Heated Growth
The Southeast
The Southeast is where the action is,” says
Robert Welch, president of Austin-based Synergos Technologies, a company
known for its population experts. Every three months, Synergos conducts
market studies geared toward the retail
industry. In these studies, called Pop Stats, Synergos defines hot markets
as “15-mile radius rings,” with a population increase of at
least 8,500 people per year. In order to be covered by Pop Stats, a market must be growing at a minimum rate of 2
percent per year.
Based on the most recent data compiled by Synergos, the
most lucrative markets in the East are found in the bottom portion of the
region. And most of the action is concentrated in Florida, followed by
Georgia and North Carolina.
Synergos has deemed northern Gwinnett County,
Georgia—which includes the Atlanta metro area—the hottest
market not only in the Southeast but the entire eastern region of the
country. The county’s population is expected to increase by 30,000
people this year.
Other hot spots in the Southeast include Loudoun
County, Virginia, which encompasses the Washington-Baltimore metro area;
Richmond, Virginia; and New Castle County, Delaware. New Castle County
should become more viable as more people move into the 15-mile radius
ring—making the area worth watching and possibly moving into in the
near future, Welch says.
In June, the U.S. Census Bureau released its list of
top-10 major cities for growth. At the top of that list was Port St. Lucie,
Florida, where the population jumped 12 percent from July 2003 to July
2004. Two other Florida cities—Cape Coral and Miramar—were also
included in the list.
Fifty miles south of Port St. Lucie is Welch’s
number-one hot market pick for Florida—Palm Beach. Synergos estimates
the city’s population will pass 800,000 this year. Robb Report magazine called the area “The Best Place to Live” in 2003. Palm Beach residents are
among the most affluent in the country, with a median income close to
$95,000. Plenty of money to spare for eating out.
Take a trip north to Orlando, and you’ll find
another rapidly growing area. Suburbs south of the city are growing at a
breakneck pace, with the majority of development happening southwest of
Orlando. Synergos experts estimate the population in these combined areas
will top 508,000 this year—an increase of more than 28 percent since
the turn of the century. Welch predicts the area north of Orlando will soon
emerge as a hot market and places it at the top of the up-and-coming list.
Outside of Florida, the
second best bet is central Georgia—specifically northern Gwinnett,
Henry, Paulding, and Cherokee counties. (Think Atlanta suburbs.) The latest
census estimates place the Atlanta metropolitan area as the ninth largest
metro area in the country. The city itself is growing rapidly in terms of
population and commercial development, making
this area a perfect place for new quick-serve concepts to settle down.
Also near the top of Welch’s hot markets list is
North Carolina’s northern Mecklenburg County. Charlotte is the county
seat there and is ranked as one of the fastest-growing cities in the
country. At the time of the 2000 Census, Mecklenburg County was growing at
a rate of 8.2 percent—nearly double that of the state itself.
The Northeast
In contrast to the
Southeast’s rapid development, the
Northeast presents more of a challenge to quick-serves looking to expand.
Because of the saturation of the Northeast–New York City,
primarily–Welch doesn’t see any spectacular markets here. The only area that almost made the list was in
what Welch calls the heart of New Jersey.
“There’s some growth in central New Jersey,” he explains, “but to be qualified as a
hot market, you have to grow at least 2 percent per year, and it has to be
localized growth. New Jersey just didn’t make the cut.”
Central New Jersey isn’t the only major
northeastern region to be left of the hot markets list.
“There’s not a lot going on in the Northeast,” Welch
says. “That’s just the way it is. There are no singular market
areas where there is growth. It’s mostly densely populated; there
isn’t a lot of room to grow
there.”
Andrew Moger of Branded Concept Development, an
outsourced firm that focuses on retail design and construction, agrees that
the Northeast is overpopulated and that any growth in the area is limited.
However, Moger thinks the New York metro area is still worth consideration.
“New York has been a
place where national chains feared coming to,” he says. “But
national brands are finding out that New York is no different than the rest
of the country in terms of whether it’s a unique food concept or the
marketing campaigns work here just as they work
in other parts of the country.”
However, Moger suggests that new quick-serves should
start in the ’burbs and work their way up to cities like the Big
Apple. Because of the varying ethnicities and tastes that come together
when people move to the city, it’s easy enough to be accepted, no
matter what the concept. “New York is considered one of the best food
cities in the world,” he says. “Coming into this market, the
food is well received.”
But for new brands, the best bet is to work up to the
city. “The surrounding area, outside of
New York City, is where a lot of new concepts are finding more success, by
going to the suburban markets first,” Moger explains. Because
construction, labor, and occupancy costs are more comparable to the norm on
the outskirts of New York, new concepts have more of an opportunity to build brand recognition.
Moger suggests Long Island, along with Westchester and
Rockland counties, as good New York suburbs to begin building a brand
presence. Northern New Jersey, specifically Bergen County, is another
up-and-coming affluent area. —Krysten Pyles
