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home : most recent : statewide implications January 16, 2018


1/5/2018 11:25:00 AM
Bricks and mortar: Terre Haute's future for retail involves adapting to changes

Mark Bennett, Tribune-Star

Thousands of Hauteans have worked in retail businesses here, or have a relative who’s a retail employee.

It’s part of the local culture. Terre Haute was a brick-and-mortar shopping hub before anyone used the term “brick-and-mortar.” For many, memories of youth are linked with trips to downtown department stores to buy back-to-school clothes or corduroy pants for the winters, the pungent aroma of onions on the submarine sandwiches inside the entrance of Kmart on Wabash Avenue, or sipping a creamy drink at Orange Julius restaurant in Honey Creek Mall.

That culture has changed, and continues to change. That reality was reaffirmed by Wednesday’s announcement by Macy’s that the national retail chain will close its Honey Creek Mall store in March. Macy’s occupies one of the mall’s longtime anchor spots — the two-story building on the mall’s south end. Roots first filled that location in 1970, joining Sears on the mall’s north end, followed by L.S. Ayers in 1998 and finally Macy’s in 2006.

Today, brick-and-mortar stores and malls face increasing competition from bigbox stores and online retailers, such as Amazon. Nationwide, online purchases on Black Friday surged 17 percent during this past Christmas season, compared to 2016, according to statistics from Adobe Digital Insights reported in The New York Times last month.

Meanwhile, this year’s closing of the local Macy’s is part of a plan, announced by the company last summer, to close more than 100 stores. On Thursday, Sears announced it will close more than 100 stores in 2018, but the Terre Haute’s outlet — the original Honey Creek Mall store — was not on that list.

Retail workers here, as well as shoppers, wonder what the future holds for that sector of the labor force and economy. It’s a significant concern. A hefty 12.4 percent of Vigo County’s jobs are in retail trade, according to the Indiana Business Research Center and Indiana University’s Kelley School of Business. That number has dropped since a peak in December 1995, when 14,500 Hauteans earned paychecks in retail. In October, the local retail workforce numbered 9,200, up slightly from the Great Recession years. Retail and its employees have a future in Terre Haute.

It will require adaptation,
said Carol Rogers, deputy director of the Indiana Business Research Center in Indianapolis. Malls that lose a large department store are filling those vacant spaces with a Target or Walmart outlet, or a combination of smaller retail shops, entertainment businesses, pop-up stores (those on flexible, short-term leases), Rogers explained. As for the employees, the closing of those department stores can feel devastating to those laid-off workers, Rogers said, but options after those shutdowns exist in this increasingly digital economy.

“To me, Macy’s leaving isn’t a sign of a dying economy in Terre Haute,” Rogers said. Instead, “this is a Macy’s problem.” She expects many people traditionally drawn to retail work to fill jobs providing retail-style services to the large, aging Baby Boom population. Some many start their own micro-businesses. Think: “Alexa, find me someone to deliver my groceries.” Such quick, digital connection to services will “allow a lot more people to stay home and request things,” Rogers said. That list includes not only groceries, but health care supplies, prepared meals and household items.

Somebody has to gather and deliver those goods. And that’s one of the new faces of retail. For Terre Haute to maintain a niche in the retail market, that diversification must happen on a larger scale, said Robert Guell, an economics professor at Indiana State University. Companies that supply materials to giant e-retailers elsewhere could provide jobs here.

For example, a local plant could make packaging, or even recycle packages — think of all those boxes leftover from Christmas online purchases — for an Amazon-style fulfillment
center in Indianapolis or another metro. Terre Haute’s proximity to Interstate 70 and U.S. 41, railroads and Terre Haute Regional Airport make it a logical location for such businesses. “We have significant logistical advantages that are mostly untapped,” Guell said.

Next month, Guell and Rose-Hulman associate professor of economics Kevin Christ will present the local economic forecast for 2018 at the annual Groundhog Day breakfast Feb. 6 on the ISU campus. They’ll offer predictions for various sectors of the economy here, including retail.

Christ emphasizes that he doesn’t specialize in retail economics, but like most of us has memories of shopping outings as a youngster. He grew up in St. Louis, “and I lament not being able to go downtown and look in the decorated windows of Famous Barr.” That retail store had its headquarters there, since opening in 1911. It became a Macy’s in 2006, and then closed in 2013.

“We have just changed the way we acquire the things we want,” Christ said.

And those changes keep on coming. 

Related Stories:
• Macy's closing store at Honey Creek Mall in Terre Haute in March
• Internet retail a standout in state's growing employment for November 2017
• Terre Haute retailers: This is transformation, not apocalypse

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Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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