No parking, no business 2: What happens in the store.

On 23 June we asked the following open question to our readers “Has anyone out there ever run across a solid report or study showing that local businesses suffer financially when a zone is pedestrianized or made bike-accessible? Or that real estate prices take a nose dive when such improvements are made? Most of us here are familiar with the other side of this coin, but it occurred to me that this such critical references might be useful to us all, given that these local conflicts and claims come up time and time again in cities around the world.”

There was a very lively response to the question, a number of which are reproduced in the text of the above posting at http://wp.me/psKUY-2eT, and a more extensive set of comments and suggestions  on our Facebook site at http://www.facebook.com/worldstreets (where you will have to search or scroll down to the 23 June section).  One of these which we would like to share with you today was a reasearch report by a young Dutch scholar, Niek Mouter.  You will find the full report at http://www.nvnm.nl/report/. Below we reprint the introductory section along with the author’s final conclusions and proposed suggestions for future research.

Relation between modal split and expenditures in local supermarkets

No parking no business’ might be the most important premise that is used by shop owners and other entrepreneurs in their lobby by the government that more parking space is needed in their neighbourhood.

The CROW (the Dutch national knowledge platform for infrastructure, transport, traffic and public space) and the Erasmus University Rotterdam did some research on the question whether or not the car user is the customer that spends the highest amount of money in a cycling country as the Netherlands.

This thesis explores the relation between modal split and expenditures in the segment of local supermarkets.

Not much research is done in the Netherlands on this area. Some studies are done on topics that are related to the relation between modal split and expenditures. An overview of these studies is described in chapter 2.

Due to the lack of research in this area, this thesis focuses on the gathering of new empirical data. The relation between modal split and expenditures is determined with the help of 618 surveys on customers of the local supermarket.

The conclusion that is drawn out of the surveys is that expenditures in a local supermarket are not significantly explained by the choice of modality. Automobile users do not spend more money per person a week on daily products in a local supermarket compared to for instance cycling customers.

However, this research must be repeated several times on different places to make policy on the outcomes. Moreover it is interesting to do a study on the relation between modal split and expenditures in other segments.

Free copies of the report are available here at http://www.nvnm.nl/report/

Conclusion

The most important conclusion that can be drawn in this thesis is that there is no relation between modal split and expenditures in the segment of local supermarkets. The proposition that customers who reach the supermarket by car spend significantly more money than customers who use another mode of transport can be rejected with the help of the data that has been gathered in this thesis for the segment local supermarkets.

The reason for this misperception of entrepreneurs is that car users spend more on daily groceries each time they visit the supermarket and the largest part of the customers of the supermarket are car users. Both facts can be confirmed by the data collected in case of this thesis.

Car users spend more money by each visit compared to users of other transport modes, but this extra spending is compensated by the fact that users of other transport modes visit the local supermarket more frequently compared to car users. The result is that car users spend approximately the same amount of money on groceries in a local supermarket per person of a household per week compared with cyclists and pedestrians.

As a consequence the conclusion that can be drawn is that it makes sense when a managers of a local supermarket tries to detect for which transport mode parking facilities are restricted. Parking facilities might be restricted either in quantity or in quality.

This might be a better strategy than a one-sided lobby for better car-parking facilities, because customers that reach the local supermarket by foot or by bicycle bring in the same amount of money per person. It is not in the interest of the manager of a local supermarket to lobby for more and better car parking facilities when there is a lack of parking facilities for cyclists and a trip to the local supermarket is a dangerous activity. A manager of a local supermarket must share his attention over the different important modalities that are used by customers to reach the shop.

Nowadays in the Netherlands good parking facilities for cyclists is listed on the second place of the services wishes top 5 of supermarket customers. Approximately 74% of the customers want to have better parking facilities for their bikes (Vogelvrije fietser 2006). An example of a facility for which the effect on a shopping mall could be investigated is a secured parking facility in a shopping mall for free.

The conclusion of this thesis cannot be that the entrepreneur or supermarket manager must neglect the importance of car parking facilities. The benefit of the high loading capacity of a car is already mentioned and the data that is collected shows that car users visit the local supermarket less frequently while on average they buy groceries for larger households.

An interesting study might be a comparison of time that is spend on grocery shopping per week by a household that uses the car for grocery shopping and a household that uses another mode of transport. When a household could save time with buying their groceries by driving to the supermarket with a car instead of using a bicycle, the car could have a competitive advantage in a world were efficiency and time saving are highly important aspects.

The only conclusion that can be drawn out of the data is that entrepreneurs and supermarket managers must not focus on car parking facilities solely. They have to look at parking in a broader sense.

Recommendations for further research

The relationship between modal split and expenditures is insufficiently studied and must be studied in a broader sense to predict implications of policies or support policies. It is only possible to conclude that no relation exists between modal split and expenditures if this relation is studied on other locations and in other segments.

Interesting segments might be drugstores or present shops. Another interesting location might be a supermarket in a busy shopping centre or a local supermarket within a neighbourhood with a higher or lower average income.
What also needs to be studied more comprehensively is the contribution of users of different transport modes on the economic value of a whole shopping mall. It is interesting to determine whether or not the expenditures in the rest of the shopping mall differ between the users of different transport modes.

More ambitious would be a comparison of the effect of different transport modes concerning the economic value for the shopping mall and the ecological effect for the region of the shopping mall. If the economic contribution of every transport mode is approximately equal, the ecological benefits of cyclists and pedestrians might stimulate policy that is more focussed on parking facilities for cyclists.

When this research is repeated for other segments or on other locations it is important to keep in mind the following aspects:

  • The respondents must be questioned about the other supermarkets they visit in the shopping mall and other shops they visit separately.
  • The questions about the number of persons for who the respondent buys products in the supermarket and the amount of money that is spend per week by a household must be coupled more clearly. A suggestion is that the number of persons must be mentioned in the question about the amount of money the household spends per week. For instance, ‘what amount of money do you spend with the two of you on daily groceries on average in one week’?
  • Lots of respondents showed their receipt when they were asked about the amount of money they had spend in the local supermarket. Maybe it is better to write down this exact amount of money instead of selecting a category. For instance, a person who has spent 14,50 euro is not classified in the category 10-15 euros, but the amount 14.50 will be written down on the questionnaire.

Other questions that could be added to the questionnaire if the objective of the research is to investigate the implications of car restricting measures are

  • To respondents that reached the local supermarket by car: what is your reaction when it is not longer possible to park your car near to the local supermarket?
  • To respondents that do not have a car available for the activity grocery shopping: what would be your reaction if you had a car available for this activity?

When the study is repeated, another recommendation will be to start a broad research by the entrepreneurs who own a shop in the shopping mall were the ‘local’ supermarket or other store is located. With this expansion it is possible to compare the perception of the entrepreneurs about for instance the relation between modal split and expenditures with the reality.

As already pointed out, the main conclusion of this thesis is that there is no relation between modal split and expenditures. It is interesting to detect which variables are influencing expenditures per person of a household per week in a local supermarket. Income and life-style are variables that are candidates for having a clarifying impact on both modal split and expenditures in a local supermarket. It would be possible that people with lifestyle A aspire to do as much activities as possible by bike and thus also try to visit the local supermarket by bike. It is also possible that people with the same lifestyle are more interested in biological products and consequently spend more money in a local supermarket. In this example lifestyle influences both modal split and expenditures in a local supermarket.

The data that is gathered in this thesis demonstrates that the number of persons out of which a household consists could be a explanatory variable for the amount of money that is spend per person per week. Figure 35 in paragraph 3.7.7 showed the possible relation between the number of people of a household and the expenditures per person of the household per week that is approximately linear. Figure 27 in paragraph 3.7.2 demonstrated that people that use the car to visit the local supermarket are buying daily groceries for a household that consists out of more people than respondents that use another mode of transport.

It is interesting to investigate if this relation also works the other way around. Is there a relation between the number of people of a household and modal split? Is it true that when a household is expanded with kids the household chooses for another mode of transport for their groceries?

Most important will be an extensive study about the existence or the absence of the relation between modal split and expenditures per person of a household per week in more segments and more locations. The result of this study might be very important for policy implications in the future concerning the parking facilities around supermarkets and shopping malls.

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Again for the full report click to http://www.nvnm.nl/relationship-between-modal-split-and-expenditures-in-local-supermarkets.pdf

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About the author:

Niek Mouter (Leiden the Netherlands, 1984) graduated in Economics and Business at the Erasmus University of Rotterdam in September 2008 and in Philosophy of Law in October 2011 at the University of Leiden. In January 2008 Niek started to do research for the Erasmus University and municipalities as an entrepreneur (NVNM). Nowadays he works as a PhD student at the Technical University of Delft focusing on the improvement of Cost-Benefit analysis for spatial-infrastructural projects.

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