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Community & Economic Development
1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021
To: Redevelopment Commission
From: David Relos, Economic Development Planner
Subject: Professional Services Agreement — Dakota Worldwide
La Salle Square grocery store analysis
Date: June 14, 2012
As part of the ongoing efforts to improve the retail environment of the La Salle Square area,
the neighborhood has targeted a grocery store as an important need. To facilitate attracting
a grocer, members of the La Salle Square Steering Committee have had discussions with
professionals in the grocery store industry.
An identified resource to help understand the profitability of a proposed grocery store at any
location, but specifically for La Salle Square, Dakota Worldwide was recommended.
Dakota will study the area, define a trade area, and most importantly, generate sales
forecasts for a three year period. These sales forecasts are an important tool that would be
able to be input into an interested party's pro forma statements, to help them understand
expected profit margins.
As part of Dakota's proposal, they will also do this same analysis for a downtown location.
Dakota's report will include a competition map, a summary of that competition, a trade area
delineation, an analysis of the proposed site, and a three year sales forecast for both La
Salle Square and downtown. Their fee for these two reports is $6,500 plus expenses in the
not -to- exceed amount of $1,600, for a total of $8,100.
Staff requests approval of this Professional Services Agreement, in a not -to- exceed amount
of $8,100.
What We Do Today Makes A Difference!
DAKOTA
June 6, 2012
Thank you for your interest in having Dakota Worldwide perform a market analysis to determine
the feasibility of opening a 7,000 square foot grocery store at either 1033 North Bendix Drive or
425 South Michigan Street in South Bend, Indiana. The following is a brief description of the
work we perform along with costs and timing.
Scope of Project
The project begins with field work. Competitors will be identified and evaluated based upon
facility size, sales volume, operations and depth of the natural foods assortment. Government
officials for all the communities that will be affected by the new cooperative will be queried.
Building permits and subdivision activity reports will be reviewed to determine potential market
changes and population variances from the 2010 Census. Possible road changes that may affect
traffic patterns at or near the sites will also be taken into consideration.
When the fieldwork is complete, our analyst will first define a trade area. The trade area is
determined by the existing road network, natural boundaries, shopping patterns, drive times and
the site's relationship to competition. After the trade area has been defined, the analyst will
build a LOCUSTM model for the entire trade area. Once a model of the current marketplace has
been constructed, the new grocery store will be introduced into the marketplace and three -year
sales forecasts generated. The entire process will then be reviewed by other in -house analysts to
ensure the accuracy of the modeling process and subsequent sales forecasts.
Sales projections for the proposed store will be based on site characteristics, population changes,
existing demographics, store operations, competitive strengths, and any possible market changes
that are likely to occur. Various sizes can be tested.
The fee for this analysis is $6,500 plus expenses. Expenses are essentially the travel costs
associated with conducting the field work. They include airfare, car rental, hotel, and a meal per
diem. For this project the expenses will be capped at $1,600.
Deliverables
Deliverables will include a competition map and a detailed report which includes, along with
three -year sales forecasts for the site, a summary of competition, trade area delineation, and an
analysis of the site.
Dakota Worldwide requires a 50% down payment before field work commences. Once a down
payment is received, your project will be scheduled. Timing is approximately three weeks from
the beginning of field work to when the final report is delivered.
Dakota Worldwide Corn.
8200 Humboldt Avenue S, Suite 302 • Minneapolis, MN 55431
Telephone 800.475.4505