington and Oakville (e.g., Dundas Street, New Street/Rebecca Street, and Lakeshore Road). Secondary Zone West (Lower Hamilton & Dundas) This zone comprises a large portion of urban Hamilton, including the entire Lower Hamilton area, as well as the community of Dundas. It generally extends west of Stoney Creek (i.e., Gray Road/Queenston Road/Centennial Parkway South); north east of the Niagara Escarpment; and south of Hamilton Harbour/Burlington Bay (i.e., the shared municipal boundary with the City of Burlington). The City of Burlington is immediately accessible from Lower Hamilton via the Queen Elizabeth Way (Skyway Bridge), while residents of Dundas can easily travel to Burlington via Highway 403. Figure 4 5 on the following page provides a map of the three major Burlington Trade Area zones identified above. For the purposes of our analysis, recognizing the limitations of the licence plate surveys summarized earlier, plus the size, scale and drawing power of the centres surveyed, urbanmetrics estimates the annual average Non Food Store Retail (NFSR) inflow sales from outside the Trade Area at 15%. This accounts for more local drawing power of lower order retail space within the City of Burlington. As a result of the local nature of food store shopping patterns, the inflow rate used for the Food Store Retail (FSR) category is based on the City of Burlington s 55
municipal boundaries; not the full extent of the City s Trade Area (i.e., the Primary Zone only). For the FSR category, the inflow rate is estimated at 20% from outside Burlington, with most flowing from within the Trade Area. FIGURE 4 5: CITY OF BURLINGTON TRADE AREA SOURCE: urbanmetrics inc. 56
Figure 4 6 illustrates the principal differences between the 2003 and 2012 Trade Areas. As illustrated in this figure, the primary differences are that: The 2003 Trade Area did not include any portion of the Town of Oakville, which now contributes more to Burlington s retail sales than the Hamilton portion of the Trade Area. The 2003 Primary Zone included the community of Waterdown, which now contributes minimal to Burlington s retail sales. This community was also omitted from the Primary zone for administrative reasons in that it is outside of the City of Burlington. The 2003 Secondary Zone included the rural portions of Burlington and Flamborough. The current Trade Area incorporates all of Burlington into the Primary Zone. The rural portions of the former municipality of Flamborough have been analyzed as inflow from outside the Trade Area. There are also some minor variances in the portion of lower Hamilton included in the 2003 and 2012 Trade Areas. In general, the 2003 study assumed lower levels of inflow than the current study. As noted above, the inflow in 2012 is calculated at 15%, where as in 2003 for most categories, inflow was estimated at between 7.5% and 8.5%, with the exception of home furnishings and warehouse membership club, where in flow was estimated at 30%. In summary, based on the empirical evidence conducted as part of the 2012 study, the strengthening of Burlington s commercial sector has resulted in an increased draw from Oakville, while at the same time the new power retail development which has occurred at Highway 5 and 6, has reduced the spending influence of Waterdown residents within the Burlington market. 57
FIGURE 4 6: 2003 AND 2012 BURLINGTON TRADE AREAS 58
4.3 TRADE AREA POPULATION PROJECTIONS In order to project the future retail market demand in Burlington to 2031, it is necessary to estimate the future population in the City and the defined Trade Area. Population change, in addition to income and expenditure levels, is a major factor influencing the level of retail sales and space warranted in a given area. Forecast population levels for each Trade Area zone are urbanmetrics estimates based on Statistics Canada Census data, population projections obtained from the various municipalities in the Trade Area, and the population forecasts in Schedule 3 of the Ministry of Infrastructure s Places to Grow, Growth Plan for the Greater Golden Horseshoe (2006). As summarized in Figure 4 7, the population of the Trade Area is expected to increase from a total of 497,700 persons in 2012 to an estimated 543,600 persons in 2031. This represents a total market growth of approximately 46,000 individuals during this period. As indicated in Figure 4 7, it is important to note that the majority of this growth is anticipated to occur in the Secondary Zone East and Secondary Zone West portions of the Trade Area; which are contained within the neighbouring municipalities of Hamilton and Oakville. The City of Burlington portion of the Trade Area accounts for approximately 27% of the growth that is forecast to occur by 2031. Given that the majority of Burlington s available Greenfield lands will be fully developed in the near future (2015), it is expected that most of the growth forecast to take place in the City over the next two decades will occur in intensification areas. In fact, as per the findings of the City of Burlington s 2008 Intensification Study, an estimated 33% of future population growth is projected to occur in the City s Urban Growth Centre (i.e., Downtown Burlington) or Urban Growth Corridors (i.e., Plains Road and Fairview Street). Moreover, it is estimated that approximately 60% of the total residential units created in Burlington between 2006 and 2031 will be through intensification 9. The major role that intensification is expected to play in terms of accommodating future growth in Burlington will have a significant impact on how the commercial structure is planned. For example, in addition to the Greenfield retail development that has occurred in the City in recent years, significant emphasis will need to be placed on expanding the existing commercial infrastructure in areas targeted for residential intensification. This represents a substantial departure from how commercial development has taken place across the Greater Toronto Area in the past; requiring a focus on redevelopment instead of new development in order to meet the expected demand for new commercial uses. 9 City of Burlington, Development and Infrastructure Division, Planning Department report to the Chair and Members of the Community Development Committee, RE: Burlington Intensification Study, Preliminary 2031 Residential and Employment Intensification Estimates (2008). 59
FIGURE 4 7: CITY OF BURLINGTON TRADE AREA, HISTORIC AND FORECAST POPULATION (2006 2031) HISTORIC 1 FORECAST 2 Trade Area Zone 2006 2011 2012 2016 2021 2026 2031 Total Growth (2012 2031) Primary Zone 171,300 182,700 183,100 184,500 188,000 191,400 195,700 12,600 Average Annual Growth Rate 1.3% 0.2% 0.2% 0.4% 0.4% 0.4% Average Annual Growth 2,280 400 350 700 680 860 Secondary Zone East 88,900 101,500 102,600 106,800 112,100 114,600 118,200 15,600 Average Annual Growth Rate 2.8% 1.1% 1.0% 1.0% 0.4% 0.6% Average Annual Growth 2,520 1,100 1,050 1,060 500 720 Secondary Zone West 214,500 212,600 212,000 209,600 217,600 217,100 229,700 17,700 Average Annual Growth Rate 0.2% 0.3% 0.3% 0.8% 0.0% 1.2% Average Annual Growth 380 600 600 1,600 100 2,520 TOTAL TRADE AREA 474,700 496,800 497,700 500,900 517,700 523,100 543,600 45,900 Average Annual Growth Rate 0.9% 0.2% 0.2% 0.7% 0.2% 0.8% Average Annual Growth 4,420 900 800 3,360 1,080 4,100 SOURCE: urbanmetrics inc. All population figures rounded to the nearest 100 persons. 1 Based on Statistics Canada Census data, adjusted for net under coverage. 2 Population for forecast years based on urbanmetrics projections, which were derived from population projections obtained from the various municipalities in the Trade Area: Regional Municipality of Halton Best Planning Estimates of Population, Occupied Dwelling Units and Employment, 2011 2031 (June 2011); City of Hamilton Estimate of Unit and Population Growth for City of Hamilton, 2006 2031, based on 2006 GRIDS Traffic Zone analysis (April 2008); Ministry of Infrastructure The Growth Plan for the Greater Golden Horseshoe, Schedule 3 (2006). 60
4.4 TRADE AREA INCOME LEVELS Per capita income levels provide a reasonable basis for determining the retail expenditure levels of the Trade Area population. Based on Statistics Canada 2006 Census data, which reports income levels for 2005, we have calculated the per capita income index for Burlington and each of the two secondary zones, as detailed in Figure 4 8. FIGURE 4 8: CITY OF BURLINGTON TRADE AREA, PER CAPITA INCOME LEVELS (2006) Municipality/Region Per Capita Income Index to (2005) Province Primary Zone (City of Burlington) $ 37,736 1.23 Secondary Zone East (Western Oakville) $ 42,138 1.37 Secodary Zone West (Lower Hamilton) $ 24,571 0.80 Ontario $ 30,723 1.00 SOURCE: urbanmetrics inc., based on Statistics Canada Census data (2006). Figures represent 2005 income levels. As shown, per capita income levels are well above the provincial average in the Primary Zone (i.e., the City of Burlington), as well as in the Secondary Zone East. This is consistent with the demographic information summarized in Section 2.2 of this report, which indicated that income levels are generally quite high throughout the Regional Municipality of Halton. By contrast, per capita income levels are nearly 20% below the provincial average in the western portion of the Secondary Trade Area, which is comprised exclusively by the Lowe Hamilton community. 4.5 TRADE AREA EXPENDITURES In order to determine the total volume of retail expenditures available within the Trade Area, it is necessary to estimate expenditures by major store type. Utilizing Statistics Canada Retail Trade data, we have estimated the per capita expenditures in Ontario for Food Store Retail (FSR) and Non Food Store Retail (NFSR) in accordance with the North American Industry Classification System (NAICS) (See Appendix D for detailed listing). This data has been utilized as the basis for the per capita expenditure estimates for the Trade Area. 61
4.5.1 PER CAPITA NON FOOD STORE RETAIL (NFSR) EXPENDITURES In this section, we have evaluated the future market potential available for Non Food Store Retail (NFSR) facilities in the City of Burlington. NFSR includes the following major trade groups or expenditure categories: General Merchandise (including Department Stores); Clothing & Accessories Stores; Furniture, Home Furnishings & Electronics Stores; Miscellaneous Retailers; Health & Personal Care Stores; Building & Outdoor Home Supplies Stores; and, Automotive Parts & Accessories Retailers. Based on Statistics Canada Retail Trade data, the annualized 2012 average per capita Non Food Store Retail expenditure in Ontario has been estimated at $5,587 (See Appendix D for details). For Trade Area residents, the 2012 average per capita Non Food Store Retail expenditures shown in Figure 4 9 have been estimated based on the income relationship between the Province and the three zones of the Trade Area, plus an expenditure regression equation that calculates an expenditure index based on income levels. The 2012 average per capita NFSR expenditure is also expected to increase for all Trade Area residents at a rate of 1.5% per year on an uninflated basis during the study period (i.e., to 2031). As such, it is important to note that future expenditure levels reflect the 2012 value of the Canadian dollar. The total NFSR expenditure potential of Trade Area residents over the study period has been calculated by multiplying the annualized average per capita NFSR expenditures for each zone by the current and projected population residing in the Trade Area. As indicated in Figure 4 9, the total NFSR retail expenditure potential available from Trade Area residents is estimated at $2,864.3 million in 2012, increasing to $4,024.8 million by 2031. This represents a growth of $1,160.5 million (expressed in 2012 dollars). Again, it should be recognized that the expenditure potential indicated in Figure 4 9 is that which is available from Trade Area residents only, and represents the expenditure potential available to stores located both in and outside the Trade Area. The detailed analysis of potential to Burlington stores, including inflow from non Trade Area residents, is provided in Section 9 of this report. 62
FIGURE 4 9: CITY OF BURLINGTON TRADE AREA, PER CAPITA NFSR EXPENDITURE POTENTIAL 2012 Dollars 2012 Province of Ontario Per Capita NFSR Expenditure $ 5,587 1 2012 Dollars 2012 2016 2021 2026 2031 Primary Zone (Burlington) Income Index to Province 122.80 NFSR Expenditure Index to Province 109.10 Per Capita NFSR Expenditure $ 6,095 $ 6,461 $ 6,918 $ 7,375 $ 7,832 Population 183,100 184,500 188,000 191,400 195,700 TOTAL NFSR POTENTIAL ($Millions) $ 1,116.0 $ 1,192.1 $ 1,300.6 $ 1,411.6 $ 1,532.7 Secondary Zone East Income Index to Province 137.20 NFSR Expenditure Index to Province 114.90 Per Capita NFSR Expenditure $ 6,419 $ 6,804 $ 7,286 $ 7,767 $ 8,248 Population 102,600 106,800 112,100 114,600 118,200 TOTAL NFSR POTENTIAL ($Millions) $ 658.6 $ 726.7 $ 816.8 $ 890.1 $ 974.9 Secondary Zone West Income Index to Province 80.00 NFSR Expenditure Index to Province 92.00 Per Capita NFSR Expenditure $ 5,140 $ 5,448 $ 5,834 $ 6,219 $ 6,605 Population 212,000 209,600 217,600 217,100 229,700 TOTAL NFSR POTENTIAL ($Millions) $ 1,089.7 $ 1,141.9 $ 1,269.5 $ 1,350.1 $ 1,517.2 TOTAL TRADE AREA TOTAL NFSR POTENTIAL ($Millions) $ 2,864.3 $ 3,060.7 $ 3,386.9 $ 3,651.8 $ 4,024.8 Cumulative Growth $ 196.4 $ 522.6 $ 787.5 $ 1,160.5 SOURCE: urbanmetrics inc. 1 Based on Statistics Canada Retail Trade data. 63
4.5.2 PER CAPITA FOOD STORE RETAIL (FSR) EXPENDITURES Food retailing is typically undertaken close to home, with much shorter shopping trips than for non food shopping. As a result, trade areas for Food Store Retail (FSR) facilities tend to be smaller. For the purposes of our FSR analysis, therefore, we have assumed that the vast majority of spending at Burlington supermarkets and other convenience and specialty food stores will be derived from Burlington residents. Accordingly, we have focused our FSR analysis on the City of Burlington rather than the entire Trade Area, as was done with respect to the Non Food Store Retail (NFSR) category. Inflow from outside the City is still recognized, but at much lower levels than estimated for NFSR stores. Based on Statistics Canada Retail Trade data, the annualized 2012 per capita Food Store Retail expenditure in Ontario has been estimated at $2,230 (See Appendix D for details). Food Store Retail expenditures include those made in supermarkets, grocery stores, and convenience and specialty food stores. For Burlington residents, the 2012 average per capita FSR expenditure shown in Figure 4 10 has been estimated based on the income relationship between the Province and the City of Burlington, plus an expenditure regression equation that calculates an expenditure index relative to income levels. The 2012 annualized average per capita FSR expenditures for Burlington residents are expected to increase at a rate of 0.25% per year on an un inflated basis between 2012 and 2031. As discussed in the underlying assumptions of this report, as well as in the previous section, future changes in expenditure patterns solely due to inflation have not been recognized. Therefore, the future expenditure levels indicated in Figure 4 10 reflect the 2012 value of the Canadian dollar. By multiplying the annualized average per capita FSR expenditure by the current and projected population of the City of Burlington, the total food store potential from City residents has been calculated over the study period. In total, the food store potential available from Burlington residents has been estimated at $417.7 million in 2012. By 2031, this potential is expected to reach $467.5 million; a growth of approximately $49.8 million over the indicated twenty year period (expressed in 2012 dollars). 64
FIGURE 4 10: CITY OF BURLINGTON TRADE AREA, PER CAPITA FSR EXPENDITURE POTENTIAL 2012 Dollars 2012 Province of Ontario Per Capita FSR Expenditure $ 2,230 1 2012 Dollars 2012 2016 2021 2026 2031 Primary Zone (Burlington) Income Index to Province 122.80 FSR Expenditure Index to Province 102.30 Per Capita FSR Expenditure $ 2,281 $ 2,304 $ 2,332 $ 2,361 $ 2,389 Population 183,100 184,500 188,000 191,400 195,700 TOTAL FSR POTENTIAL ($Millions) $ 417.7 $ 425.1 $ 438.4 $ 451.9 $ 467.5 Cumulative Growth $ 7.4 $ 20.7 $ 34.2 $ 49.8 SOURCE: urbanmetrics inc. 1 Based on Statistics Canada Retail Trade data. 65
5 BURLINGTON RESIDENTS SHOPPING PATTERNS Survey research is an integral component of undertaking a retail market analysis, such as that presented in this report. Our research has included licence plate surveys, on street intercept surveys, as well as online and telephone surveys of Burlington consumers. The online/telephone surveys provide information on Burlington residents shopping patterns by store type, as well as the corresponding capture rates for retail and service facilities located in the City. The following section summarizes the key findings of our consumer research relating to the shopping and expenditure patterns of Burlington residents. The detailed statistical tables generated by these surveys, as well as other relevant background information, can be found in Appendix B. A total of some 885 consumer surveys (364 fully completed telephone surveys, 261 fully completed on line surveys and 260 partially complete on line surveys 10 ) with Burlington residents were completed to determine the existing expenditure patterns of municipal residents; establish the existing market shares being captured by City of Burlington retail facilities; and the outflow of sales to stores located outside the City. As illustrated on the map in Figure 5 1, retail expenditures for each store category have generally been categorized into one of ten major retail areas located in Burlington, including: Downtown Burlington, Burlington Mall, Mapleview Shopping Centre, Burlington Power Centre (QEW/Brant), Plains Road Corridor, Fairview Street Corridor, Appleby Dundas Power Node, Millcroft Shopping Centre, Appleby Mall, and All Other Burlington. Similarly, expenditures made outside the City of Burlington have been categorized as follows: Burloak Centre (Oakville), All Other Oakville, Flamborough Power Centre (Waterdown), All Other Hamilton, and All Other Outside of Burlington. 5.1 DISTRIBUTION OF BURLINGTON RESIDENTS EXPENDITURES (2012) Figures 5 2 and 5 3 summarize Burlington residents 2012 expenditure patterns by major store category, including all relevant Non Food Store Retail (NFSR) and Food Store Retail (FSR) subcategories, respectively. Based on our analysis of the online and telephone consumer surveys, we note the following: In all retail categories, Burlington residents undertook the majority of their shopping within the City of Burlington. In fact, approximately 93.4% of the total value of FSR expenditures, 85.1% of NFSR expenditures, and 83.4% of Restaurant expenditures made by Burlington residents were attributable to retail facilities located in Burlington. 10 Partially complete surveys were terminated by the respondents prior to reaching the end of the survey document. Where sufficient information to categorize the respondent was available, some results from partially completed surveys were incorporated. 66
In some store categories, however, Burlington residents made up to 42.4% of their expenditures at retail facilities located in other municipalities. For example, the greatest amount of outflow is currently taking place in the Building & Outdoor Home Supplies category, whereas much lower levels of outflow are occurring in the Health & Personal Care Store and Supermarket categories. This is typical of pharmacies, drug stores and food store retailers, which tend to be more neighbourhood oriented and local serving in nature. Similarly, more than three quarters of Burlington residents expenditures at General Merchandise; Clothing & Accessories; Furniture, Home Furnishings & Electronics; Miscellaneous Retail and Specialty Food retailers were made locally (i.e., at Burlington shopping destinations). Approximately 14% of Burlington residents NFSR expenditures in 2012 were made outside the City of Burlington. Of this total, approximately half were made at retail facilities located in either Oakville or Hamilton. As such, a relatively small portion of Burlington residents expenditures were made beyond the municipalities that are located immediately adjacent to the City. Burlington Mall, Mapleview Centre and Burlington Power Centre were the three individual retail areas that captured the greatest portion of Burlington residents NFSR expenditures. Collectively, these three centres captured approximately 40% of residents total NFSR expenditures. Capture rates for these three centres were particularly strong in the General Merchandise (67.8%) and Clothing & Accessories (51.1%) store categories. Downtown Burlington accounted for nearly one quarter of the total Restaurant expenditures made by Burlington residents. It also accounted for more than one tenth of residents Clothing & Accessories, Miscellaneous Retail and Convenience & Specialty Food Store expenditures. In summary, the majority of Burlington residents expenditures are made at Burlington shopping destinations. Although relatively limited, most of the expenditure outflow from the City can be accounted for by retail facilities situated in the neighbouring municipalities of Oakville, and to a slightly lesser extent, Hamilton. 67
FIGURE 5 1: ONLINE/TELEPHONE CONSUMER SURVEY, MAJOR RETAIL NODES SOURCE: urbanmetrics inc. 68
FIGURE 5 2: DISTRIBUTION OF BURLINGTON RESIDENTS EXPENDITURES BY RETAIL AREA & STORE CATEGORY (NFSR) City of Burlington Town of Oakville City of Hamilton All Other General Merchandise 0.7% 1.1% 5.6% 92.6% Clothing & Accessories 6.7% 2.4% 13.9% 77.1% Furniture, Home Furnishings & Electronics 7.3% 2.5% 3.8% 86.3% Miscellaneous Retail 3.5% 3.7% 8.2% 84.6% Health & Personal Care 1.4% 0.7% 1.6% 96.3% Buliding & Outdoor Home Supplies 17.4% 13.6% 11.4% 57.6% Auto Parts & Accessories 2.5% 4.5% 21.2% 71.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% SOURCE: urbanmetrics inc. (2012). 69
FIGURE 5 3: DISTRIBUTION OF BURLINGTON RESIDENTS EXPENDITURES BY RETAIL AREA & STORE CATEGORY (FSR + RESTAURANTS) City of Burlington Town of Oakville City of Hamilton All Other Supermarkets 3.2% 0.5% 1.6% 94.7% Convenience & Specialty Food 4.7% 4.8% 6.8% 83.7% Restaurants 5.0% 1.6% 9.9% 83.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% SOURCE: urbanmetrics inc. (2012). 5.2 ONLINE SHOPPING In addition to questions regarding the recent retail expenditures made by Primary Zone shoppers at retail facilities located in Burlington and other nearby communities, the online/telephone survey included a number of questions related to respondents online shopping habits. As summarized in Figure 5 4, approximately one third (31%) of all respondents indicated that they had done some form of online shopping during the past month. These respondents collectively spent a total of approximately $87,500 online, which represents less than one tenth of the total amount spent by survey respondents at FSR, NFSR and Restaurant facilities during the same period. Figure 5 5 further summarizes the specific type of retail and service products that survey respondents purchased online. As shown, the majority of respondents online expenditures related to service based items, including more than half of which that related to the purchase of various tickets and travel related services (e.g., entertainment events, airline tickets, hotel bookings). By contrast, retail merchandise including music, movie and e book downloads accounted for only one third of the total value of expenditures made by survey respondents. 70
Although not considered specifically in our retail market analysis as it is based exclusively on Statistics Canada Retail Trade data that measures retail spending at actual brick and mortar store locations it is important to note that the extent to which Burlington residents ultimately adopt online shopping over traditional store formats could potentially influence the amount of retail and service commercial space that is required to meet the demands of City residents long term. Based on the results of our consumer surveys, however, it is evident that online shopping currently accounts for only a small proportion of Burlington residents expenditures. Furthermore, some store types such as supermarkets and health and personal care stores (e.g., pharmacies and drug stores) are less likely to be influenced by changes in online shopping behavior, as there is expected to be a continued demand for stores that supply various neighbourhood oriented and convenience related goods and services. FIGURE 5 4: PREVALANCE OF ONLINE SHOPPING AMONG SURVEY RESPONDENTS (MADE ON LINE PURCHASE IN PAST MONTH) No 426 68% SOURCE: urbanmetrics inc. (2012). Yes 193 31% Yes No No Response FIGURE 5 5: DISTRIBUTION OF ONLINE EXPENDITURES BY CATEGORY (VALUE OF EXPENDITURES) Retail Merchandise (including music, movie and e book downloads) 32.9% Tickets and Travel Related Services (including event, airline and hotel tickets) 53.7% All Other Services 13.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% SOURCE: urbanmetrics inc. (2012). 71
6 COMMERCIAL TRENDS How we plan, structure and regulate retail trade... has large effects not only on economic efficiency and consumer satisfaction but on the quality of life and the maintenance of a vital public sphere. 11 The retail industry and retail development in North America is continually evolving, adapting and finding new ways to attract and excite the customer. There is an out with the old movement to create better settings (i.e. image and style) for people activity by creating mixed use nodes that embrace community connections, street life and provide integrated activity. Although big box retailers continue to dominate commercial development in Canada, they are evolving to meet the needs of consumers and emerging planning and urban design policies. A cycle can also be observed in which formats that are filling a market niche thrive, reach the peak of their popularity and success and then lose their position and are superseded and replaced by others. Outlet centres and a wave of retailers looking to set up shop in Canada are hot topics in the retail industry today. Power centres, the new format trend that emerged in the early 1990 s in Canada, continue to enhance their tenant selections and design standards, while traditional enclosed malls are being challenged to remain relevant by expanding, re tenanting and repositioning their properties to maintain their competitiveness. With the arrival of more retailers from the US and abroad, as well as new centre formats, including outlet centres, the evolution continues. Developers are also starting to build more innovative retail and mixed use projects that provide for better pedestrian and transit connectivity and improved design standards that have been missing in the first generation of power centres. In this section we discuss some of the more prevalent trends in the retail industry and built form, including: Power Centres and Large Format Retailers The Broadening of Shopping Centre Merchandising Lifestyle Centres and Hybrid Mixed Use Centres New Urbanism Outlet Centres 11 Graeme Davison, From the Market to the Mall, p.1. 72
Influx of U.S. Retailers to Canada Blurring of the Retail Hierarchy Non store shopping Transit/Active Transportation Supportive Commercial Development 6.1 POWER CENTRES AND LARGE FORMAT RETAILERS Some of the most sweeping changes over the past two decades have been the transition of the shopping centre industry with the evolution of the power centre and the addition of new format retailers. Although Burlington was the location of the last department store anchored enclosed regional shopping centre in Canada (Mapleview Shopping Centre 1990), all new regional scale retail facilities constructed in the City since then have been large format and power centre developments. In fact, even the traditional enclosed Appleby Mall, which was originally constructed in 1971, has recently undergone a transformation to an open air format. New format retailers and power centres have accounted for the greatest portion of new retail floor space constructed in Canada since the early 1990s. They have not only absorbed most new market growth, but in some communities they are cutting into the markets of existing traditional regional centres, particularly with the inclusion of more fashion retailers, as well as downtowns. In some markets, they are also fulfilling the role of a traditional regional centre where none exist. Large format retailers have typically followed three locational models: Low cost locations on industrial designated lands or commercial designated greenfield sites that provide for expansive parking areas and regional accessibility; Brownfield industrial land conversions, whereby older industrial sites are transformed into retail power centres, hybrids and mixed use developments; and Clustering around existing shopping centres and/or existing power centres, which is typically accomplished through both redevelopment and greenfield development and results in regional or super regional retail clusters (e.g. Highway 407/400 super cluster in Vaughan or Yonge Street Corridor near Upper Canada Mall in Newmarket). 73
Traditionally, big box stores fell largely into two categories: 1) those focused on using their sizes to achieve cost savings to the consumer (e.g. Costco); and 2) those that used their scale to provide the maximum assortment of styles, brands and merchandise within a single category (e.g. Golf Town, Indigo/Chapters, Home Depot, PetSmart, Staples). Over the past decade, due to competitive pressures, a greater variety of retailers have developed big box or larger retail formats. Supermarkets and drug stores, for example, are seeking the same locations as power centres. Now these stores are becoming significantly larger, relying on a broader population base. Some retailers are now changing from a strategy of multiple outlets serving local neighbourhoods to much fewer regional serving operations. In some communities, this has had an impact on small and mid sized community shopping centres. As some retailers look to up size, there is also a recent downsizing trend by many large format retailers, and particularly in the U.S. The bigger is better philosophy is being re evaluated by many national chains due to changing customer expectations, online shopping, and an operational trend to lean retail. Smaller stores allow retailers to go into locations that they previously could not consider. These locations often can provide increased accessibility to the customer, reduced building costs and a more focused product offering with a more efficient use of floor space. In the U.S., Walmart, whose Supercentres typically encompass over 185,000 square feet, is experimenting with a number of different models. Walmart Express in Chicago s Wrigleyville Neighbourhood Walmart Express is a 15,000 square foot format store being launched in both urban and rural markets without access to a full size supermarket or where a building a full scale store would be impractical. Walmart Neighbourhood Markets are in the 30,000 to 60,000 square foot range focusing on food and grocery merchandise. In Canada, Walmart has just begun to roll out its smaller store concept, including its Urban 90 90,000 square foot model, recently opened in Scarborough on a 4.5 acres site formerly occupied by a used car lot. Target is also planning smaller format stores in the US that will be 60,000 to 100,000 square feet, compared with 135,000 square feet in a traditional Target. US electronics retailer Best Buy has also announced that it will be reducing its standard store footprint by 20% in the US. These smaller footprint stores provide an opportunity to re introduce major retail chains in downtowns and other commercial areas, which they had abandoned for large greenfield sites. 74
6.2 THE BROADENING OF SHOPPING CENTRE MERCHANDISING The wave of power centre development is having a profound impact on the shopping centre industry, both indirectly and directly. Indirectly, the arrival in Canada of Walmart (in 1994) and the big box specialty sector have been rapidly eroding the market shares once attributable to the traditional department store sector. The newly introduced Walmart Supercentre, with its supermarket scale food component, is also having an impact on supermarket retailers. The Target department store chain, which will begin opening its first Canadian stores in 2013 (including two in Burlington and one in Waterdown and one in Oakville), will be partnering with Sobeys to provide an array of fresh grocery and food merchandise, although it will be on smaller scale than Walmart. Similarly, other non food stores, such as Shoppers Drug Mart have greatly expanded their selection of food and grocery items. The impact of Walmart and other traditional non food retailers has stunted growth in the traditional supermarket sector in recent years. In addition, with the increasing movement of apparel retailers to power centres and the attraction of big box tenants to traditional shopping centres, there is a growing competitive overlap between these two retail forms, not only for new shoppers but also for the same tenants. 6.3 NEW DEVELOPMENT CONCEPTS As an alternative to the power centre, which has been criticized for not adapting to non automobile trips and lacking the aesthetic form and appeal required to attract the more upscale market segment, some development companies are turning to so called lifestyle centres, and mixed use hybrids, including main street retailing, to create community places. Open air and enclosed outlet type centres are also emerging and planned in Canada, marketed as destination locations for value seeking customers. 6.3.1 LIFESTYLE AND HYBRID CENTRES Lifestyle centres have been operating in the United States for about three decades, however, what constitutes a lifestyle centre is often considered a difficult question to answer as more are built and the format evolves to fit different market needs. Not only has the size of lifestyle centres changed over the years, but also their design and tenant mix. The term lifestyle centre is now being referred to as a catch all term for a number of diverse mixed use projects across North America. 75
The International Council of Shopping Centers (ICSC) defines a lifestyle centre as follows: Most often located near affluent residential neighborhoods, this centre type caters to the retail needs and lifestyle pursuits of consumers in its trading area. It has an open air configuration and typically includes at least 50,000 square feet of retail space (GLA) occupied by chain specialty stores. (The whole centre may range from 150,000 to 500,000 square feet.) Other elements differentiate the lifestyle centre role as a multi purpose leisure time destination, including restaurants, specialty food stores, entertainment, and design ambience and amenities such as fountains and street furniture that are conducive to casual browsing. It may be anchored by a largeformat specialty store, a smaller version of a big box store and/or entertainment venues such as cinemas. The primary trade area is ten to twenty kilometers. Lifestyle centres are aiming to strike a balance between the mall shopping experience and the need for big box specialty tenants to create a regional draw. To differentiate lifestyle centres from typical power centres, developers have used theming, internal pedestrian connections, high quality design, and entertainment. Often, the lifestyle centre tries to mimic a Main Street to create a street culture and the provision of public space. Industry experts have often questioned why the lifestyle centre concept has been slow to emerge in Canada. As indicated in a publication by the Centre for the Study of Commercial Activity (CSCA) 12 lifestyle developments in Canada have been minimal due to a few significant differences between the Canadian and American marketplace, including: The cold climate through the long winter means shoppers will not want to walk around a lifestyle streetscape with an open air configuration; The lack of upscale suburban neighbourhoods, and therefore the lack of interest on the part of upscale retailers to enter or expand within the Canadian marketplace; and, The comparative conservatism of Canadian retail development compared to south of the border, which has created reluctance to enter into a perceived higher risk development. The CSCA indicates, however, that open air centres in the form of power centres have been successful in Canada based on their widespread growth, indicating that Canadians are more hardy when it comes to dealing with cold temperatures. In the U.S., the cold climate has not had an impact as there are numerous open air lifestyle centres that have been developed in the northern snowbelt region with design and technology to offer shelter from the elements. In response to the issue of the lack of upscale neighbourhoods in Canada, the CSCA indicates 12 T. Hernandez, Lifestyle Centres in Canada, 2007, CSCA (Ryerson) 76
that, unlike the US, Canada has not witnessed the same degree of suburbanization of affluence; instead Canadian suburbs are immersed in the middle ground, making it harder to identify markets for lifestyle type developments. Despite the fact that lifestyle type centres have been slow to emerge in Canada, there is increased impetus to develop new alternative types of retail space or new formats, including shopping centre hybrids that combine predominant elements from two or more distinct traditional and/or specialty shopping centre types, e.g. power centre, regional mall and lifestyle centres. The CSCA indicates that the traditional power centre has entered the mature stage of its lifecycle and that consumers are fatigued with the concept. In Canada, mixed use hybrid forms of retail development with so called lifestyle components include Quartier DIX30, one of the largest lifestyle centres in Canada located in Brossard, Québec. At full build out, the project is expected to include 2.4 million square feet and attract 21.7 million visitors annually. Other examples of lifestyle centres include The Shops at Morgan Crossing in Surrey, British Columbia. Lifestyle Centre The Shops at Morgan Crossing, Surrey, BC In addition to new centres, existing shopping centres are re inventing themselves with the addition of new lifestyle focused space. As indicated by the CSCA, in some cases, the new format centres can be considered as more sophisticated power centres with design features to soften the function and form of the centres. 77
6.3.2 NEW URBANISM The Province s smart growth and Places to Grow initiatives are encouraging the traditional suburban model of the separation of land uses to be replaced by one that provides for complete communities. This has fostered the concept of new urbanism, which emerged during the 1980s in the U.S., in a counter reaction to urban sprawl. In Canada, the smart growth and the new urbanist movement have inspired suburban development since the 1990s. This approach in community planning, with a focus on the interface with the public domain, is beginning to emerge in GTA communities, including Burlington, where new mixed use projects along Plains Road have successfully integrated ground floor pedestrian oriented retailing as part of medium density residential buildings. The new urbanism approach has resulted in a renewed focus on town centre and pedestrian focused main street retailing in new community developments. The concept of a complete community is the vision for new urbanism projects. The town centre is usually seen as the focal point for residential and employment development creating an environment where people can live, work and shop. In Mixed Use Project on Plains Road some new communities, town centres are developed in an open air, pedestrian friendly format, combining commercial, entertainment, institutional and civic uses. Sidewalk cafes, live work units, public squares and recreation trails are incorporated to introduce humanizing elements into the suburban landscape. Examples of new urbanism developments in Ontario include Cornell, located in Markham, and Oak Park in north Oakville. Both of these areas continue to evolve. Although new urbanism creates the look of a community, there are critics that argue that it does not build the real thing as residents are still chained to their cars for shopping and employment. Furthermore, the retail and employment ambitions envisioned in the planning of the new urbanism communities are not always realized in practice. Many shops on main street locations in new urbanism projects cannot survive on the population within walking distance and therefore, it is important that street front retail and service space have exposure to pass by traffic and be on a major corridor. In Cornell, there is a Town Centre that has evolved to include primarily health services given its close proximity to Markham Stouffville Hospital. Further east of the Town Centre, a commercial spine has evolved along Bur Oak Drive with street front live work units that include a range of primarily local serving retail and service uses. 78
Disera Drive in Vaughan is an example of how main street retailing can be integrated with big box development. As indicated by the photo below. Disera Drive was constructed as part of a Walmart development, whereby the department store and parking area are behind the street related ancillary space. High density developments in the area have helped to support the street related space, which also benefits from the Walmart parking area. Bur Oak Live Work Community, Cornell Disera Drive, Vaughan 79
6.3.3 OUTLET CENTRES The U.S. style outlet centre is set to launch in Canada. Outlet centres are considered a specialized type of retail development having tenant, consumer, and market area characteristics that differ from conventional shopping centres 13. The International Council of Shopping Centres (ICSC) defines a Canadian outlet centre as follows: This specific purpose built centre type consists of separate manufacturers and retailers outlet stores selling their brand name goods at discounted prices, typically selling surplus stock, prior season or slow selling merchandise and especially designer merchandise. These centres are generally not anchored, although certain brand name stores may serve as magnet tenants. Outlet centres can be either open air or enclosed and are between 50,000 to 400,000 square feet (GLA) in most cases. The primary trade area is twenty to fifty kilometres. Tanger Outlet Centre, Westbrook CT Value Retail News, a publication produced by ICSC, further refines the standard ICSC definition of an outlet centre as one in which at least 50% of the tenants are outlet retailers. Historically, outlet centres in the US generally developed adjacent to major highways, often removed from major cities in rural areas to avoid direct competition with the retailers who carry the manufacturer s products. With the US development boom in the 1990 s, outlet centre development moved closer to major metropolitan areas encroaching on traditional regional malls and the department store and fashion retailer trade areas. Others have located in high traffic tourist destinations. In all cases, these outlet centres are considered destinations for the value seeking consumer. 13 International Council of Shopping Centres Canadian Shopping Centre Definitions 80
Tanger, who has been developing outlet centres for some 30 years in the US, has a set of guidelines they follow in evaluating opportunities for the development of new outlet centres (typically 90 stores with about 350,000 square feet). These guidelines, as indicated in Tanger s 2010 Form 10 K report, typically include seeking locations within markets that have at least 1 million people residing within a 50 to 60 kilometre radius with an average household income of at least $65,000 per year, frontage on a major interstate or roadway that has excellent visibility, and a traffic count of at least 55,000 cars per day. Leading tourist, vacation and resort markets that may not have the local population base and that receive at least 5 million visitors annually are also closely evaluated. In Ontario, small outlet centres (i.e. less than 250,000 square feet) have developed primarily in high traffic tourist destinations (e.g. St. Jacobs, Niagara Falls) or in Cookstown Outlet Mall locations with good highway access on a well travelled route (e.g. Cookstown). In Ontario, the first outlet centre in St. Jacobs opened in 1994. Only one new outlet centre has been developed over the past 10 years. In total, there are currently seven outlet centres, including Dixie Outlet Mall which includes a mix of outlet retailers, off price retailers, and large format stores. In Canada, unlike in the US, the outlet centre concept has been slow to emerge and has focused on the Ontario and Quebec markets. In Ontario, a number of new outlet centres are planned, including the expansion of existing outlet centres (e.g. Cookstown Outlet Mall). Most of the existing new retail development formats in Canada, such as power centres, have been modeled after the US experience. The new outlet centres planned in Canada are expected to follow the US trends and be similar in format to the new open air US centres. The majority of the tenants in the new Canadian outlet centres are also expected to be U.S. based tenants new to the Canadian market. In March 2011, RioCan Real Estate Investment Trust ("RioCan") and Tanger Factory Outlet Centers, Inc. ("Tanger"), through their exclusive joint venture, entered into a purchase and sale agreement to acquire a 35 acre parcel of land to build the first Tanger Outlet Center in the Greater Toronto Area ("GTA"). The site for Tanger s first factory outlet will be Halton Hills, on Highway 401 at the James Snow Parkway interchange. The project is scheduled to start in the fourth quarter of 2011 and be ready for an April 2013 opening. Another Tanger/RioCan outlet is also planned for Kanata and Cookstown (expansion of an existing outlet centre). According to ICSC information, the tenant mix for the Tanger centres will be focused on leading designer and brand name manufacturers. American brands will make up about 80% of the tenants at the centre, and the balance will be Canadian. The concept, design and merchandising of the Tanger s Ontario outlet centres will be similar to those within the Tanger portfolio of outlet centres in the U.S. The centres are expected to include about 350,000 square feet of branded factory outlet retailers from the U.S. and Canada offering consumers a unique opportunity to purchase merchandise directly from leading designer and brand name manufacturers at 81
a substantial savings. It is also the intention of the joint venture to develop as many as 10 to 15 outlet centres in larger urban markets and tourist areas across Canada, over a five to seven year period. Following the RioCan/Tanger announcement, in May 2011, Simon s Property Group and Calloway Real Estate Investment Trust announced the signing of a letter of intent to develop the first Premium Outlet Center in Canada. The centre will also be located in the Town of Halton Hills, Ontario, just 15 minutes outside of Toronto. The Halton Hills site, located at Highway 401 and Trafalgar Road, is just 5 kilometres east of the Tanger site. Construction is expected to begin in the spring of 2012. Other outlet centres planned include a 700,000 square foot centre in Niagara on the Lake to be developed by Ivanhoe Cambridge. 6.4 FOREIGN RETAILERS THE US INVASION The American retail invasion continues. Canada is in the midst of a large wave of U.S. retailers looking to set up shop here, joining recent arrivals such as Crate & Barrel, Marshalls, J. Crew and Victoria Secret. With the recent announcement of Target s arrival in Canada, set to open 135 stores by 2013 through the acquisition of Zellers leases, the trend is expected to accelerate. With their own economy stagnant, several other US retailers are also evaluating opportunities in Canada. Analysts are predicting that a number of U.S. retailers, including Dick s Sporting Goods, Macy s, Nordstrom, Kohl s and JC Penny, are also on their way. For U.S. retailers, Canada is considered the perfect test market and represents a logical next move now that the economic conditions in Canadian are favourable. Canada s mainly English speaking population, its close proximity to existing supply chains, and the fact that consumers already know U.S brands, have lured U.S. interests. Some U.S. retailers are looking for opportunities to enter the Canadian market quickly and easily through acquisition (as has been the case with Target, Walmart) rather than a store by store expansion. Although most U.S. retailers entering Canada have been successful (e.g. Costco, Home Depot), the most notable casualty was Sam s Club, which had a five year run in Canada but could not compete with Costco who ramped up their expansion plans. The arrival of U.S. retailers will result in more choices for Canadian consumers and for shopping centre developers, however, the increased competition could impact some Canadian retailers who no doubt will need to re examine their business strategies to survive and thrive. Canadian retailers are already preparing for the arrival of Target. Canadian Tire is ramping up their marketing campaign with their Bring it On slogan and like other retailers, including Walmart, are investing in new locations and renovating existing stores to establish market position. The impact of Target may not cause a significant geographic shift in expenditures in the urban portions of the GTA because the chain will be rolled out at existing retail locations in most communities. For example, there will be two Target stores opening in Burlington, while at the 82
same time, Target will be opening stores in neighbouring communities, including Oakville and Waterdown. However, in that Target stores are expected to generate multiple times the sales generated by the former Zellers tenants, there will likely be some transfers from other department stores, supermarkets, and specialty retailers. It should also be noted that in addition to the influx of US and other foreign retailers to Canada, there are a number of major Canadian owned stores that also have expansion plans that will increase competition. Examples include: La Maison Simons, a major Quebec based fashion retailer who is planning on opening 12 stores in English Canada in the future, including locations in the Toronto market in the 100,000 square foot +/ range. SAIL, another Quebec based outdoors superstore with stores in the 70,000 square foot range, which recently opened in Burlington. 6.5 BLURRING OF THE RETAIL HIERARCHY The traditional retail hierarchy evolved from Walter Christaller s central place theory in 1930 which relied on the concepts of threshold and range. The result was a system of centres of various sizes that emerged with each centre supplying particular types of goods forming levels of a hierarchy. This hierarchy is evident in Burlington. In municipalities across Canada, however, there is a blurring of the traditional retail hierarchy. The retail hierarchy is being undermined by a number of factors, including changes in consumer wants/needs, and the fact that people are less constrained to shop near their home. The gradual progression of changes in retail formats has also altered the role and function of existing and planned commercial areas and the retail hierarchy. Although distance travelled is still an important factor in a person s decision of where to shop, people will travel further to shop at a centre which fulfils their needs and entertains them. Consumers do not necessarily have an unbridled loyalty to a local centre or specific store where they shop. In today s mobile society, people can and will drive to more distant locations if they perceive that they will benefit from lower prices, better product selection and a great choice of merchandise. This results in a breakdown of the traditional retail hierarchy where people would go to their nearest store. The fact that shopping is also more of a leisure activity and not a necessity also undermines the retail hierarchy. 83
Shopping centres, particularly in the middle ranges of the hierarchy (i.e. community and neighbourhood scale shopping areas) are also finding it increasingly difficult to compete with power centres and big box retailers. A local example is Appleby Mall, a former small scale enclosed centre, which de malled to more effectively compete with its big box competition. 6.6 NON STORE RETAILING With the birth of the Internet in 1993 came E commerce or on line shopping from the comfort of your home. For Canadian consumers, the value of internet shopping comprised $15 billion in 2009, compared to almost $8 billion in 2005. Although E commerce continues to grow, it still represents only a small portion of total retail trade ($415 million in 2009 in Canada). It is expected that as younger, Internet savvy customers mature and Internet usage becomes more widespread over time among consumers of all ages, E commerce will become increasingly relevant. However, it will not replace shopping in all stores people will continue to see shopping in stores as an enjoyable social event. According to a Statistics Canada survey, the most common types of online shopping continue to be travel services; entertainment products such as concert tickets; books and magazines; and clothing, jewellery and accessories. Statistics Canada indicates that the Internet has become a supplement to traditional retail shopping more than a substitute for many Canadians. Many brick and mortar stores also now provide on line shopping. Based on the surveys conducted by urbanmetrics in Burlington, some 22% of telephone survey respondents and 43% of on line survey respondents made internet purchases over the past month. The most popular purchasers were retail items including books, movies, music and other merchandise, whereas tickets and other travel related services accounted for the greatest value of online expenditures. In 2009, Statistics Canada data indicates that 52% of Canadians went online to "window shop," that is, to research or browse products, up from 43% in 2007. Among all window shoppers in 2009, 69% reported subsequently making a purchase directly from a store, up from 64% in 2007. The Internet complements traditional retail for certain categories such as consumer electronics (cameras and DVD players), appliances and furniture, as well as clothing, jewellery and accessories. The window shoppers are typically those that also refrain from buying online due to security and privacy concerns or the inability to touch and feel products. In addition to Internet shopping, home shopping through catalogues continues to expand. There are hundreds of companies, many of which are USA based, which provide catalogues for telephone or on line shopping (e.g. LL Bean, Lands End, Avon, Sears). Canada Post is promoting Borderfree for barrier free and hassle free shopping by partnering with international companies in an effort to simplify shipping procedures. Most of these companies have catalogues. Furthermore, it is likely that increased access to digital television will lead to more purchases being made through interactive systems. 84
While, in general, internet shopping has had a marginal impact on bricks and mortar retailing, it has hit a number of sectors very hard, including: books, video, music, and computer software. This is evidenced by a number of recent major bankruptcies and store closures, including: Blockbuster Video, HMV (in the UK), and Borders bookstores in the US, among others. 6.7 ACTIVE/TRANSIT ORIENTED COMMERCIAL DEVELOPMENT In recent years planning across Ontario has come to recognize the benefits of co ordinating transit and commercial development. Certainly Burlington has policies to ensure that major retail development is accessible by Transit and all of its major shopping destinations are on bus routes. In addition, the Burlington Official Plan also has policies in place to encourage mixed use development around its GO rail stations. In part, in response to Provincial Growth Plan Policies, municipalities have sought to intensify development around transit nodes. Burlington is has also been allocated two Provincially designated Mobility Hubs, which will see the convergence of multiple transit services. Generally speaking retail on its own is not heavily influenced by transit, although it can represent an important element of successful mixed use areas. Vibrant retail destinations help to support high density residential and office development around major transit terminals. One of the most successful transitoriented developments in Canada is Burnaby s Metrotown Centre, which includes three adjacent shopping centres together with offices and residential towers connected to the Vancouver SkyTrain system. This trend has been successful in areas where there has been significant investment by governments in urban transit systems, which in turn, has led to planning policies and incentives to encourage high density developments around transit nodes. The previously strong suburban office market and now strong high density residential market has facilitated transit oriented development at strategic nodes. Historically, transit oriented development has occurred at some, but not all nodes along major transit routes. Planners must recognize the market for high density development is finite and be careful to ensure that policies are consistent with the quantum of demand. Office uses are most influenced by transit, which at the same time, are the most difficult to develop due to limited demand and competition from low cost business park sites. It will be important to reserve the prime sites adjacent to transit stations for the highest density office uses. Retail uses should have access to appropriate amounts of parking to supplement the transit market. Metrotown Centre and Vancouver s SkyTrain 85
In addition, to transit oriented development, more recently jurisdictions across the Province have focused on active transportation alternatives as a means of encouraging healthier communities. This involves the design of complete streets to ensure that planners and engineers design streets for all manner of road users, including pedestrians, cyclists and transit users, in addition to drivers. Key to this strategy is the development of integrated pedestrian and cycling networks. The integration of commercial development as part of an active transportation strategy is still in its infancy. While many municipalities have developed policies which require or encourage street related retailing at strategic locations and require certain businesses to incorporate bike locking racks into their properties, most municipalities have yet to address issues such as the design of bike/trail networks to integrate retail destinations and the creation of policies to encourage safe and friendly cycling/pedestrian access to and within retail developments. 6.8 SUMMARY The retail industry and its built form are dynamic evolving and changing to consumer preferences, lifestyles and new innovations. Based on our research, the retail landscape is expected to continue to evolve with the addition of outlet centres and the integration of power centres, malls and lifestyle centres into hybrid mixed use developments that will be differentiated from each other to some extent through style, architecture and the needs of the community. The principles of new urbanism, sustainability and the focus on public spaces will also continue to influence retail development in the future, while better accommodating changing market conditions. The architecture and design of retail space will no doubt continue to evolve with the creation of more meaningful and memorable spaces that have a feeling of community or sense of place. Although the potential for widespread development of the more traditional lifestyle centres found in the US is unlikely to occur in Canada, there will be more developments which incorporate lifestyle components, including redevelopment of existing shopping centres/power centres, the addition of more design elements, including main street and town centre initiatives, and the combination of mixed uses (i.e. retail, office, residential) recognizing trends for new urbanism and smart growth initiatives. Larger outlet centres, for the value seeking consumer, are also expected to emerge in Canada, including the Toronto area. The shifting age cohorts are expected to fuel future changes in the retail landscape. As the large Baby Boom generation ages, it is expected that opportunities for more niche lifestyle developments will emerge. As indicated by the CSCA, the mass middle ground consumer may start to expect more from Traditional Suburban Model LIVE LIVE SHOP SHOP WORK WORK Smart Growth/Complete Community Model 86
their traditional power centre shopping experience, which is already evident in the increased addition of fashion and restaurant tenants in power centres and hybrid lifestyle centres. The demand for developers to create unique formats and to satisfy the needs of consumers with unique tenants is having a positive impact on the retail landscape. Retailers are introducing additional concepts in order to remain competitive in the marketplace. With a wave of U.S. retailers expected to launch in Canada, the retail landscape will continue to evolve. Whether it is mixed use lifestyle or town centre developments with walkable environments, reintegrating retail space into downtowns (i.e. the evolution from suburban to urban), or redeveloping obsolete projects as more innovative ones emerge, densification and mixed use development is definitely the next wave of retail development that supports the smart growth/complete community model underlying community planning today. The Growth Plan for the Greater Golden Horseshoe embraces the need for mixed use development and strengthening core areas. The Growth Plan aims to, among other things, revitalize downtowns to become vibrant and convenient centres, and to create complete communities that offer more options for living, working, shopping and playing. Given the trends and provincial Growth Plan policies, there is the potential or future opportunity for commercial centres/nodes in Clarington to combine retail with office, residential, and community uses to the benefit of the neighbourhood and community. Neighbourhood retailing, in particular, is considered important for providing everyday goods and services to residents as well as for providing a sense of place and contributing to complete communities. The traditional suburban model created a separation between where people live from where they work and shop. This pattern of growth is seen as resulting in an increased need for automobile travel and contributes to higher energy consumption, declining air quality and public health. As such it will be important that there are appropriate strategies to provide for new multi purpose retail centres and for redeveloping or reinventing existing commercial centres and districts into mixed use nodes with alternative transportation in mind, including creating public gathering places, and integrating housing and employment uses, where appropriate, to create complete communities and achieve a more balanced approach to growth. 87
7 BURLINGTON RESIDENTS RETAIL DESIRES AND PREFERENCES The information presented in Section 5 of this report provided a summary of the results of our online and telephone consumer survey research; specifically as it related to Burlington residents expenditure patterns by location and store type. In addition to questions regarding recent retail expenditures, these surveys also included a series of questions regarding local residents shopping habits and their perceptions of Burlington s existing retail facilities. In particular, these non expenditure questions related to the type and format of retail stores that currently exist in the City, as well as local residents perceptions of current shopping opportunities in Downtown Burlington. The following provides a brief overview of the results of these types of survey questions. 7.1 BURLINGTON RESIDENTS PERCEPTIONS OF BURLINGTON SHOPPING FACILITIES The question How would you describe the following in terms of their availability to you in the City of Burlington was asked to better understand how residents felt about the different types of retail within the City, as well as the availability of specific store formats. Respondents were asked to rank each of a number of pre identified store types/formats on a scale of 1 to 3 ( 1 being need more and 3 being too many ). The results of these questions are summarized in Figures 7 1 and 7 2. Overall, the results indicate that the majority of residents generally felt that there was just the right amount of retail facilities in each of the identified store types and formats. It is interesting to note, however, that upwards of 28% and 21% of respondents felt that there was too many Fast Food Restaurants and Big Box retail in the City, respectively. Similarly, approximately 33%, 23% and 22% of respondents indicated that the City would benefit from more Pedestrian Retail Areas, Retail Accessible by Transit and Convenience/Neighbourhood Scale Retailers, respectively. FIGURE 7 1: AVAILABILITY OF EXISTING RETAIL FACILITIES BY STORE FORMAT, CITY OF BURLINGTON Need More Just Right Too Many No Response Large Format ( Big Box ) Stores 6.9% 70.4% 21.3% 1.4% Enclosed Shopping Malls 14.9% 81.0% 3.4% 0.8% Convenience/Neighbourhood Scale Retailers 21.6% 70.2% 5.8% 2.4% Pedestrian Retail Areas (boutique or "main street" shopping) 33.0% 59.8% 4.3% 2.9% Retail Accessible by Transit 23.2% 68.6% 1.6% 6.6% SOURCE: urbanmetrics. 88
FIGURE 7 2: AVAILABILITY OF EXISTING RETAIL FACILITIES BY STORE TYPE, CITY OF BURLINGTON Need More Just Right Too Many No Response Department Stores 9.3% 81.4% 8.6% 0.6% Specialty Clothing Stores 18.1% 70.4% 9.4% 2.1% Home Furnishings Stores 12.2% 78.4% 7.5% 1.9% Full Service Restaur 15.2% 74.9% 7.8% 2.1% Fast Food Restaurants 3.7% 66.2% 28.5% 1.6% Supermarkets 13.6% 80.2% 5.4% 0.8% Specialty Food Stores 30.2% 65.3% 1.6% 2.9% SOURCE: urbanmetrics. 7.2 BURLINGTON RESIDENTS PERCEPTIONS OF DOWNTOWN BURLINGTON Residents of Burlington who completed the online/telephone consumer surveys were also asked a series of questions that related specifically to their use and perception of various aspects of the City s commercial core. For example, as summarized in Figures 7 3 and 7 4, respondents were asked to indicate the frequency at which they visit Downtown Burlington to shop and their typical method of travel when doing so. As shown, the majority of Burlington residents visit Downtown Burlington less than once a week. In fact, approximately half of survey respondents indicated that they visited Downtown Burlington to shop less than once a month, if ever. The survey results also suggest a similar visitation pattern during the evening, however it is important to note that a large portion of respondents (19.7%) did not provide a response for this question. FIGURE 7 3: FREQUENCY OF VISITS TO DOWNTOWN BURLINGTON, DAY & EVENING Frequency of Visit Reason/Time of Visit Shopping (Day) Evening Once a week 12.0% 8.8% More than once a week 14.6% 8.5% 1 3 times per month 22.7% 18.7% Less than once a month 31.0% 32.6% Never 18.6% 11.7% No Response 1.1% 19.7% SOURCE: urbanmetrics. 89
FIGURE 7 4: METHOD OF TRAVEL TO DOWNTOWN BURLINGTON Car / Motorcycle 77.3% Walk 13.0% Public Transit Bicycle Taxi Other No Response 4.3% 1.3% 0.5% 1.6% 2.1% SOURCE: urbanmetrics. 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Of those individuals that did visit Downtown Burlington, the overwhelming majority travelled there by automobile. As summarized in Figure 7 4, for example, more than three quarters of respondents (77.3%) travelled by car, while a total of only 18.6% indicated that they typically walked, took public transit or cycled when visiting the area. Similarly, when asked about their satisfaction with various aspects of parking in Downtown Burlington, the majority of Burlington residents agreed that parking was adequate, convenient and reasonably priced. It is important to note, however, that a large portion (between 35.7% and 48.3%) did not share this opinion and were generally dissatisfied with parking in the area. Figure 7 5 illustrates the distribution of respondents that indicated either yes or no in regards to their satisfaction with parking in Downtown Burlington in terms of its adequacy, convenience and affordability. 90
FIGURE 7 5: SATISFACTION WITH DOWNTOWN PARKING (ADEQUACY, CONVIENCE & AFFORDABILITY) 100% 90% 80% 70% 48.3% 43.4% 35.7% 60% 50% 40% No Response No Yes 30% 20% 49.4% 54.1% 60.5% 10% 0% SOURCE: urbanmetrics. Adequate Convenient Reasonably Priced In terms of survey respondents perception of actual retail and service commercial facilities located in Downtown Burlington, Figure 7 6 provides a summary of the results of a similar question to those described earlier in Section 7.1 of this report. Specifically, the question How would you describe the following in terms of their availability to you in Downtown Burlington was asked to better understand how residents felt about the various types of retail and service facilities that already exist in this area. Similar to residents feelings about the availability of store types City wide, respondents generally indicated that there was just the right amount of each store type. Interestingly, however, approximately one third of respondents indicated that they felt the downtown needed more food store options. For example, approximately 30% and 34% of residents surveyed suggested that more Supermarkets and Specialty Food Stores were needed, respectively. Finally, respondents were also asked about how important it was that Downtown Burlington performs a variety of different functions within the context of the City and beyond (based on a scale from 1 10, where 10 was very important). As illustrated in Figure 7 7, survey respondents felt that it was very important that the downtown serve as a place for various cultural, social and recreational activities, whereas its role as a neighbourhood and regional shopping destination was generally seen as secondary. 91
FIGURE 7 6: AVAILABILITY OF EXISTING RETAIL FACILITIES BY STORE TYPE, DOWNTOWN BURLINGTON Need More Just Right Too Many No Response Department Stores 17.1% 72.8% 4.8% 5.3% Specialty Clothing Stores 20.5% 67.8% 6.2% 5.4% Home Furnishings Stores 14.4% 75.2% 4.0% 6.4% Full Service Restaur 17.1% 73.4% 5.6% 3.8% Fast Food Restaurants 8.5% 73.0% 13.8% 4.8% Supermarkets 29.6% 63.5% 1.9% 5.0% Specialty Food Stores 34.4% 57.8% 1.8% 6.1% SOURCE: urbanmetrics. FIGURE 7 7: IMPORTANCE OF VARIOUS DOWNTOWN FUNCTIONS TO BURLINGTON RESIDENTS (OUT OF 10) A place for the City's Festivals 8.27 A place to take out of town visitors The cultural centre for the City A place to enjoy recreation and leisure activities A place for people to live A place to meet friends A place for people to work and learn 7.75 7.61 7.39 7.16 7.15 6.93 A neighbourhood destination to buy daily/weekly retail items A major shopping destination for people across the region 5.64 6.01 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 SOURCE: urbanmetrics. 92
Overall, the results of the online/telephone consumer surveys that relate to Downtown Burlington represent only a slight departure from the results of similar questions that were asked during the on street intercept surveys undertaken with existing patrons of Downtown Burlington. For example, although visitation levels and satisfaction with various aspects of parking were generally lower among residents from across the City, there were strong similarities in the feedback obtained from both samples with regards to their satisfaction with the type of retail facilities available in downtown and the various roles that they felt it should serve. In particular, it is interesting to note that respondents from both the online/telephone surveys and on street intercept surveys identified food store retailing as something that the downtown needed more of. Similarly, respondents from both surveys shared the opinion that Downtown Burlington serves as an important cultural, social and entertainment centre, whereas its role as a neighbourhood and regional shopping destination was of secondary importance. The detailed results of the on street intercept surveys as well as various other research and analyses relating to the downtown have been summarized in a separate report prepared by urbanmetrics as part of the City s broader Official Plan Review Commercial Strategy Study. The following section of this report provides a summary of the key findings and conclusions from this earlier Interim Commercial Strategy Discussion Paper on Downtown Burlington. 93
8 ROLE OF DOWNTOWN BURLINGTON Prior to the completion of this commercial market study, urbanmetrics prepared an Interim Commercial Strategy Discussion Paper, which summarized the results of various preliminary research that related specifically to Downtown Burlington. The research and analysis presented in this discussion paper represented a separate component of the City of Burlington s broader Official Plan Review Commercial Strategy Study, which was specifically intended to inform the City s Downtown Task Group as to the current state of Downtown Burlington; the various functions it serves; and how well it is currently meeting the needs of City residents, among other things. The Interim Commercial Strategy Discussion Paper provided a detailed summary of our research findings on the downtown, including the results of a detailed commercial inventory of retail/service commercial space; a review of relevant office commercial space; identification of potential future development sites; an analysis of forecast population and employment growth; as well as the results of on street intercept surveys conducted with patrons of the downtown, plus a public workshop held with some 130 local residents, business owners and stakeholders on November 7, 2012 at the Burlington Arts Centre. For the purposes of this project, Downtown Burlington has been defined as the area centered on Brant Street, generally extending from Lake Ontario in the south to Fairview Street in the north; between the Queen Elizabeth Way (QEW) and Smith Avenue in the west and east, respectively. Figure 8 2 provides an illustration of the geographic extent of the downtown area. Based on the information presented in the Interim Commercial Strategy Discussion Paper, the following provides a brief overview of our key research findings and conclusions relating to the current role and state of Downtown Burlington, which serves as an integral component of the current commercial system in Burlington: Based on the results of a detailed inventory of the retail and service commercial space located in Downtown Burlington in October 2012, the City s core currently contains over one million square feet of retail/service commercial space. Based on the inventory information presented in Section 3 of this report, this represents approximately one tenth of the total commercial space located in the entire City of Burlington. More than two thirds (69.3%) of the commercial space in Downtown Burlington is currently tenanted by service based commercial facilities, such as Banks, Food Services & Drinking Places, Personal Care Services and Health Care service facilities. Of the remaining retail commercial space located in the downtown, the majority is comprised by Clothing & Accessories and Furniture, Home Furnishings & Electronics stores, as is typical of most comparable downtown shopping districts. 94
The current commercial vacancy rate in Downtown Burlington is 11.2%. Although this is a relatively high rate with typical or normal rates ranging between 5.0% and 8.0% it is important to note that most of the included vacant space is concentrated in a number of aging commercial plazas, some of which are slated for redevelopment (e.g., Village Square, Tudor Square and Burlington Square Plaza). Overall, Downtown Burlington has very healthy vacancy rates in prime areas. Downtown Burlington currently contains a wide range of land uses and serves a variety of different functions; both locally and within the context of the City as a whole. For example, in addition to serving as a key neighbourhood and tourist shopping destination, the downtown serves as an important place for Working & Learning, Living, Playing, Community Activities and Transportation. In fact, based on the results of on street intercept surveys undertaken with patrons of the Downtown, the majority of respondents indicated that they visited the core for reasons other than to shop. Figure 8 1 provides a summary of the top reasons for visiting among survey respondents. Burlington s Urban Growth Centre which generally corresponds to the Downtown Burlington area identified in Figure 8 2 contained a total of some 8,400 residents in 2006. This area also supported a total of some 5,600 employees at this time. Based on the intensification targets set out in the Province s Growth Plan, the downtown is expected to experience population and employment growth of approximately 9,400 by 2031. As summarized in Section 4.1 of this report, the majority of patrons of Downtown Burlington originate from within the City of Burlington; and particularly from within a relatively short distance of the core. Based on the results of the on street intercept surveys, for example, approximately 69% of respondents currently reside in the southern portion of Burlington (i.e., south of the Queen Elizabeth Way and Highway 403). Based on the feedback obtained from local residents, employees, and other visitors to the downtown during the public consultation event, as well as the results of the on street intercept surveys, it is evident that there is demand for additional neighbourhood FIGURE 8 1: REASONS FOR VISITING DOWNTOWN BURLINGTON, ON STREET INTERCEPT SURVEYS Dining 26 9% All Other 72 25% Appointment 36 12% Shopping 38 13% Live Downtown 75 26% Work Downtown 45 15% SOURCE: urbanmetrics inc., based on the results of on street intercept surveys with patrons of Downtown Burlington. 95
serving retail and service facilities in Downtown Burlington. In particular, an overwhelming number of survey respondents and workshop participants indicated that they would like to see more food store retailers in the downtown, including specialty food stores (e.g., butchers, fish markets, bakeries, gourmet food shops, fresh produce/fruit stores, organic/health food stores and options for vegans/vegetarians/gluten free shoppers); a second supermarket/grocery store; and a regular farmer s market. Similarly, other neighbourhood oriented retail establishments that were desired among respondents and participants included a local hardware store and new pharmacies/drug stores. Overall, the results of our research indicate that Downtown Burlington is currently operating as a multi functional core with strength in a number of different areas. All of these strengths including the scale of the commercial core; low vacancy rates in prime areas; recent residential development activity and interest; public sector investment in the downtown and waterfront; and the continued focus on civic events all support the area s vibrancy. 96
FIGURE 8 2: MAP OF DOWNTOWN BURLINGTON SOURCE: urbanmetrics inc. 97
8.1 DOWNTOWN TRADE AREA The following provides an overview of the geographic distribution of patrons of Downtown Burlington, based on postal code information obtained directly from respondents who participated in the on street intercept surveys 14. As summarized in Figure 8 3, approximately 80% of the respondents surveyed originated from within the City of Burlington. In fact, the majority of the individuals surveyed (69%) currently reside in the southern portion of Burlington (i.e., south of the Queen Elizabeth Way (QEW) and Highway 403). FIGURE 8 3: DISTRIBUTION OF DOWNTOWN BURLINGTON VISITORS Location/Community Number of Survey Respondents % of Total City of Burlington (South of QEW/403) 201 68.8% City of Burlington (North of QEW 403) 31 10.6% TOTAL CITY OF BURLINGTON 232 79.5% Town of Oakville 9 3.1% City of Hamilton 31 10.6% All Other Locations 20 6.8% TOTAL OTHER LOCATIONS 60 20.5% TOTAL ALL RESPONDENTS 292 100.0% 14 This type of survey my slightly overestimate the walk in population as it may not capture persons who drive directly to a point of origin downtown and do not take typical pedestrian routes where the surveys were conducted. 98
As a reference, in 2002 a similar survey of downtown shoppers indicated that 70% lived in downtown Burlington, suggesting a slight contraction of the trade area. An additional 14% of respondents originated from other nearby communities, including 11% and 3% from various parts of Hamilton and Oakville, respectively Figure 8 4 illustrates the geographic distribution of patrons of Downtown Burlington, based on the results of the on street intercept surveys. This figure has been overlaid with the downtown Trade Area as delineated by urbanmetrics based on the surveys and commercial inventory. While the majority of Downtown Burlington patrons originate from within a relatively short distance of the core, it is also important to note that the downtown attracts individuals from across the City; from neighbouring communities such as Hamilton and Oakville, and from as far away as communities like Guelph and Mississauga. As illustrated by Figure 8 4, the Primary Trade Area for the downtown, which would represent the source of the most customers on consistent and ongoing basis, has been defined as the area east of King Road, south of 403/QEW, west of Walkers Line and north of the lake. The Secondary Trade Area has been defined as the balance of the City of Burlington. As noted previously, the City or the entire Trade Area represents some 80% of customer origins, while the Primary Trade Area represents some 63% of downtown visitors with a population of 46,000. Based on Halton Region s Best Planning estimates, this is expected to reach 53,000 by 2031, largely through infill and intensification. The largest share of this growth would occur within the Urban Growth Centre. 99
FIGURE 8 4: DOWNTOWN BURLINGTON TRADE AREA 100
9 FUTURE WARRANTED SPACE ANALYSIS In this section, we have evaluated the market opportunity for Food Store Retail (FSR), Non Food Store Retail (NFSR) and selected other retail and service space in the City of Burlington. Our estimates of warranted space for FSR and NFSR have been based on a residual analysis approach. This approach is considered appropriate for long term land use planning as it does not encroach on the sales of existing stores in Burlington to support additional space. The following summarizes the methodology used to calculate the warranted FSR and NFSR space in the City: The existing expenditures made by Burlington residents in the City of Burlington Share were estimated based on the results of our online and telephone consumer surveys. The future Burlington market shares were forecasted over the study period (2012 to 2031) based on an estimate of the opportunity for recapture of expenditures currently leaving the community and our knowledge of existing commercial development applications. By applying the Burlington market shares to the available expenditure potential determined in Section 4.5 of this report, the Burlington expenditure potential from Burlington residents was calculated. The residual potential available or the net additional expenditure growth over the study period was calculated. Inflow sales from non Trade Area residents were added to the residual potential to calculate the total additional sales volume available to new Burlington retail facilities. Inflow has been estimated based on our assumption of how much of the existing and proposed commercial space is and will be supported by non Trade Area residents. The warranted FSR and NFSR space has been calculated based on expected sales performance levels applied to the total sales volume available. The following sections summarize the results of our warranted space analyses, which can be considered as a general guideline in determining future space needs in the City of Burlington. 101
9.1 FOOD STORE RETAIL EXPENDITURE ANALYSIS Food store retail includes supermarkets, grocery stores, convenience stores and specialty food stores. Based on our expenditure calculations for Trade Area residents, which were detailed in Section 4 of this report, we have estimated the future FSR space warranted in the City of Burlington. This has included estimating the City of Burlington market shares, determining the residual or additional expenditure potential available in the market from Trade Area residents, evaluating the existing sales performance levels of foods stores in Burlington, and estimating inflow sales. The following summarizes the results of our analysis. 9.1.1 CITY OF BURLINGTON SHARE The Burlington share refers to the food store retail expenditures of Burlington residents made in the City of Burlington. Based on the results from the online/telephone survey, approximately 93.4% of Primary Zone residents food store expenditures are currently made at retail facilities located in the City of Burlington. These shares are representative of the localized or convenience nature of food store expenditures, and are comparable to the supermarket and specialty food store shares applied in the City s previous Retail Commercial Study prepared by Robin Dee & Associates (2003). Recognizing the convenience nature of food expenditures, for the purposes of our analysis, the Burlington shares have been held constant over the study period. 9.1.2 RESIDUAL EXPENDITURE POTENTIAL FROM BURLINGTON RESIDENTS As indicated in Figure 9 1, based on the Burlington shares applied to the total food store expenditures for Primary Zone residents, the current share of Burlington residents food store expenditures has been estimated at $390.1 million in 2012. With future market growth, this share is forecast to increase to $436.6 million by 2031; an increase of $46.5 million. This increase is referred to as the residual potential, which represents the additional market potential available from Burlington residents to both existing and potential new food stores in the City of Burlington. This residual potential is generally derived from population increases, real growth in expenditures, and potential recapture opportunities. 9.1.3 MARKET OPPORTUNITY FOR FSR SPACE Based on the residual potential, inflow and average sales performance levels, we have estimated the total additional food store space that could be supported in Burlington at various times throughout the study period. Based on our licence plate surveys, which were summarized in Section 4 of this report, we have estimated inflow from outside the City of Burlington for the FSR category at 20% for existing and future food store space in Burlington. Within the City, there is currently 997,503 square feet of FSR space. Based on inflow sales of 20%, the average sales per square foot for food stores is $489. 102
Based on the residual expenditures available from Burlington residents, as well as additional inflow sales from outside the City, some 17,200 square feet of new FSR space is warranted in the City by 2016. This would ultimately increase to 116,300 at the same sales levels, or approximately 101,100 at a higher $575 per square foot sales level (expressed in 2012 dollar terms). This warranted space excludes any sales transfer opportunities from existing stores in Burlington. Based on these assumptions, the City can accommodate between 116,300 and 101,100 square feet of new FSR space by 2031. FIGURE 9 1: FOOD STORE RETAIL (FSR) ANALYSIS 2012 Dollars 2012 2016 2021 2026 2031 Primary Zone (Burlington) FSR Expenditures ($Millions) $ 417.7 $ 425.1 $ 438.4 $ 451.9 $ 467.5 Estimated Burlington Share (%) 1 93.4% 93.4% 93.4% 93.4% 93.4% Estimated Burlington Share ($ Millions) $ 390.1 $ 397.0 $ 409.5 $ 422.1 $ 436.6 Residual Potential $ 6.9 $ 19.4 $ 32.0 $ 46.5 TOTAL TRADE AREA Existing FSR (997,503 sq.ft.) Sales/Sq.Ft. Levels (Including average Inflow of 20%): $ 489 WARRANTED ADDITIONAL SPACE Burlington (including inflow, excluding sales transfers) Additional Residual Potential Available $ 6.9 $ 19.4 $ 32.0 $ 46.5 Plus Inflow Sales @ 20.0% 2 $ 1.7 $ 4.8 $ 8.0 $ 11.6 TOTAL ADDITIONAL SALES POTENTIAL AVAILABLE $ 8.6 $ 24.3 $ 40.0 $ 58.1 WARRANTED ADDITIONAL SQUARE FEET @ $500 per sq. ft. 17,200 48,500 80,000 116,300 @ $525 per sq. ft. 16,400 46,200 76,200 110,700 @ $550 per sq. ft. 15,700 44,100 72,700 105,700 @ $575 per sq. ft. 15,000 42,200 69,600 101,100 SOURCE: urbanmetrics inc. 1 urbanmetrics inc. estimate, based on the results of online/telephone consumer survey. 2 urbanmetrics estimate, based on the results of licence plate survey and professional experience. 9.2 NON FOOD STORE RETAIL EXPENDITURE ANALYSIS This section examines the market opportunity for additional Non Food Store Retail (NFSR) space in the City of Burlington. This includes a range of stores selling department store type merchandise (e.g., General Merchandise stores; Apparel & Accessories stores; Furniture, Home Furnishings & Electronics stores; Health & Personal Care stores; Building & Outdoor Supply stores; and Automotive Parts & Accessories 103
stores). The following provides an overview of our detailed NFSR analysis, which follows a similar methodology to that applied for the FSR category, as outlined in the previous section. 9.2.1 CITY OF BURLINGTON AND SECONDARY TRADE AREA SHARES Based on the results of the online/telephone consumer survey, and as indicated in Figure 9 2, we have estimated that approximately 85.1% of City of Burlington residents NFSR expenditures are currently made in the City of Burlington. In the Secondary Trade Areas (i.e., Secondary Zone East and Secondary Zone West), the City of Burlington shares have been estimated at 17.7% and 9.2% in the base year of 2012, respectively. Shares for the two secondary zones have been estimated based on the results of the licence plate surveys, as well as the existing sales support derived from Burlington residents and estimated inflow sales levels. Given that Burlington retail facilities are already capturing a large share of Burlington residents NFSR expenditures (85.1%), these shares have been held constant throughout the balance of the study period to 2031. By contrast, capture rates for the two secondary zones have been decreased slightly over the study period to reflect the potential introduction of new retail developments in neighbouring municipalities. In particular, we note that the existing Walmart store at Eastgate Square in Hamilton is relocating to a new SmartCentres development on Centennial Parkway near the foot of the Burlington Skyway bridge. Similarly, Eastgate Mall is currently in the process of remerchandising this former Walmart space with a mix of new retailers, including Winners and Sport Check. These and other anticipated new retail opportunities in closer proximity to Secondary Zone East and Secondary Zone West residents will likely temper the ability of new and existing retail facilities Burlington to capture additional sales opportunities from these areas. Based on our estimates of current and future Burlington shares, the Burlington share of total NFSR expenditures has been estimated at $1,166.6 million in 2012, representing an average of 40.7% of the total NFSR expenditure potential of Trade Area residents overall. This share is forecast to increase to $1,571.9 million by 2031. 9.2.2 RESIDUAL EXPENDITURE POTENTIAL FROM TRADE AREA RESIDENTS As indicated in Figure 9 2, the residual potential available from Burlington and Secondary Zone residents for existing and new NFSR space in Burlington has been estimated at $74.7 million by 2016, increasing to $405.3 million by 2031 (expressed in 2012 dollars and excluding inflow). 104
FIGURE 9 2: NON FOOD STORE RETAIL (FSR) ANALYSIS 2012 Dollars 2012 2016 2021 2026 2031 Primary Zone (Burlington) Non Food Store Retail (NFSR) ($Millions) $ 1,116.0 $ 1,192.1 $ 1,300.6 $ 1,411.6 $ 1,532.7 Estimated Burlington Share (%) 1 85.1% 85.1% 85.1% 85.1% 85.1% Estimated Burlington Share ($ Millions) $ 949.7 $ 1,014.5 $ 1,106.8 $ 1,201.3 $ 1,304.3 Residual Potential $ 64.8 $ 157.1 $ 251.6 $ 354.6 Secondary Zone East Non Food Store Retail (NFSR) ($Millions) $ 658.6 $ 726.7 $ 816.8 $ 890.1 $ 974.9 Estimated Burlington Share (%) 1 17.7% 17.1% 16.4% 15.7% 15.0% Estimated Burlington Share ($ Millions) $ 116.5 $ 124.5 $ 134.1 $ 139.8 $ 146.2 Residual Potential $ 8.0 $ 17.6 $ 23.3 $ 29.7 Secondary Zone West Non Food Store Retail (NFSR) ($Millions) $ 1,089.7 $ 1,141.9 $ 1,269.5 $ 1,350.1 $ 1,517.2 Estimated Burlington Share (%) 1 9.2% 9.0% 8.6% 8.3% 8.0% Estimated Burlington Share ($ Millions) $ 100.4 $ 102.3 $ 109.7 $ 112.3 $ 121.4 Residual Potential $ 1.9 $ 9.3 $ 11.9 $ 21.0 TOTAL TRADE AREA Total Non Food Store Retail (NFSR) Expenditures ($Millions) $ 2,864.3 $ 3,060.7 $ 3,386.9 $ 3,651.8 $ 4,024.8 Total Estimated Burlington Share ($Millions) $ 1,166.6 $ 1,241.3 $ 1,350.6 $ 1,453.4 $ 1,571.9 Estimated Burlngton Share (%) 40.7% 40.6% 39.9% 39.8% 39.1% Existing Sales from Trade Area Residents ($Millions) $ 1,166.6 $ 1,166.6 $ 1,166.6 $ 1,166.6 $ 1,166.6 Residual Potential ($Millions) $ 74.7 $ 184.0 $ 286.8 $ 405.3 Existing NFSR (4,801,961 sq.ft.) Sales/Sq.Ft. Levels (Including average Inflow of 15%): $ 286 WARRANTED ADDITIONAL Non Food Store Retail (NFSR) SPACE Burlington (including inflow, excluding sales transfers) Additional Residual Potential Available $ 74.7 $ 184.0 $ 286.8 $ 405.3 Plus Inflow Sales @ 15.0% 2 $ 13.2 $ 32.5 $ 50.6 $ 71.5 TOTAL ADDITIONAL SALES POTENTIAL AVAILABLE $ 87.9 $ 216.5 $ 337.4 $ 476.8 WARRANTED ADDITIONAL SQUARE FEET (3 @ $325 per sq. ft. 270,400 666,100 1,038,200 1,467,100 @ $350 per sq. ft. 251,100 618,500 964,000 1,362,400 @ $375 per sq. ft. 234,400 577,300 899,800 1,271,500 @ $400 per sq. ft. 219,700 541,200 843,500 1,192,100 SOURCE: urbanmetrics inc. 1 urbanmetrics inc. estimate, based on the results of online/telephone consumer survey. 2 urbanmetrics estimate, based on the results of licence plate survey and professional experience. 105
9.2.3 MARKET OPPORTUNITY FOR NFSR SPACE Based on the residual sales available from Trade Area residents as well as inflow sales estimated at 15%, we have determined the market opportunity for additional NFSR space in Burlington. There is currently some 4,801,961 square feet of NFSR space in Burlington, achieving an average sales performance level of $286 per square foot (assuming inflow sales of 15% from outside the Trade Area). It is important to recognize, however, that sales performance levels can vary significantly by store type. For example, smaller stores that sell relatively expensive merchandise (e.g., jewellery stores, electronics stores) tend to yield substantially higher sales per square foot performance levels than much larger stores that offer a wider range of goods and services, including department stores, sporting goods stores and home improvement centres. Based on our analysis, the total amount of warranted additional NFSR space in Burlington by 2031 has been estimated at between 1.47 million square feet (at an average of $325 per square foot) and 1.19 million square feet (at an average of $400 per square foot). 9.3 OTHER SELECTED RETAIL AND SERVICE SPACE POTENTIAL The following section examines the future demand for other selected retail and service space in the City of Burlington based on a per capita space ratio analysis. The commercial categories analyzed in this manner generally do not lend themselves to an expenditure analysis similar to those undertaken for the FSR and NFSR categories. Moreover, in some cases data is not available or reliable for these categories. It should be recognized, however, that this approach imposes a generic or typical set of market demand conditions on the current and future population of Burlington. These conditions are based on existing service levels in the City and observations made in a variety of other market areas. As such, they cannot directly reflect special circumstances or unique characteristics of the Burlington population, such as income levels and regional or local shopping preferences. For the purpose of our analysis, we have assumed that outflow would equate to inflow. The following types of retail and service facilities are included in our analysis: Liquor, Beer & Wine Stores; Banks/Credit Unions; Health Care; Cultural, Entertainment & Recreation; Food Services & Drinking Places; Consumer Goods Rental; Personal & Household Goods Repair & Maintenance; 106
Personal Care; Selected Civic & Social Organizations; Social Services; and Other Services. Based on the results of our commercial inventory of the City of Burlington, which have been summarized in detail in Section 3 of this report, there is currently some 4,265,148 square feet of selected retail and service space located in Burlington. Based on current population estimates for the City, this represents a total of 23.29 square feet per capita in 2012. Given that this is slightly higher than the amount of space that is typically observed in comparable communities across the Province on a per capita basis, this suggests that there is a potential over supply of existing service space in Burlington. In estimating the total amount of space that will be required to serve future residents of the City, therefore, we have applied somewhat lower target per capita space ratios to the forecast population, based on residual growth. It is important to remember that our forecasts cannot fully capture how the emergence of new retail trends or store formats will alter future per capita space ratios. Therefore, flexibility and a realistic interpretation of these findings are required for the application of this approach. Based on our analysis, which has been summarized in Figure 9 3, an additional 253,260 square feet of selected retail and service space will be required in Burlington by 2031. In combination with the existing selected retail and service space located in Burlington, this results in a total of 4,518,408 square feet by 2031. 107
FIGURE 9 3: WARRANTED ADDITIONAL RETAIL AND SERVICE SPACE IN BURLINGTON (2012 2031) 2012 2016 2021 2026 2031 POPULATION 1 183,100 184,500 188,000 191,400 195,700 Cumulative Growth 1,400 4,900 8,300 12,600 RETAIL/SERVICE CATEGORY Target Space Warranted Warranted Warranted Warranted Existing Space Space Per Capita Per Capita Additional Space Additional Space Additional Space Additional Space (sq ft) (sq ft/capita) (sq ft/capita) (sq ft) (sq ft) (sq ft) (sq ft) TOTAL SPACE 2031 (sq ft) 2 Liquor, Beer & Wine Stores 100,740 0.55 0.55 770 2,695 4,565 6,930 107,670 SUBTOTAL Selected Retail 100,740 0.55 0.55 770 2,695 4,565 6,930 107,670 Banks/Credit Unions 242,880 1.33 1.30 1,820 6,370 10,790 16,380 259,260 Health Care 621,863 3.40 2.00 2,800 9,800 16,600 25,200 647,063 Cultural, Entertainment & Recreation 629,101 3.44 3.00 4,200 14,700 24,900 37,800 666,901 Food Services & Drinking Places 914,095 4.99 4.50 6,300 22,050 37,350 56,700 970,795 Consumer Goods Rental 34,449 0.19 0.20 280 980 1,660 2,520 36,969 Personal & Household Goods Repair & Maintenance 249,317 1.36 1.30 1,820 6,370 10,790 16,380 265,697 Personal Care 328,622 1.79 1.80 2,520 8,820 14,940 22,680 351,302 Selected Civic & Social Organizations 132,925 0.73 0.70 980 3,430 5,810 8,820 141,745 Social Services 50,219 0.27 0.25 350 1,225 2,075 3,150 53,369 Other Services 960,937 5.25 4.50 6,300 22,050 37,350 56,700 1,017,637 SUBTOTAL Selected Services 4,164,408 22.74 19.55 27,370 95,795 162,265 246,330 4,410,738 GRAND TOTAL Selected Retail and Service Categories 4,265,148 23.29 20.10 28,140 98,490 166,830 253,260 4,518,408 SOURCE: urbanmetrics inc. 1 Based on population estimates summarized in Section 4.3 of this report. 2 Represents sum of existing space in 2012 and the amount of additional space that is warranted by 2031, based on residual population growth and target per capita space ratios. 9.4 SUMMARY OF ADDITIONAL WARRANTED COMMERCIAL SPACE A summary of the amount of warranted additional retail space in Burlington by major store type over the 2012 to 2031 period is presented in Figure 9 4. For the FSR and NFSR categories, we have used increasing sales per square foot performance levels (from $500 to $575 per square foot for FSR and from $325 to $400 per square foot for NFSR) to estimate demand for future space. This is considered appropriate because competition in the retail sector has historically pushed upward the level of store productivity. 108
By 2031, a total of approximately 11.6 million square feet of retail and selected service space would be warranted in Burlington to serve the existing and future population of more than 195,000 residents. It should be noted, however, that not all service categories were considered in this model. Our analysis of warranted space is considered a guideline only, and must be evaluated in the context of the assumptions utilized, including anticipated population growth, inflow sales levels, and average sales per square foot performance levels. FIGURE 9 4: SUMMARY OF FUTURE WARRANTED SPACE IN BURLINGTON (2012 2031) Retail/Service Category Existing Space (2012) Cumulative Additional Space 2016 2021 2026 2031 Total Space (2031) Non Food Store Retail (NFSR) 4,801,961 270,400 618,500 899,800 1,192,100 5,994,061 Food Store Retail (FSR) 997,503 17,200 46,200 72,700 101,100 1,098,603 Selected Services 4,164,408 27,400 95,800 162,300 246,300 4,410,708 Liquor, Beer & Wine Stores 100,740 800 2,700 4,600 6,900 107,640 TOTAL SPACE 10,064,612 315,800 763,200 1,139,400 1,546,400 11,611,012 SOURCE: urbanmetrics inc. 109
10 DOWNTOWN MARKET ANALYSIS In this section, we have identified the additional space that would be warranted in the downtown (as defined in Figure 8 2). The majority of future population growth in the City will be accommodated through intensification, with the downtown accommodating the largest share of this growth. 10.1 DOWNTOWN PRIMARY TRADE AREA POPULATION GROWTH As discussed in Section 8, Downtown Burlington serves the entire City, with a commercial Primary Zone bounded by King Road, Highway 403/QEW, Walkers Line and Lake Ontario. Based on the Downtown intercept survey, approximately 63% of visitors to the downtown originate from this area. This area also accounts for 81.5% of downtown Grocery and Food sales; 39% of retail sales; and 64% of restaurant and fast food sales, based on the downtown intercept survey. As per the Census, the population of the Primary Zone in 2011 is estimated at 46,000. Based on the January 31, 2008 Burlington Intensification Study, approximately 52% of future residential units to 2031 would be in the form of intensification within: the Urban Growth Centre; within the Urban Growth Corridor along Fairview Street and Plains Road; on the two Regional Mall sites; as well as, by way of low density infill and accessory units. The Primary Zone of the Downtown Trade Area, which includes the Urban Growth Centre; large portions of the Urban Growth Corridor; and the two Regional Malls, will be the recipient of a large share of future intensification growth. Based on Halton Region s Best Planning Estimates projections, the 2031 population for the Primary Zone is estimated at 53,000 representing a growth of some 7,000 persons. A large share of this growth could occur in the Urban Growth Centre 15 15 The 2008 Intensification report, based on a site by site review estimates that some 2,200 units with a population of 3,750 could be developed in the Urban Growth Centre (UGC). This figure may be low in relation to the Provincial Growth Plan target. As per the Growth Plan, between 2012 and 2031, the Urban Growth Centre itself is targeted to increase from a total of 14,000 residents and jobs in 2006 to 23,400 persons and jobs by 2031, based on a density target of 200 persons and jobs per hectare in 2031. This represents growth of some 9,400 persons and jobs over this period. Based on Census population data, it is estimated that the Urban Growth Centre population in 2006 was 7,600 persons and the workforce is approximately 7,400. This represents a population/employment ratio of 54%/46%. Future growth will likely be more heavily oriented to residential development. This is because the current ratio is heavily influenced by a number of large scale employers, including Joseph Brant Hospital and Burlington Civic Offices, which have limited growth potential. If 75% of UGC growth will be comprised of new residents, this would result in an increase of approximately 7,000 new residents or a growth of 88% between 2006 and 2031. Based on Census data, between 2006 and 2011, the UGC population grew by some 800 persons. This would result in a future growth between 2011 and 2031 of approximately 6,200 persons in the Urban Growth Centre alone. 110
10.2 PROJECTED FUTURE WARRANTED SPACE IN THE DOWNTOWN On Figures 10 1 to 10 3, the future non food store retail, food store retail and services space needs for the Downtown have been projected to 2031. 10.2.1 NON FOOD STORE RETAIL ANALYSIS Figure 10 1 provides our analysis of non food store retail requirements in the downtown to 2031. This analysis is comparable to the analyses contained in Section 9. In this case, however, the Primary Zone represents the primary zone for the Downtown, while the Secondary Zone is the Rest of Burlington. Expenditures from outside the City are analyzed as inflow which has been estimated based on the Downtown Intercept Survey results. As in Section 9, local expenditures have been estimated based on the per capita income index to the Province. The total potential is calculated by multiplying the per capita expenditures by the population in each zone. The Downtown Share of expenditures for each zone is based on the consumer telephone/on line surveys and the downtown intercept survey. Based on the 2012 Downtown Share assumptions, an estimate of inflow from outside the City of 20% and the inventory of space, it is calculated that the current sales per square foot generated by Downtown non food retail stores is $366, which is above the City wide average of $286. In future years, we have assumed minor increases in the downtown market share recognizing the increased commercial and residential development planned for the downtown and its ability to generate a greater critical mass of retail space. As the downtown increases in scale, it will grow its attractiveness as a visitor destination. Based on the anticipated growth to 2031, including population increases, real growth in expenditures and an increase in market attraction, it is calculated that there will be a requirement for some 76,500 square feet of additional non food store space by 2031, assuming a sales per square foot planning ratio of $400 per square foot. 111
FIGURE 10 1: DOWNTOWN WARRANTED NFSR SPACE PROJECTION 2012 Dollars 2012 2031 Primary Zone Income Index to Province 1.18 NFSR Expenditure Index to Province (1 1.07 Per Capita NFSR Expenditure (1 $ 5,989 $ 7,696 Population 46,000 53,000 TOTAL NFSR POTENTIAL $ 275.5 $ 407.9 Secondary Zone (Rest of Burlington) Income Index to Province 1.24 NFSR Expenditure Index to Province (1 1.10 Per Capita NFSR Expenditure (1 $ 6,131 $ 7,882 Population 137,100 142,700 TOTAL NFSR POTENTIAL $ 840.5 $ 1,124.8 Total Trade Area TOTAL NFSR POTENTIAL $ 1,116.0 $ 1,532.7 Primary Zone NFSR Expenditure Potential $ 275.5 $ 407.9 Downtown Share (%) (2 10.00% 11.00% Estimated Downtown Share ($ Millions) $ 27.6 $ 44.9 Residual Potential $ 17.3 Secondary Zone (Rest of Burlington) NFSR Expenditure Potential $ 840.5 $ 1,124.8 Downtown Share (%) (2 2.15% 2.25% Estimated Downtown Share ($ Millions) $ 18.1 $ 25.3 Residual Potential TOTAL TRADE AREA NFSR Expenditure Potential $ 1,116.0 $ 1,532.7 Estimated Downtown Share (%) 4.1% 4.6% Estimated Downtown Share ($ Millions) $ 45.7 $ 70.2 Residual Potential $ 24.50 Existing NFSR (156,283 sf) Sales/SF Levels (Including average level of inflow of 20%) $ 366 WARRANTED ADDITIONAL NON FOOD STORE RETAIL (NFSR) SPACE Additional Residual Potential Available Plus Inflow Sales @20% (3 ADDITIONAL SALES POTENTIAL AVAILABLE $ 30.6 WARRANTED ADDITIONAL SQUARE FEET @ $325 per square foot 94,200 @ $350 per square foot 87,400 @ $375 per square foot 81,600 @ $400 per square foot 76,500 Source: urbanmetrics inc. 1) Local expenditures are based on relationship to income. (See Appendix D for regression equation) 2) 2012 Downtown Share base on the telephone, on line and downtown intercept surveys. 3) Estiamted based on the downtown intercept survey. 112
10.2.2 FOOD STORE RETAIL ANALYSIS A similar analysis has been undertaken for food stores, including supermarkets and specialty stores. Based on the telephone survey, on line and downtown intercept surveys, a large share of downtown food purchases are made by residents of the Primary Zone. As with the NFSR category, increases in the Downtown share has been estimated reflecting overall growth in the Growth Centre. Based on the anticipated growth to 2031, including population increases, real growth in expenditures and an increase in market attraction, it is calculated that there will be a requirement for some 31,300 square feet of additional food store space by 2031, assuming a sales per square foot planning ratio of $600 per square foot. 113
FIGURE 10 2: DOWNTOWN WARRANTED FSR SPACE PROJECTION 2012 Dollars 2012 2031 Primary Zone Income Index to Province 1.18 FSR Expenditure Index to Province (1 1.02 Per Capita FSR Expenditure (1 $ 2,270 $ 2,378 Population 46,000 53,000 TOTAL NFSR POTENTIAL $ 104.4 $ 126.0 Secondary Zone (Rest of Burlington) Income Index to Province 1.24 FSR Expenditure Index to Province (1 1.02 Per Capita FSR Expenditure (1 $ 2,284 $ 2,393 Population 137,100 142,700 TOTAL NFSR POTENTIAL $ 313.2 $ 341.5 Total Trade Area TOTAL NFSR POTENTIAL $ 417.6 $ 467.5 Primary Zone NFSR Expenditure Potential $ 104.4 $ 126.0 Estimated Downtown Share (%) (2 26.50% 35.00% Estimated Downtown Share ($ Millions) $ 27.7 $ 44.1 Residual Potential $ 16.4 Secondary Zone (Rest of Burlington) NFSR Expenditure Potential $ 313.2 $ 341.5 Estimated Downtown Share (%) (2 0.70% 0.80% Estimated Downtown Share ($ Millions) $ 2.2 $ 2.7 Residual Potential TOTAL TRADE AREA NFSR Expenditure Potential $ 417.6 $ 467.5 Estimated Downtown Share (%) 7.2% 10.0% Estimated Downtown Share ($ Millions) $ 29.9 $ 46.8 Residual Potential $ 16.90 Existing NFSR (49,255 sf) Sales/SF Levels (Including average level of inflow of 10%) $ 674 WARRANTED ADDITIONAL NON FOOD STORE RETAIL (NFSR) SPACE Additional Residual Potential Available Plus Inflow Sales @ 10.0% (3 $ 1.90 ADDITIONAL SALES POTENTIAL AVAILABLE $ 18.8 WARRANTED ADDITIONAL SQUARE FEET @ $500per square foot 37,600 @ $525 per square foot 35,800 @ $575 per square foot 32,700 @ $600 per square foot 31,300 Source: urbanmetrics inc. 1) Local expenditures are based on relationship to income. (See Appendix D for regression equation) 2) 2012 Downtown Share base on the telephone, on line and downtown intercept surveys. 3) Estiamted based on the downtown intercept survey. 114
10.2.3 SERVICES AND SELECTED RETAIL SPACE ANALYSIS Figure 10 3 summarizes the analysis of future warranted services space in the downtown. The first portion of this table identifies the existing space per capita ratios for the City and the targets identified in Section 9.3. The future additional space is based on a population growth of 7,000 persons in the Primary Zone. The Downtown Share and Inflow from outside the Primary Zone for each category are based on our evaluation of the existing downtown inventory. Based on this analysis, by 2031, the additional population of 7,000 in the Primary Zone of the Study Area, recognizing appropriate levels of inflow, will require an additional 110,600 square feet of services space, including liquor, beer and wine stores. FIGURE 10 3: SERVICES AND SELECTED RETAIL WARRANTED SPACE ANALYSIS 115
10.2.4 DOWNTOWN WARRANTED SPACE SUMMARY As indicated in Figure 10 4, in total by 2031, there will be a requirement for some 190,500 square feet of additional space downtown. FIGURE 10 4: 2031 FUTURE WARRANTED DOWNTOWN SPACE SUMMARY Category Warranted Space (SQ FT) Non Food Store Retail 76,500 Food Store Retail 31,300 Services and Selected Retail 82,700 TOTAL SPACE 190,500 116
11 SUPPLY AND DEMAND RECONCILIATION Figure 11 1 summarizes the reconciliation of commercial space supply and demand. As indicated by this figure, based on our market analysis, by 2031, there will be a need for some 1.55 million square feet of new commercial space. At the same time, there is currently some 1,194,000 square feet either committed or proposed, for a residual shortfall of approximately 350,000 square feet. Several points need to be understood with regards to this analysis: First, including the IKEA application, which has been recommended for approval by Planning Staff, approximately 957,000 square feet is approved on Regional Commercial sites. This would consume some 60% of the demand by 2031. Excluding the approved supermarket at 3505 Dundas and recognizing that typically only about 10% of space in power centres comprises services, it is estimated that approximately 860,000 square feet already approved will comprise regional non food retail space. This would leave approximately 335,000 square feet of non food retail space available for the remainder of the City. Secondly, by 2031 there will be demand for some 101,100 square feet of additional food store space. Recognizing the proposed supermarket at 3505 Dundas Street, this would leave a residual of approximately 65,000 square feet. This would provide an opportunity for one or two mid sized supermarkets and/or a collection of smaller food stores. A portion of this would be required to serve future growth in the downtown. As calculated in the previous section, the warranted space to 2031 in the Downtown would amount to some 190,500. This would leave only 160,000 square feet available for new development in the rest of the City. This is a relatively small amount and should support new population along the Urban Growth Corridor and mixed use development in proximity to the GO Transit stations and Regional Mall sites, as well as, providing local serving commercial space in areas such as West Aldershot which may lack certain retail facilities. As noted, there are already a number of vacant sites in these areas with approval for commercial space, often as part of mixed use zoning category. Where applications for new commercial space are made, approval should give priority to those developments supporting population intensification areas and in existing areas lacking local serving retail facilities. 117
FIGURE 11 1: SUPPLY AND DEMAND RECONCILIATION FIGURE 1 11: SUPPLY AND DEMAND RECONCILIATION Square Feet Demand Non Food Store Retail 1,192,100 Food Store Retail 101,100 Selected Services 246,300 Liquor/Beer/Wine Stores 6,900 Total Demand 1,546,400 Supply Immediate Development Prospect 125,268 Other Proposed Developments 721,350 Significant Undeveloped Designated and Zoned Sites 347,354 Total Supply 1,193,972 Unfulfilled Demand 352,428 It is important to note that the analysis contained in this report should be viewed with some flexibility and, specifically should not be used to regulate land uses on a category by category basis. 118
12 CONCLUSIONS Burlington is strategically situated within the Western GTA highway network which allows it to draw retail sales from well beyond its boundaries. Above average incomes in the community also provide an opportunity for increased retail sales. Over the past 10 years, the growth in commercial space has outpaced population growth. The current supply of commercial space is above average for suburban GTA municipalities. However, vacancy rates and sales performance levels in the City indicate that the retail market is still in balance. The 2003 Burlington Commercial Market Study conducted by Robin Dee & Associates and Sorenson Gravely Lowes Planning Associates Inc. concluded that the retail hierarchy in the Official Plan provides, in general, for an appropriate distribution of retail space across the City while providing for a high level of service. With considerable growth in the commercial structure, the same conclusion can be reached with regards to the distribution of commercial space as it exists today. As the City is quickly approaching its greenfield capacity, the largest share of residential growth will be attracted to intensification sites: including the downtown Urban Growth Centre; Urban Growth Corridors along Plains Road and Fairview Street; and mixed use areas around the existing malls and GO rail stations. Between 2012 and 2031, the City s population is projected to grow by some 12,600 persons to a level of 195,700. This population allows the City to maintain the full range of retail formats and major retail stores typically found in most suburban GTA markets. In addition, its strategic location and above average incomes have enabled Burlington to attract a number of large format specialty retailers, such as: IKEA, Mountain Equipment Co Op, Sail and Lee Valley Tools, found only in select markets. The current commercial inventory accounts for some 10.6 million square feet. Burlington has a traditional commercial structure, with the single largest concentration of space found in the Downtown core. The City has two enclosed regional shopping centres, four major power centre nodes, and an arterial commercial corridors extending along Fairview Street and Plains Road. Together these nodes comprise some 41% of the total inventory. The largest share of space is comprised of local serving and arterial commercial facilities not part of a major node. This structure provides for a balanced distribution of commercial space in relation to residential neighbourhoods. 119
There are 17 supermarkets in the City. With the exception of West Aldershot all residents are within two kilometres of a supermarket. This is the typical market area served by a supermarket in an urban area. In terms of active transportation, every major retail node can be accessed by transit. Supermarkets, however, are outside of walking distance for the majority of the population. Most major retail destinations are connected to the bike and recreational trail network. The network itself is somewhat disjointed, with the major expressways acting as barriers. The best connectivity is found along the hydro right of ways, New Street and Lakeshore Road. Regardless of the overall connectivity to the network, barriers to cycling safety can still exist in terms of entering and exiting shopping centres and in terms of on site movement. Burlington s Trade Area has changed somewhat over the past 10 years. New commercial development in Burlington has enabled it to penetrate more heavily into Oakville, despite the more recent opening of the Burloak Power Centre on the Oakville Burlington boundary. At the same time, however, new major retail development at Dundas and Highway 6 in Waterdown has reduced inflow by residents of this Hamilton community, as well as by residents of rural Flamborough. Burlington s current trade area has been delineated to include the entire City; western Oakville; Dundas and a portion of upper Hamilton. Based on the consumer research conducted as part of this study, the majority of Burlington Residents are generally satisfied with the type and format of retail and service offerings available to them. Approximately 21% of the respondents to the telephone and online surveys felt there were too many big box retail developments and 29% felt there were too many fast food outlets. Based on the on line/telephone surveys, the on street intercept surveys, and the downtown workshop, there was a strong desire for additional food store offerings downtown and more entertainment opportunities. A number of trends are and will continue to influence commercial development in the future: Owing to competitive pressures from big box retailers many shopping centres at the mid range of the commercial hierarchy have de malled. Some have transformed into mixed residential retail projects, and others such as Appleby Mall have reinvented themselves as open concept new format centres. A number of major retailer chains (e.g. Walmart, Sobeys, Home Depot, Best Buy) are developing smaller concept stores that allow them to enter urban markets and markets too small to support traditional formats. 120
In part due to pressure from new planning policies, mixed use and street related retail formats are being introduced in a number of markets. Bur Oak drive in Cornell and Disera Drive in Vaughan are examples in traditional suburban communities. In Burlington, a number of mixed use projects with street related retail have been developed along Plains Road. These types of projects have had varying degrees of success, with the most successful being situated near to high density residential development; on major roadways; and in areas of existing pedestrian activity. US and foreign retailers are continuing to find the Canadian market attractive. Over the next year, Target will be opening two stores in Burlington in former Zellers outlets. In addition, they will be opening stores at Hopedale Mall in Oakville and in Waterdown. As Target will likely generate much higher sales than the former Zellers tenants, it will likely attract a portion of future sales growth that might have otherwise gone to new retailers, as well as, attracting some sales from existing retailers. We do not, however, anticipate that the two new Targets in Burlington, will have an impact on the commercial hierarchy, but rather represent normal competitive behaviour within the marketplace. A number of retail chains have broadened their merchandise lines, which has in some cases caused a blurring of traditional anchor roles. Walmart Superstores, for example contain a supermarket scale food component; Loblaws carries the Joe Fresh apparel line; and the new format Shoppers Drug Mart stores contain a selection of grocery items. These stores can serve a variety of commercial functions at multiple levels of the hierarchy. Internet shopping has become common place. Some 22% of Burlington telephone survey respondents and 43% of on line respondents reported making an internet purchase over the past month. Although the total volume of on line sales is small in comparison to the total retail market, it has had a significant impact on certain retail categories, including: books, recorded music, software, video sales and rental, and travel bookings. The aging North American consumer base has resulted in changing shopping patterns. As the baby boom generation moves through retirement over the next two decades, there will likely be increased demand for services at the expense of retail merchandise and a growing movement towards quality and value for money. Based on the market analysis contained in this report, by 2031, there will be a need for some 1.55 million square feet of new commercial space in the City. At the same time, there is currently some 1,194,000 square feet either committed or proposed, for a residual shortfall of approximately 350,000 square feet. 121
Including an application by IKEA to expand and relocate to a site at Walkers Line and the QEW, which has been recommended for approval by Planning Staff, approximately 927,000 square feet is already approved on Regional Commercial sites. This would consume some 60% of the demand by 2031. Secondly, by 2031 there will be demand for some 101,100 square feet of additional food store space. Recognizing the proposed an approved supermarket on Dundas Street, this would leave a residual of approximately 65,000 square feet. A large share of this would be required to serve future growth in the downtown. Based on the downtown intercept survey, Downtown Burlington serves a primary market bounded by King Road, Walkers Line, the QEW/Hwy 403 and Lake Ontario. This area contains a number of key intensification areas including: the Urban Growth Centre, the two Regional Malls, the Burlington GO station, and portions of the Fairview Street/Plains Road Urban Corridor. Based on Halton Region s Best Planning estimates, it is estimated that this area will grow by approximately 7,000 residents between 2012 and 2031. This would result in additional warranted space in the Downtown Urban Growth Centre of approximately 190,500 square feet by 2031. If this amount of space were developed in the downtown, it would leave only approximately 160,000 square feet available for new development in the rest of the City. This is a relatively small amount and should support new population along the Urban Growth Corridor and mixed use development in proximity to the GO Transit stations and Regional Mall sites, as well as, providing local serving commercial space in areas such as west Aldershot which may lack certain retail facilities. As noted, there are already a number of vacant sites in these areas with approval for commercial space, often as part of a mixed use zoning category. Where applications for new commercial space are made, approval should give priority to those developments supporting population intensification areas and in existing areas lacking local serving retail facilities. The results of the market analysis clearly indicate that the available supply of commercially designated lands will be sufficient to meet future demand to 2031. As such, there will be no need to designate additional commercial lands to support growth to 2031. The only exceptions to this would be to meet local serving needs in existing undersupplied portions of the City, such as west Aldershot, or to provide for local serving retail to support future residential development in intensification areas. Similarly, the conversion of employment lands to commercial is not required to support future growth in Burlington and should be avoided. 122
APPENDIX A LICENCE PLATE SURVEY RESULTS Licence plate surveys are used to determine the geographic draw or Trade Area of retail centres, nodes or individual locations at a certain point in time. For the City of Burlington, licence plate numbers were collected over a three week period in the Fall of 2012, including the last two weeks of September and the first of October. The licence plate surveys were conducted at Burlington Mall, Mapleview Centre, Burlington Power Centre (Brant Street & the Queen Elizabeth Way), Millcroft Centre, the Appleby Dundas Power Node and the Burloak Centre in Oakville. Once collected, licence plate numbers were submitted to the Ministry of Transportation to obtain the Dissemination Area (DA) corresponding to the licence plate registrant. Approximately 1,849 unique licence plate records were collected during the research period. The Ministry of Transportation returned 1,747 location records for shoppers, of which 1,461 related to the five identified shopping destinations located within the City of Burlington (i.e., excluding Burloak Centre). It should be noted that although licence plate surveys provide an indication of the Trade Are of a retail centre, they do have certain limitations. Licence plate surveys do not capture the pedestrian traffic or shoppers using transit and therefore the results tend to over represent the draw from outlying areas. Furthermore, it should also be noted that in some instances, the address on the registration of a car is not the same address as the person driving the car. For example, this may occur when the car is rented or leased to a business address. The detailed results of the licence plate surveys for each location are presented in Figure A 1 and Figure A 2, which indicate the total number and percentage of vehicles originating from each of the identified Customer Origin locations, respectively. In addition, the maps in Figures A 3 to A 8 provide an illustration of the geographic distribution of customer origins throughout the various Trade Area zones and beyond. 123
FIGURE A 1: CUSTOMER ORIGIN SURVEY RESULTS, 2012 (NUMBER OF LICENCE PLATES) CUSTOMER ORIGIN Burlington Mall Mapleview Centre SURVEY LOCATION Burlington Power Millcroft Centre Centre Appleby Dundas Node Burloak Centre TOTAL BURLINGTON LOCATIONS 1 TRADE AREA 212 167 160 204 198 185 1,126 941 Primary Zone 178 119 126 182 161 92 858 766 Secondary Zone East 13 20 15 15 31 73 167 94 Secondary Zone West 21 28 19 7 6 20 101 81 OUTSIDE TRADE AREA 89 135 132 80 84 101 621 520 Other Oakville 9 8 5 11 4 12 49 37 Milton 1 4 5 5 9 5 29 24 Halton Hills 0 3 3 2 5 1 14 13 Other Hamilton 31 55 45 13 21 22 187 165 All Other 48 65 74 49 45 61 342 281 TOTAL 301 302 292 284 282 286 1,747 1,461 Not Geocoded 2 13 13 23 17 19 17 102 85 GRAND TOTAL 314 315 315 301 301 303 1,849 1,546 SOURCE: urbanmetrics inc. (2012). 1 Represents sum of corresponding figures for all five shopping destinations located in the City of Burlington. Excludes results for Burloak Centre in Oakville. 2 Represents licence plate records for which the Ministry of Transportation (MTO) was unable to provide corresponding location data. 124
FIGURE A 2: CUSTOMER ORIGIN SURVEY RESULTS, 2012 (PERCENTAGE OF LICENCE PLATES) CUSTOMER ORIGIN Burlington Mall Mapleview Centre SURVEY LOCATION Burlington Power Millcroft Centre Centre Appleby Dundas Node Burloak Centre TOTAL BURLINGTON LOCATIONS 1 TRADE AREA 67.5% 53.0% 50.8% 67.8% 65.8% 61.1% 60.9% 60.9% Primary Zone 56.7% 37.8% 40.0% 60.5% 53.5% 30.4% 46.4% 49.5% Secondary Zone East 4.1% 6.3% 4.8% 5.0% 10.3% 24.1% 9.0% 6.1% Secondary Zone West 6.7% 8.9% 6.0% 2.3% 2.0% 6.6% 5.5% 5.2% OUTSIDE TRADE AREA 28.3% 42.9% 41.9% 26.6% 27.9% 33.3% 33.6% 33.6% Other Oakville 2.9% 2.5% 1.6% 3.7% 1.3% 4.0% 2.7% 2.4% Milton 0.3% 1.3% 1.6% 1.7% 3.0% 1.7% 1.6% 1.6% Halton Hills 0.0% 1.0% 1.0% 0.7% 1.7% 0.3% 0.8% 0.8% Other Hamilton 9.9% 17.5% 14.3% 4.3% 7.0% 7.3% 10.1% 10.7% All Other 15.3% 20.6% 23.5% 16.3% 15.0% 20.1% 18.5% 18.2% TOTAL 95.9% 95.9% 92.7% 94.4% 93.7% 94.4% 94.5% 94.5% Not Geocoded 2 4.1% 4.1% 7.3% 5.6% 6.3% 5.6% 5.5% 5.5% GRAND TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% SOURCE: urbanmetrics inc. (2012). 1 Represents sum of corresponding figures for all five shopping destinations located in the City of Burlington. Excludes results for Burloak Centre in Oakville. 2 Represents licence plate records for which the Ministry of Transportation (MTO) was unable to provide corresponding location data. 125
FIGURE A 3: MAP OF CUSTOMER ORIGIN LICENCE PLATE SURVEY RESULTS (MAPLEVIEW CENTRE) SOURCE: urbanmetrics inc., based on licence plate surveys conducted in September and October, 2012. 126
FIGURE A 4: MAP OF CUSTOMER ORIGIN LICENCE PLATE SURVEY RESULTS (MAPLEVIEW CENTRE) SOURCE: urbanmetrics inc., based on licence plate surveys conducted in September and October, 2012. 127
FIGURE A 5: MAP OF CUSTOMER ORIGIN LICENCE PLATE SURVEY RESULTS (BURLINGTON POWER CENTRE) SOURCE: urbanmetrics inc., based on licence plate surveys conducted in September and October, 2012. 128