WS-A - WORK STUDY - WELLNESS DISTRICT

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ATTACHMENT KEY FINDING #3 (Level 2 Analysis) A very substantial pool of household effective buying income (EBI)l is available to support a strategy for developing downtown Santa Ana as a wellness district with a distinctive Latino cultural and household living focus. Having established that downtown Santa Ana already exhibits a retail niche function in the Wellness Goods and Food Services category, it is possible to consider targets and scenarios for further increasing the sale of Wellness Goods and Services in downtown Santa Ana. Scenarios for increased sales are based on an analysis of the Effective Buying Income (EBI) and of the household expenditure patterns in each of five studied downtown consumer segments. The characteristics of these segments are summarized in Table 2. TNP's definition of EBI is more conservative than that used in other studies, including by Nielsen and Social Compact, which define EBI as after -tax income. TNP's estimation of EBI is gross household income minus taxes and housing costs, including utilities costs. Having established the median EBI for households in each of the five consumer segments, U.S. Bureau of Labor Statistics Consumer Expenditure Data is then used to determine the allocation of EBI to Wellness Goods and Services by households in each segment. the preparation of a strategy for downtown Santa Ana also requires estimation of the current and possible future geographic distribution of each segment's purchases between downtown Santa Ana business establishments and businesses located in other areas. The TNP scenarios applied standard retail analysis principles about shopping catchment areas. These principles include the following: All things being equal, business establishments secure a higher percentage of purchases from proximate households than from households in more distant places. • Business establishments can secure a higher percentage of purchases from households that have lower travel time to the relevant market area than from households with a greater travel time to the relevant market area. • Business establishments can secure a higher percentage of purchases from households that have fewer proximate retail/commercial areas in which to choose to shop than from households that have a greater number of proximate retail/commercial areas in which to shop. • Business establishments can secure a greater range and higher percentage of purchases from households that spend more time in the relevant market area than from households that spend less time in the market area. The above principles suggest that residents of downtown and central Santa Ana would more reliably allocate a higher percentage of their Wellness purchases to downtown establishments than non - residents and visitors. Non - residents and visitors would allocate a greater percentage of their purchases to commercial areas located near to their homes and/or along their commuting routes. ''Ihe conventional measure of Effective Buying Income (EBI) is after tax household income. For purposes of this study, EBI is calculated as household income net of both of taxes, housing costs, home utilities and heating fuel.'Ihe amount of available EBI estimated in this study is therefore considerably lower and more conservative than typical studies of purchasing power or effective demand. The \,L-\t — ra a WS—A-16 Ana Wellness District: A study of demand and supply for wellness goods and services