Retail demand in District would remain high even after Wal-Mart opens stores in city

No matter where residents stand on the debate over a plan by Wal-Mart to open a handful of stores in the nation’s capital, what is clear is that the District of Columbia is served by far less retail than the rest of the region, particularly by grocery stores.

While the D.C. metropolitan area has more retail square feet per capita (42 square feet per resident) than the U.S. average (39 square feet per resident), much of that total reflects the impact of suburban store space. The amount of retail space per capita within the District itself is significantly lower at 35 square feet per resident.

Analyzing further by type of retailer, the disparity becomes even clearer. Strolling through downtown D.C., it appears there is no shortage of coffee shops and, indeed, the District boasts 25 percent of the region’s Starbucks locations. On the other hand, while home to 10 percent of the region’s residents, D.C. is home to just 6 percent of the region’s total grocery store square footage.

The result is a supply-demand imbalance in which one of every three dollars spent on groceries by a D.C. resident is tendered at a store outside of the District, in comparison to an average of one of every five dollars spent on groceries across the region.

Currently, D.C. residents spend an estimated $770 million at grocery and big-box department stores outside of the District, enough to support an estimated 1.8 million square feet of retail space.

To date, only two of the six Wal-Mart stores proposed in the District have been issued building permits, one at 77 H St. NW and the other at 5929 Georgia Ave. NW. Proponents welcomed the arrival of a low-cost, large selection retail operator, along with the more than 1,200 jobs it promised. Opponents expressed concerns over the impact the new retailer would have on local retailers.

But sizing up the inventory and spending power for each proposed store, evidence suggests that there is sufficient un-met demand to support the new Wal-Mart stores.

In fact, the current disparity between demand and supply for the kind of goods that Wal-Mart sells within a two-mile area surrounding the Georgia Avenue and Missouri Street site, where Wal-Mart plans to open its first store in the District by the end of next year, is enough to support an additional 250,000 square feet of grocery or discount department store space, even after factoring in potential overlap from another proposed Wal-Mart to be incorporated into the neighboring Fort Totten Square project.

Erica Champion is a senior real estate economist for CoStar Group in Washington.

business

capitalbusiness

Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Comments
Show Comments
Most Read Business

business

capitalbusiness

Success! Check your inbox for details.

See all newsletters

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.