More restaurants are on their way to Victoria.
A fast food restaurant and a casual sit-down restaurant, both national chains, are strongly considering opening locations in Victoria, said Aaron Farmer, senior vice president of Retail Coach. Farmer spoke Wednesday at the Victoria Chamber of Commerce’s luncheon.
“We’re working with a couple of restaurants that are working on sites right now,” said Farmer, who has worked with the city to attract retail and restaurant chains for more than five years. “I would hope they come in the next few months ... We’re talking to a few others, but (they are) not that far along in the process.”
The retail economy is strong in Victoria, Farmer said and sales tax revenue has been steady or increasing in recent years. Sales tax revenue for the city in 2018 was about $25.4 million, about $2.3 million higher than the total revenue in 2017, according to figures from the State Comptroller’s Office. The sales tax revenue total peaked during the past five years in 2014 with $27.3 million during the Eagle Ford Shale oil boom.
Openings and closings of businesses is happening nationally and is not just in the Victoria market. For example Sears, which closed its Victoria location Jan. 6, has been falling behind for the past 10 years, Farmer said.
Online retail, such as Amazon, has encroached on local and national storefronts. To combat this, companies like Walmart and Target have a large online presence, and some companies, like Best Buy, do price matches for any product they sell to retain customers. Local businesses should also consider offering online sales or match prices, he said.
“One of the biggest impacts is we’re seeing online sales go up and, (from a) national and regional standpoint, seeing physical store sizes shrink. Days of Kohl’s having 100,000-square-foot stores, we’re seeing them go into half of that. (We’re) seeing restaurants do that as well,” he said. “(They’re) coming in with smaller concepts, and they’ll have online ordering.”
The primary retail trade area of regular shoppers in Victoria is much larger than the city limits and has a population of about 135,000 people, Farmer said. The average household of this group spends about $82,000 a year and has the median age of 36.
“We’re able to track and get factual data to national retailers and restaurants,” he said. “This is data, you as local businesses, can use as well. Are you marketing in the right areas?”
Victoria is close to four larger cities and has retail leakage, or how much money is leaving the area because of locals shopping elsewhere, Farmer said.
Restaurants and other rstaurants in the city had a retail leakage of more than $100 million last year, according to the Retail Coach.
“Let’s make it a goal to reduce this leakage over time,” he said.
The first place chain restaurants and retail companies want to look for a location in Victoria is on North Navarro Street, primarily between H-E-B Plus! and Walmart, Farmer said. About 45 percent of national retail growth in 2017 and 2018 was restaurants, which is expected to approach 50 percent in 2019. Also, restaurant spending is now higher than grocery spending.
The state and national economy is also doing well, Farmer said, and holiday sales from Thanksgiving through New Year’s Day increased between 4.3 and 4.8 percent over the 2017 holiday season. Consumer confidence is also at its highest level in 18 years.
“From an economic standpoint everything is setting up for it to be a good 2019 and 2020,” Farmer said.