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Rio South Texas Retail Snapshot
Rio South Texas is a four-county region at the southernmost tip of Texas bordering Mexico and hugging the Gulf of Mexico. Retail sales in the region have rebounded well since 2009 and continue to rise, showing the strength of the local economy:
According to the Texas State Comptroller's office, combined gross retail sales for the region for 2011 were almost $13 billion, well above pre-recession levels. For graphical purposes, the State's numbers are plotted on the secondary axis, showing a similar pattern of growth to that of our region.
Updated: July 17, 2012
The Rio Grande Valley, now doing business as Rio South Texas, offers many choices for retailers. Rio South Texas includes the counties of Hidalgo, Cameron, Starr & Willacy and cities such as Alamo, Edinburg, Harlingen, McAllen, Mercedes, Mission, Port Isabel, San Benito, San Juan, and South Padre Island.
Figure 1 illustrates the retail trends on the US side of Rio South Texas within these two MSA’s. Looking closely at this retail sales data, it is important to note that sales in 2010 were essentially the same as 2006. Considering the global and national economic challenges of the past several years, this is a very good sign for the region.
Figure 1-MSA Retail Sales (in Billions)
Harlingen, Texas will soon be home to the Bass Pro Shops’ 57th location. Bass Pro Shop will open in the fall of 2011. The site is part of a large development known as Cameron Crossing shopping center. It is interesting to note that the population within a 60 mile radius of Harlingen is greater than the population within 60 miles of the San Antonio Bass Pro or the Cabelas in Buda, TX. City officials signed a 20-year lease with Bass Pro Shops setting the stage for a large retail shopping center north of the Expressway 77/83 interchange. This development is immediately north of Simon Properties’ Valle Vista Mall which is home to a score of other major retail outlets including Dillard's, Forever 21, JC Penney, Sears, and Big Lots and 70 additional stores, including Victoria's Secret, Aeropostale, Auntie Anne’s Bath & Body Works, Foot Locker, GameStop, General Nutrition Center, New York & Company, Rack Room Shoes, Hot Topic, Express Men, Sam Goody, Kay Jewelers, Charlotte Russe, Hallmark, and Coach. Retail sales in Harlingen have increase 5% since 2006 from $920 million to $970 million per year.
Positive signs for the region continue in 2011 as several big box users return to the market. First Hartford, the Connecticut-based developer behind The Shoppes at Rio Grande Valley has announced plans to build a 90,000-square-foot expansion next to J.C. Penney in Edinburg. Land has been sold to McDonald’s for a restaurant along Trenton Road. An expansion of the center west of J.C. Penney including Anna’s Linens, GNC and Petco will occupy the new space, which should be open for business during 2012. With the expansion, the Shoppes will have 428,000 square feet of retail space. Wal-Mart Super Center, Lowes and a host of other retailers also have locations in Edinburg. Retail sales in Edinburg have increase 31% since 2006 from $612.8 million to $799.8 million annually.
McAllen offers some of the best cultural activities, shopping, dining and recreation in the state. A downtown entertainment districted filled with galleries, restaurants, nightclubs and more. Locals and visitors enjoy the variety of stores that McAllen has to offer. The shopping menu is represented by 40 of America's top 100 retailers and many of those retailers are among the most profitable stores in their chains. While much of the new growth in town is toward the north, McAllen's Palms Crossing, in the Convention Center District, is the newest large shopping and dining area. New national and local restaurants have opened their doors, along with a vibrant collection of retail stores. The Convention Center District, North 10th Street, downtown McAllen, the Las Tiendas shopping area, Trenton and La Plaza Mall are major shopping areas in the city. La Plaza Mall is known to generate more than 18 million visitors annually and remains one of the Simon Properties highest grossing retail malls. As McAllen becomes more culturally diverse, a large number of specialty stores have also appeared. There are Japanese and Filipino groceries, several health food stores offering organic products, and fresh fruit and vegetable stores open seasonally.
The City of Mercedes also caters to a consumer market of over 2.3 million within a 50 mile radius and 10 million within a 200 mile radius. Rio Grande Valley Premium Outlets, a Chelsea development which opened in November 2006, is located there with over 152 stores including Adidas, Ann Taylor, Brooks Brothers, Casual Male XL, Cole Haan, Eddie Bauer, Hugo Boss, Jones of New York, Kenneth Cole, New York New York, OshKosh B'gosh, Polo Ralph Lauren, Rue 21, Saks 5th Avenue off 5th, Skechers, The Children’s Place, and Tommy Helfiger. Retail sales in Mercedes increased 77% from $150.5 million to $266.9 million between 2006 and 2010.
A recent survey of the top emerging restaurant markets in the U.S. conducted by QSR magazine and Pitney Bowes Business Insight ranked the top 40 cities for expansion. The Growth 40 listed the top large, medium, and small markets for expansion in the New Year, finding Buffalo, NY, to be the best large city for restaurants to expand into.
Overall, for small, medium, and large markets, the regions of the northwest, southwest, and northeast were best for restaurant expansion. McAllen, TX, ranked No. 1 and Brownsville No. 2 for medium markets. “What was most interesting,” says QSR’s editor, Blair Chancy, “was when you looked at just competition levels or just population growth, those numbers didn’t tell the whole story. Restaurateurs really need to be in places where there’s a growing, stable population and where the market isn’t already saturated with other brands.”
Recent additions to the growing cluster of restaurants includes Pappadeaux’s, Smash Burger, Five Guy’s Burger and Fries, Cracker Barrel, PF Changs, BJ’s Brewhouse, Mimi’s, Cheddars, Longhorn Steakhouse, Texadelphia, Poncho’s, and Buffalo Wild Wings, just to mention a few. Mexican-owned family restaurants are relocating in the Valley. These include La Mansion del Prado, Arturo’s, La Fogata, and Cabrito El Pastor.
The Texas Comptrollers’ Office reported March 2011 Alcoholic Beverage sales spiked in part to the students and other hard-partying customers coming to the Valley for Spring Break. They dropped more than $818,000 on beer, wine and liquor at Louie’s Backyard during March on South Padre Island. The popular South Padre Island watering hole regularly makes eye-popping sales during the month. Here are the top 10 in Gross Receipts from Alcohol alone in the Valley.
Figure 2 Alcohol Beverage Sales March 2011 Texas Comptroller of Public Accounts