For a suburban community with fewer than 30,000 residents, the June opening of the 560,000-square-foot Merrimack Premium Outlets (MPO) with 100 retail stores represented a seismic change in the town. Prior to June, Merrimack had few stores. Residents shopped in neighboring Nashua or Manchester, and Boston is only an hour away. But in 2004, Premium Outlets, a division of Simon Property Group, which also owns several indoor malls in NH, proposed a shopping center that would transform the town into a shopping Mecca.
The large-scale project involved blasting through rock ledges in an underutilized landscape close to exit 10 off the Everett Turnpike. After eight years, despite protests from some residents, permit delays, not to mention an unyielding recession, Premium Outlets prevailed. The running joke used to be you couldn't buy a pair of socks or underwear in Merrimack, says Timothy Thompson, Merrimack's community development director. Now you can.
Whether Merrimack residents view the outlet mall as an oasis of bargains or as meddling with the town's character, they are not likely to complain about its influence on property taxes. With a pre-opening assessment of $50 million, the MPO is one of the biggest factors keeping the town portion of the tax rate level from 2011 to 2012, says Thompson.
The property is perched on a hill, with a can't-miss sign that looms over the turnpike. Once travelers get off the exit, they don't see any signs of civilization until they reach the MPO parking lot, which faces the rear of the stores.
The layout of the outlet stores is based on a racetrack design, where shoppers need to walk inside an oval to shop the stores. Once inside the racetrack, they experience the ambience of a cozy downtown with pedestrian walkways. The management's strategy is to provide a sense of place that consumers won't want to leave-at least not without a shopping bag or two.
The eight-year span between Premium Outlet's proposal and project completion didn't detract from what is now looked upon as a lightning rod for economic growth. That success defies logic-especially with a downbeat economy and the ease of e-commerce-but Americans love driving to stores. Traffic reports from the state's department of transportation confirm the mall's popularity: After the outlets' grand opening, traffic on July weekends passing through the Exit 10 tolls increased between 73 and 116 percent, compared to the previous year's weekends in July.
It's hard to imagine that these brick-and-mortar stores can compete with their online counterparts. However, Linda Humphers, chief editor for Value Retail News, says that 80 percent of the stores within outlet centers sell clothing. And, she says, the apparel market often prevails over click-and-buy purchasing.
Cross Promotion
Thompson, Merrimack's development director, is seeing signs the MPO will tempt complementary businesses to relocate or open in Merrimack. David Roedel, a NH-based hotel operator, says the proximity of the mall was one factor in his company's decision to rouse the former Fairfield Inn in Merrimack out of its four-year dormancy.
After a $4 million renovation, the hotel will reopen as a Holiday Inn Express in Merrimack this fall. Roedel also owns the Hampton Inn & Suites near the Tanger Outlets which attracts tourists and business guests, some of whom manage and train employees in the stores. He anticipates a similar mix at the Merrimack Hotel.
Starbucks and Qdoba Mexican Grill recently received permits to open restaurants on the access road leading to the Merrimack Premium Outlets.
Deb Courtemanche, executive director of the Merrimack Chamber of Commerce, says that area restaurants and hotels have reported an uptick in business on weekends, and are noticing many first-time visitors. The Chamber is stocking a visitor's guide at the MPO information counter to entice visitors to check out what the region has to offer before hopping back on the highway.
Courtemanche says that one of the guide's advertisers, the Annheuser-Busch brewery tour, experienced its busiest summer ever. Anecdotally, she adds that many of the customers are men who've left behind their significant others at the outlet center.
The Common Man, a NH restaurant chain, hosts diners less than a mile from the Merrimack Premium Outlets. General Manager Scott McCann says his lunch business has doubled from a year ago. When I do my table checks, everyone is either going to [the outlets] or coming from, says McCann. Once Black Friday ushers in the holiday shopping season, McCann says, he'll hire more staff and open more rooms.
Tourism Driver
The Merrimack Premium Outlet Center has already become a significant economic driver in Merrimack with the addition of more than 800 full- and part-time jobs, says Christopher Way, interim director of the Division of Economic Development at the Department of Resources and Economic Development (DRED).
He predicts area attractions and lodging properties will strengthen their ties with MPO and collaborate more with the outlet center, a phenomenon he's witnessed with other outlet centers in the state. Settlers' Green in North Conway, a name that pays homage to New England's historic villages, anchors NH's longest-running strip of outlet stores. Outlets fill both sides of Routes 16 and 302 in the White Mountains, and the 24-year-old retail cluster now includes more than 60 stores and restaurants.
Marti Mayne, the public relations manager at the Mt. Washington Valley Chamber of Commerce, says that as Settlers' Green grew in scope, it also helped to attracted smaller, independently owned shops to North Conway Village, such as Zeb's General Store, Asset Jeans, Four Your Paws Only, and Red Jersey Cyclery. Mayne adds that the growth in outlet malls has spurred the lodging industry. It's difficult to know if one fueled the other, says Mayne, but Marriott, Hampton Inn, Comfort Inn, and soon Fairfield Inns have all built hotels nearby. This has almost doubled the bed base in Mt. Washington Valley in the past 15 years.
In the Lakes region, what is now Tanger Outlets in Tilton opened in 1994 as Lakes Region Factory Stores. Tanger began expanding its factory stores in 2003 with an Uno's restaurant, and again in 2007, with a 17,000-square-foot anchor building for the Old Navy outlet. This year it's adding new retailers to the mix with three more clothing stores, each targeting a distinct segment, from tweens and hip skateboarders (Justice, Zumiez) to women who prefer more classic styles (Talbots).
Eric Proulx, Tanger's general manager, says that on average, at least a third of the outlet's traffic and sales come from other states. And some arrive as part of group tours. High-capacity buses unload from Georgia, Texas and California, and more frequently from southern New England, New York and New Jersey to visit NH's tax-free outlets, along with the state's other area attractions.
The latest DRED study, from 2009, shows that for each group tour that stays overnight in NH, an estimated $4,000 to $8,000 remains in the state from spending at hotels, restaurants, services, and stores. That amounts to more than $70 million annually in tourism-related revenue being generated by tourists from outside the state.
According to a survey from the U.S. Department of Commerce, international tourists allocate an average of 29 percent of their traveling expenses for shopping, and contribute an estimated $38.6 billion to the U.S. economy.
Proulx of the Tanger Outlets says that during the winter, he sees busloads of students from Great Britain and Ireland who are on their way to the ski resorts. They descend upon the outlets, hungry for bargains.
Mel Tye of Tye's Tours advertises a variety of shop-and-stay packages, some of which combine stops at the Merrimack outlets with the White Mountains and the seacoast, and plans to add the Lakes Region Casino next spring.. Most recently, he's been courting tourists from Thailand, an overseas market he says is untapped in NH, and also Singapore. Next year, he's adding 10 more coaches to package the casino with the Merrimack Premium Outlets.
The NH Division of Travel and Tourism collaborates with Tye's Tour and other travel agencies to draw out-of-state tourism, and in light of recent direct flights from Boston to Japan, DRED officials are recruiting more Japanese and Asian tour operators.
Tax-Free Advantage
New Hampshire's lack of a sales tax only strengthens the draw of its outlets. It's an advantage that no other New England state has, and attracts visitors from bordering states and Canada.
According to the Retail Merchants Association of NH, the state's tax-free sales status ranks the per capita retail sales as the highest in the nation at $19,268, as compared to the U.S. average of $13,036.
In June, NH's northernmost neighbors in Canada received another incentive to shop here: Canadian visitors to the Granite state who stay for more than 24 hours can bring back up to $200 in goods without paying duties, four times the previous limit of $50. Canadian tourists who stay longer than two days can carry home up to $800's worth, according to the Retail Merchants Association of NH.
Rosemary McCormack, president of the trade association Shop America Alliance, says that among the travel activities in this country, shopping and dining are at the top of the list, according to data from the U.S. Travel Association and the U.S. Department of Commerce. A report from the International Council of Shopping Centers states that 185 outlet centers dot the United States, totaling 70.9 million square feet, with an average $357 in sales per square foot.
It's the one sector [the outlets] that is showing the most resilience against any kind of Internet encroachment, says Humphries of Value Retail News, which is affiliated with the International Council of Shopping Centers. That indicates NH's three outlet centers should continue to be bright spots amid an economic forecast that's often unpredictable.
The 411 on NH's Outlets
Merrimack Premium Outlets in Merrimack
Number of stores: 100
Occupancy rate: 100%
Number of employees: 800
Property taxes paid to town (2011): $1.8 million
Settlers' Green Outlet Village in North Conway
Number of stores: 60+
Occupancy rate: 100%
Number of employees: Up to 1,000
Property taxes paid to town (2011): $750,000
Tanger Outlets in Tilton
Number of stores: 56
Occupancy rate: 100%
Number of employees: Up to 1,000
Property taxes paid to town (2011): $669,776
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