AE-09023

ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FORDURANT, OKLAHOMA AND BRYAN COUNTY

Lara Brooks, Extension Assistant, OSU, Stillwater(405) 744-4857

Jack Frye, Area Community Development Specialist, OSU, Ada(580) 332-4100

S. Clay Jones, Agric./4-H & CED, OSU, Durant(580) 924-5312

Dave Shideler, Extension Economist, OSU, Stillwater(405) 744-6170

Cindi Browne, Graduate Assistant, OSU, Stillwater

OKLAHOMA COOPERATIVE EXTENSION SERVICEOKLAHOMA STATE UNIVERSITY

May 2009

Analysis of Retail Trends And Taxable Sales ForDurant and Bryan County, Oklahoma

Lara Brooks Jack Frye Extension Assistant Area Ext. Comm. Dev. SpecialistRoom 526, Ag. Hall PO Box 1378 Oklahoma State University 314 S. Broadway, Suite 101 Stillwater, OK 74078-6026 Ada, OK 74821-1378 lara.brooks@okstate.edu jack.frye@okstate.edu

S. Clay Jones Dave ShidelerExt. Ed. Agric/4-H and CED Extension Economist PO Box 749 Room 323, Ag. HallComm. Bldg., 1901 S 9th Oklahoma State UniversityDurant, OK 74702-0749 Stillwater, OK 74078-6026clay.jones@okstate.edu dave.shideler@okstate.edu

Cindi BrowneGraduate Assistant506 Ag HallOklahoma State UniversityStillwater, OK 74078

"Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national origin, sex, age, religion, disability, or status as a veteran in any of its policies, practices or procedures. This includes but is not limited to admissions, employment financial aid, and educational services."

"Readers may make verbatim copies of this document for non-commercial purposes by any means."

EXECUTIVE SUMMARY

This report analyzes retail trends for Durant and Bryan County, Oklahoma using retail

sales tax data from the Oklahoma Tax Commission. Historic trends show consistent growth in

retail sales in Durant, even when adjusted for inflation. Durant has also seen population growth

since 2000. During this period, Durant’s trade area capture reached a maximum of 30,952 in

2007. Durant’s pull factor peaked in 2004 at 2.067, and it was 1.858 in 2008. We discuss the

causes of these trends in the following report, as well as present comparisons of Durant’s pull

factors to benchmark values.

We also report on the sales gap coefficients for eight retail sectors, as defined at the 2-

digit SIC level. Sales gap coefficients are similar to pull factors, but they apply to specific retail

sectors. General Merchandise has the highest sales gap coefficient for Durant, at a level of 3.055

in 2008. The next highest sales gap coefficient was in Building, Gardening and Merchandise;

Durant attracted a number of consumers that was nearly 2.3 times its population. Eating and

Drinking Places also realized a sales gap coefficient over 2 in 2008. All other retail sectors in

Durant had sales gap coefficients greater than one, suggesting that they drew customers from

outside of Durant.

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ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FORDURANT, OKLAHOMA AND BRYAN COUNTY

INTRODUCTION

Oklahoma communities have been concerned with all aspects of economic development

for the past several years. Creating new jobs and additional income is of concern to rural

communities and urban areas alike. Often, wholesale, retail and most services are viewed as

"local" sectors that dependent on the "basic" sectors such as oil, manufacturing, and agriculture.

Basic sectors produce goods and services exported outside the local or regional economy; these

sectors are the foundation of a local economy. Local sectors provide the goods and services that

sustain the local population, so they tend to circulate dollars already in the community rather

than attract "new" dollars from outside. The local sectors are important, though, as these

activities reflect the general health of a local economy. Sales in the local sectors also produce

sales tax dollars that support municipal service provision. For these reasons, it is important to

understand the local sectors of a community’s economy.

It is not possible to stop all out-of-town spending, or sales leakage, for a local economy,

despite "shop at home" campaigns and other efforts to keep consumption local. However,

opportunities for improvement do frequently exist. The analysis that follows can be used to

identify key areas for improvement and emerging trade centers. At the request of local leaders in

Durant, this report addresses the following objectives:

1. Analyze trends in the county and area utilizing taxable sales data.

2. Estimate the trade area capture and market attraction.

3. Estimate the market attraction by SIC code.

3

METHODOLOGY AND DATA SOURCES

Trade area analysis is frequently used to measure the relative size of the local retail

market. Retail sales in Durant are compared to per capita retail sales in Oklahoma, adjusted for

income. The ratio of local per capita income to state per capita income is used as the income

adjustment, to reflect the fact that communities with significantly lower (higher) per capita

income than the state per capita income will have lower (higher) per capita retail sales.

Mathematically, the trade area capture equation is given as:

Where:TACc=Trade Area Capture by city,RSS

PS= Per capita retail sales in Oklahoma,

and PCI C

PCI S = the income adjustment factor described above.

Trade area capture figures incorporate both income and expenditure factors, which may

be influencing total trade trends. An underlying assumption of the trade area capture estimate is

that local tastes and preferences are similar to that of the state as a whole. If a trade area capture

estimate is larger than city population then two explanations are possible: 1) the city is attracting

customers outside its boundaries or 2) residents of the city are spending more than the state

average.

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TACC=RSC

RSS

PS

PCIC

PCI S

Building on this idea of trade area capture, one can estimate the amount of total local

sales by consumers outside of the market using pull factors. The pull factor is a ratio of the trade

area capture figure to city population,

PFC = TACC

PC , where:

PFc=City Pull Factor, andPc=City Population.

A pull factor of 1.0 means the city is serving a number of customers equal to its population. A

pull factor of 1.50 means the city is drawing non-local customers into the city to shop equal to 50

percent of the city population. A pull factor of less than one means the city is not capturing the

shoppers within its boundaries, or they are spending relatively less than the state average; this is

considered leakage of local sales or a sales gap. Additional discussion of trade area capture and

pull factors can be found in the references cited in this report (Barta and Woods; Harris; Stone

and McConnon; Hustedde, Shatter, and Pulver). The Oklahoma Cooperative Extension Service

has been conducting pull factor/gap analysis and sales tax analysis since 1991 (Woods, 1991).

City pull factors and trade area capture figures are calculated for fiscal years 1980

through 2007. Sales tax returns, as reported by the Oklahoma Tax Commission, were used to

compute measures of total taxable sales. Total taxable sales will serve as a proxy for total sales

in a community. Population data were obtained from the Oklahoma Department of Commerce

and were consistent with figures from the 1980, 1990, and 2000 Census. Income figures were

taken from Bureau of Economic Analysis estimates for counties. Similar income data for cities

were not available, so county income was used as a proxy.

The analysis can be further extended by examining specific local sectors. A sales gap

analysis refers to a pull factor study that has been analyzed by SIC code. The Oklahoma Tax

5

Commission provides tax collection data for 8 retail trade sectors. Sales gap coefficients may be

interpreted in exactly the same manner as are pull factors.1

1 Readers should note that BEA continually updates its estimates. Sometimes they update the entire series back to 1969, and other times they only revise a couple years. These updates affect the values for trade area capture and pull factors. Because of this, trade area capture and pull factor values in this report will differ slightly from values previously published in older versions, if applicable.

6

TAXABLE SALES ANALYSIS

Sales tax returns as reported by the Oklahoma Tax Commission for Durant are listed in

Table 1 for the fiscal years 1980 to 2008. Sales tax returns are important to a city because they

reflect the general health of a local economy and also represent significant revenue for the city

budget. In FY 2008, Durant collected over $10.6 million in sales tax at a tax rate of 3.75%.

This translates into more than $282 million in retail sales. This is an increase from 2007 when

Durant collected a total of $10.1 million sales tax collections, meaning about $270.6 million in

retail sales. Sales are estimated from the sales tax returns and the sales tax rate that is reported.

Figure 1 plots estimated taxable sales in both actual dollars and inflation-adjusted dollars. The

Consumer Price Index is used to adjust for inflation. When taxable sales have been adjusted for

inflation, Figure 1 shows that “real” sales have generally remained constant. Since 2001, “real”

sales have slightly increased

Table 2 lists trade area capture figures for Durant from 1980 to 2008. Durant

experienced an increase in their trade area capture in 2003 to 28,383. Since then, Durant has

experienced a couple other increases to keep the trade area capture around 30,000. Durant’s

trade area capture for 2008 is 30,025. This means that in 2008 Durant “captured” the retail sales

of 30,025 persons. Figure 2 presents a graphic of these same trade area capture figures.

Table 3 lists pull factors for Durant for the years 1980 to 2008. The pull factor for

Durant ranges from 1.592 to 2.067. Durant’s pull factor is currently about 1.858. The

interpretation is that Durant is capturing a number of shoppers that is equal to 1.858 times its

own population. This doesn’t necessarily mean that Durant residents never shop elsewhere, but

it does imply that any retail leakage is more than offset by the attraction of non-local shoppers to

the Durant economy.

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One will note from Figure 3 that the pull factor in Durant has declined since 2004.

Several factors may have contributed to this decline. First, recall that the pull factor is computed

using the trade area capture, which is the estimated number of persons who shop in Durant and is

calculated by dividing retail sales in Durant by the income-weighted average retail sales per

person statewide. If trade area capture declines, as it did between 2004 and 2005 and again

between 2007 and 2008, this would cause a decline in pull factor (holding all other factors

constant). Factors that cause trade area capture to decline include: retail sales per capita in

Oklahoma grow more quickly than Durant retail sales, or Durant per capita income level rises

relative to the state per capita income. In fact, the ratio of per capita income in Durant to that in

Oklahoma did rise between 2006 and 2007 (the latest data available on per capita income).

Rising income is a good thing for residents of Durant, so one should not misinterpret the decline

in trade area capture. Instead of viewing the decline in trade area capture as a reduction in

market size, it should be interpreted as higher local income means a smaller draw of out-of-town

consumers is needed to support local businesses. Population growth can also affect a city’s pull

factor. In fact, Durant’s population grew faster than that of Oklahoma, and faster than its trade

area capture. Putting all of this together, Durant experienced population growth and a rise

income since 2004, but its retail sales did not grow proportionately. It might be the case that the

additional retail sales that one expects from higher income and population growth may have

leaked outside Durant. This is a likely scenario given the competition Durant retailers face from

retailers in Denison and Sherman, TX, which are only 20-30 minutes away.

Table 3 also shows pull factors for cities and towns in Bryan County with a reported sales

tax. Figure 3 plots these pull factors. Durant posts the largest pull factor in the county.

Moreover, one would also consider Durant the center of trade for Bryan County. The remaining

towns all have pull factors below 1.0. Caddo, Calera, Colbert and Mead all post pull factors

8

above 0.5; Caddo, Calera and Colbert all experienced an increase in their pull factor in 2008.

Mead’s pull factor declined in 2008 from 1.178 to 0.731. Caddo’s current pull factor is 0.506.

Calera increased from 0.479 in 2007 to 0.501 in 2008. Colbert’s pull factor is currently 0.563.

Bennington and Bokchito both have pull factors above 0.4, but less than 0.5. Achille and

Kenefic post the lowest pull factors for Bryan County at 0.236 and 0.041, respectively, for FY

2008.

Figure 4 plots Durant’s pull factor compared to other cities with population 10,000-

25,000; this size class is typically one of the highest average pull factors. Durant posts pull

factors that are significantly higher than average for other cities of similar size. Figure 5 plots

Durant’s pull factors relative to a group of peer communities in southeastern Oklahoma. Of the

four communities for which pull factors are plotted, only McAlester had increasing pull factors

since 2004. Over this period, McAlester had low population growth (generally at or below the

population growth of Oklahoma) and it had rapid growth in retail sales (exceeding the growth in

retail sales for Oklahoma). These trends were reinforced by a decline in relative per capita over

much of this period, so that McAlester’s pull factor increased. Additionally, McAlester’s

isolated location could help retain residents’ retail spending. Despite a decline in relative per

capita income which would increase trade area capture, Ada’s pull factors have declined due to

retail sales growth that lagged the state and increasing population. Ardmore also faced declining

pull factors over the period 2004 to 2008. Like Durant, Ardmore experienced rising relative

income and retail sales growth that was slower than the state. These factors outweigh the slow

population growth Ardmore experienced over this period to cause pull factors to decline. One

explanation of the slower retail sales growth could be the competition Ardmore retailers face

from retailers in Gainesville, TX, which is home to an outlet mall and is 40 minutes from

Ardmore.

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Table 1Tax Returns, Durant, Oklahoma, FY 1980-2008

10

Year Collections Tax Rate Taxable Sales

1980 $1,860,563.72 3.00% $62,018,790.671981 $2,053,148.74 3.00% $68,438,291.331982 $2,277,574.40 3.00% $75,919,146.671983 $2,434,809.00 3.00% $81,160,300.001984 $2,669,454.19 3.00% $88,981,806.331985 $2,783,948.57 3.00% $92,798,285.671986 $2,798,268.00 3.00% $93,275,600.001987 $3,002,248.85 3.00% $100,074,961.671988 $2,996,504.26 3.00% $99,883,475.331989 $3,041,163.71 3.00% $101,372,123.671990 $3,290,625.62 3.00% $109,687,520.671991 $3,564,806.49 3.00% $118,826,883.001992 $3,699,426.06 3.00% $123,314,202.001993 $3,802,972.30 3.00% $126,765,743.331994 $3,950,399.74 3.00% $131,679,991.331995 $4,058,680.94 3.00% $135,289,364.671996 $4,257,782.19 3.00% $141,926,073.001997 $4,432,148.45 3.00% $147,738,281.671998 $4,535,508.27 3.00% $151,183,609.001999 $4,831,662.77 3.00% $161,055,425.672000 $5,074,698.38 3.00% $169,156,612.672001 $5,329,163.38 3.00% $177,638,779.332002 $5,397,132.51 3.00% $179,904,417.002003 $6,120,370.83 3.00% $204,012,361.00

*2004(8) $4,619,198.93 3.00% $153,973,297.67*2004(4) $2,493,379.37 3.25% $76,719,365.23*2005(5) $3,105,432.79 3.25% $95,551,778.15*2005(7) $5,055,381.15 3.75% $134,810,164.00

2006 $9,358,717.49 3.75% $249,565,799.732007 $10,149,311.95 3.75% $270,648,318.672008 $10,606,568.41 3.75% $282,841,824.27

(*) Data are for * months of the year.

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

$0.00

$50,000,000.00

$100,000,000.00

$150,000,000.00

$200,000,000.00

$250,000,000.00

$300,000,000.00

Figure 1. Estimated Retail Sales for Durant, OK, FY 1980-2008: Actual and Inflation-Adjusted

Actual Inflation-Adjusted

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Table 2Trade Area Capture Durant, OK, in Bryan County

1980-2008

Year Trade Area Capture

Population

1980 20,963 11,9721981 19,541 12,2501982 20,961 12,6501983 20,856 13,1001984 21,659 13,3001985 22,455 13,4501986 23,324 13,8001987 25,622 13,6001988 24,128 13,3501989 23,743 13,5001990 24,379 13,1101991 25,259 13,0051992 25,308 12,9901993 25,406 13,0931994 24,468 12,9881995 24,079 13,0501996 23,819 12,9661997 24,281 13,0511998 24,172 13,0441999 24,324 12,9922000 24,614 14,1712001 24,097 14,1052002 24,549 14,1752003 28,383 14,3712004 30,126 14,5752005 29,137 14,6912006 29,886 15,4172007 30,952 16,1612008† 30,025 16,161

† Values for 2008 should be considered preliminary since they rely on 2007 BEA data.

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1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Figure 2. Trade Area Capture for Durant, OK, FY 1980-2008

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Table 3Pull Factors for Cities and Towns in Bryan County, FY 1980-2008

Year Achille Bennington Bokchito Caddo Calera Colbert Durant Kenefic Mead1980 -- 0.403 0.975 0.644 0.260 0.592 1.751 -- 0.0351981 -- 0.306 0.809 0.539 0.245 0.511 1.595 -- 0.1271982 -- 0.337 0.712 0.537 0.233 0.516 1.657 -- 0.1231983 -- 0.311 0.530 0.530 0.253 0.544 1.592 -- 0.1371984 -- 0.285 0.515 0.526 0.351 0.573 1.629 -- 0.1721985 -- 0.380 0.738 0.568 0.302 0.519 1.670 -- 0.3521986 0.293 0.510 0.769 0.516 0.394 0.629 1.690 -- 0.2761987 0.402 0.593 0.796 0.521 0.357 0.621 1.884 -- 0.2511988 0.414 0.667 0.642 0.501 0.365 0.551 1.807 -- 0.2121989 0.448 0.694 0.631 0.525 0.337 0.590 1.759 -- 0.2551990 0.401 0.814 0.670 0.462 0.324 0.651 1.860 0.064 0.3541991 0.422 0.794 0.760 0.392 0.362 0.760 1.942 0.119 0.3051992 0.416 0.740 0.773 0.374 0.384 0.727 1.948 0.055 0.3681993 0.319 0.613 0.877 0.382 0.398 0.656 1.940 0.083 0.4351994 0.321 0.631 0.741 0.393 0.392 0.659 1.884 0.096 0.4441995 0.320 0.614 0.678 0.426 0.425 0.633 1.845 0.149 0.6121996 0.326 0.649 0.751 0.440 0.432 0.615 1.837 0.158 0.6141997 0.368 0.618 0.778 0.429 0.478 0.895 1.861 0.182 0.6661998 0.329 0.592 0.811 0.422 0.483 0.701 1.853 0.137 0.7721999 0.358 0.518 0.730 0.396 0.453 0.708 1.872 0.138 0.8072000 0.354 0.516 0.800 0.428 0.455 0.835 1.737 0.080 0.7372001 0.364 0.558 0.694 0.480 0.346 0.621 1.708 0.108 0.8502002 0.335 0.544 0.630 0.489 0.364 0.642 1.732 0.078 0.7152003 0.354 0.584 0.633 0.659 0.276 0.705 1.975 0.054 0.6492004 0.302 0.567 0.652 0.420 0.372 0.624 2.067 0.028 0.7052005 0.272 0.530 0.628 0.417 0.405 0.667 1.983 0.054 0.9182006 0.254 0.507 0.483 0.427 0.437 0.509 1.939 0.034 1.2812007 0.279 0.507 0.474 0.435 0.479 0.533 1.915 0.028 1.1782008 0.236 0.475 0.451 0.506 0.501 0.563 1.858 0.041 0.731

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1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

0.000

0.500

1.000

1.500

2.000

2.500

Figure 3. Pull Factors for Cities and Towns in Bryan County, FY 1980-2008

Durant Achille Bennington Bokchito Caddo Calera Colbert

19801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008

0.000

0.500

1.000

1.500

2.000

2.500

Figure 5. Pull Factors for Durant, McAlester, Ada and Ardmore, OK, 1980 - 2008

Durant McAlester Ada Ardmore

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SALES GAP ANALYSIS FOR DURANT, OK

For purposes of this study, a sales gap analysis refers to a pull factor study that has been analyzed

by SIC code for the 8 retail sectors 52 through 59. Sales gap coefficients may be interpreted in exactly

the same manner as are pull factors. Gap coefficients and trade area capture values will also vary from

previous years due to updated BEA and Census data. See Table 4 for Durant’s sales gap analysis.

Table 5 provides a detailed description of the 8 retail SIC categories.

For Durant’s Building Materials, Hardware and Gardening Supplies (SIC 52), the number of

shoppers has increased significantly since 2005. In FY 2008, Durant saw a record of 37,025 shoppers

(See top half of Table 4). Durant's population is about 16,161; thus, in 2008, this sector was capturing a

number of shoppers that was about 2.291 times the local population. The significant jump in pull factor

between 2005 and 2006 is the result of an opening of a Lowe’s Home Improvement Warehouse. Its

continued increase is likely related to continued growth in sales at the Lowe’s store.

The category of General Merchandise (SIC 53) tends to be dominated by Wal-Mart. Wal-Mart

reports all its sales under this category (even though it sells clothing, grocery items, etc. as well). In

general, towns that have a Wal-Mart will post sales gap coefficients that are greater than 1.0 for this

category, and those that do not have a Wal-Mart will post sales gap coefficients that are less than 1.0.

Durant does have a Wal-Mart Supercenter. Thus, Durant experienced its greatest number of shoppers in

this category in 2006 with a recorded number of 55,296. This is about 3.674 times the local population.

In 2008, Durant captured 49,364 shoppers. Though the sales gap coefficient for this category has

declined to 3.055 in 2008, it remains the most attractive sector in Durant. The decline likely stems from

the fact that Durant’s general merchandise sector grew more slowly than it did for the state; also,

population grew faster than did retail sales in this sector over this period.

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Grocery stores in Durant had a gap coefficient of 1.151 in 2008. Consumers tend to appreciate the

convenience of shopping for groceries close to home; consequently, it is typical to find that even very

small towns post high gap coefficients (over 1.0) for this sector. This is an increase from 2007 when

Durant posted a gap coefficient of 1.127. The general trend from 2003 to 2006 was a decreasing gap

coefficient for grocery stores in Durant; however, the general merchandise category continued to

increase during this time. One explanation of the decline in gap coefficient since 2003 could be due to

grocery sales at Wal-Mart, which would be classified in sector 53.

SIC category 55 is difficult to interpret because motor vehicle and gasoline sales are exempt from

municipal sales tax in Oklahoma. Most of the sales tax collection reported under this category appears

to stem from auto parts stores and other retail sales from gas stations. For instance, most gas stations

sell snack items, tires, some auto parts, oil, anti-freeze, etc. Sales tax collections for Durant in this

category indicate that these types of businesses attracted a number of shoppers equal to about 1.45 times

the local population. This number has decreased since 2004. Like previous sectors, retail sales in

Durant’s automotive dealers and gas stations sector have not increased as quickly as they did across the

state, which will drive the gap coefficient down.

Apparel sales are reported under SIC 56. It is very difficult for small to medium sized towns to

post high sales coefficients in the category of apparel. Many small towns have nearly zero sales in this

category, and it is common to see sales gap coefficients that are less than 0.10 in these towns. Cities

with large malls tend to be the most successful at capturing the market. Durant does exceptionally well

with apparel sales considering their size. Durant’s apparel stores captured a total of 27,921 shoppers in

FY 2008for a gap coefficient of 1.728. This number peaked in 2006 and has experienced a decrease

over the past couple years. Two explanations could be offered for this slight decline since 2006. One

could be a ‘Wal-Mart’ effect, in which sales at Wal-Mart have replaced sales at other apparel stores in

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Durant so that the retail sales reported in this category would decline. Second, Durant residents may be

shopping at the new mall in Sherman, TX – only 20 minutes away.

SIC 57 reports Furniture and Home Furnishings. Also included are appliance and electronics

stores, drapery and floor covering stores, and music stores. This category is often viewed from the

perspective that many furniture purchases are made in either Tulsa or Oklahoma City. Oklahoma City,

for example, has a large cluster of retail furniture stores centralized in one geographic area. With a gap

coefficient of 1.209, Durant residents seem to purchase a large amount of furniture in their local

community. This sector has been quite stable since 2004, despite sales growing more rapidly than the

state. The rapid population growth in Durant likely offsets the growth in sales to keep the pull factor

nearly constant.

Eating and Drinking Places, SIC 58, is one of the most straightforward retail sectors. It contains

restaurants and bars. Restaurants and bars in Durant captured 32,824 customers in FY 2008.

Restaurants in Durant tend to attract a number of shoppers that is equal to about 2.031 times the town’s

population. This is another remarkably stable sector for Durant, despite having retail sales grow faster

than those of the state. Again, the fact that Durant’s population grew much faster than Oklahoma could

be offsetting the retail sales growth.

SIC 59, or Miscellaneous Retail, contains a host of retail activity, including pharmacies, florists,

liquor stores, and antique stores. These are often the downtown or “Main Street” merchants. In 2008,

Durant attracted 19,892 shoppers in this category for a strong gap coefficient of 1.231. Growth in the

pull factor since 2006 results from faster sales growth in Durant compared to Oklahoma as a whole;

retail sales growth more than offset the population growth experience during this time.

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Table 4Retail Sales Gap Analysis by Standard Industrial

Classification (SIC) Code for Durant, OK: Fiscal Years 2003-2008*

TRADE AREA CAPTUREFY

2003FY

2004FY

2005FY

2006FY

2007FY

2008Building, Gardening & Merchandise (52) 15,708 17,595 13,758 24,828 34,756 37,025General Merchandise (53) 44,394 50,485 52,186 55,296 53,015 49,364Food Stores (54) 28,768 20,466 15,858 19,007 18,219 18,601Automobile Dealers & Gas Stations (55) 25,321 27,978 24,259 24,169 24,995 23,440Apparel & Accessory Stores (56) 22,981 25,249 31,355 33,608 31,502 27,921Furniture & Home Furnishings (57) 20,320 17,932 16,235 19,227 19,643 19,537Eating & Drinking Places (58) 29,163 27,994 29,450 30,369 31,924 32,824Miscellaneous Retail (59) 18,835 18,674 19,724 15,610 18,882 19,892

SALES GAP COEFFICIENT †FY

2003FY

2004FY

2005FY

2006FY

2007FY

2008Building, Gardening & Merchandise (52) 1.085 1.199 0.935 1.650 2.151 2.291General Merchandise (53) 3.067 3.441 3.548 3.674 3.280 3.055Food Stores (54) 1.987 1.395 1.078 1.263 1.127 1.151Automobile Dealers & Gas Stations (55) 1.749 1.907 1.649 1.606 1.547 1.450Apparel & Accessory Stores (56) 1.587 1.721 2.132 2.233 1.949 1.728Furniture & Home Furnishings (57) 1.404 1.222 1.104 1.278 1.215 1.209Eating & Drinking Places (58) 2.014 1.908 2.002 2.018 1.975 2.031Miscellaneous Retail (59) 1.301 1.273 1.341 1.037 1.168 1.231

* Trade area capture and gap coefficients can vary from previous years due to updated BEA and Census data available.

† For purposes of this paper, when analyzed by SIC code, the pull factor is referred to as the sales gap coefficient.

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TABLE 5TYPES OF BUSINESSES

DESCRIBED BY THE RETAIL SIC CODES

52 Building Materials 58 Eating and Drinking PlacesLumber yards including home centersPaint and wallpaper storesGlass stores 59 Miscellaneous RetailHardware stores Drug and proprietary storesRetail Nurseries Liquor StoresLawn and garden supply stores Used merchandise stores including antiqueMobile Home dealers stores and pawn shops

Sporting goods stores53 General Merchandise Stores Book stores

Variety stores Stationary storesDepartment stores Jewelry storesWarehouse clubs Hobby, toy, and game shopsGeneral combination merchandise stores Camera and photographic supplies stores

Gifts, novelties and souvenirs54 Food Stores Luggage and leather goods stores

Grocery stores (Supermarkets) Sewing, needlework, and piece goods storesConvenience stores both with and without gasoline Catalog and mail order sales (includes e-Meat and fish markets commerce stores)Fruit and vegetable markets Vending machine operators and direct sellingCandy, nut and confectionery stores establishmentsDairy stores Fuel oil dealersRetail Bakeries Bottled gas dealers

Florists55 Automotive Dealers and Gasoline Service Stations Tobacco Stores

Motor vehicle dealers (new and used) NewsstandsTire stores Optical goods storesAuto supply stores Cosmetic storesGasoline stations Pet and pet supply storesBoat dealers Hearing aid and artificial limb storesRV dealers Art dealersMotorcycle dealers Telephone and typewriter stores

56 Apparel and Accessory StoresMen and boys apparelWomen’s apparel and accessoriesChildren and infant’s wearFamily apparelShoe storesCustom tailor and seamstresses

57 Furniture and Home Furnishings StoresFurniture storesFloor covering storesDrapery, curtains and upholstery storesPottery and crafts made and sold on siteHousehold appliance storesRadio and TV and consumer electronics storesComputer and computer software storesRecord and prerecorded tapes storesMusical instruments stores

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.

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BUSINESS DEVELOPMENT STRATEGIES

Retail trade trends reflect the overall health of a local economy. All out shopping or sales

leakage cannot be stopped. Often, larger economic trends (State-National-Global) overwhelm

retail opportunities. There are programs and actions that can assist retail trade activities,

however.

Concerned leaders and business persons can focus on business development by forming a

business assistance committee to begin implementing some of the assistance activities or

working with the existing chamber of commerce. The following activities were in part of a retail

trade improvement program. These activities can improve the climate for business and show the

community's commitment to support local business.

1. Analyze the local business sector to identify needs and opportunities to be pursued by the

program. Businesses often do not have the resources to study the economy (local, regional,

and national) and how they fit in. They need practical data and analysis that will help in

their individual business decision-making. In particular, economic analysis can identify

voids in the local or regional market that can possibly be filled by expanding or new

business. Examples of analysis include the pull factor analysis reported here and consumer

surveys to identify needs and opportunities.

In addition to economic analysis, information is needed on the needs or problems of

individual businesses and of the business district as a whole. As needs are identified, action

can be taken to improve the situation. For example, a business may need help in preparing a

business plan to qualify for financing. Perhaps the appearance of buildings and vacant lots

is detrimental to attracting people to be business district, or perhaps poorly coordinated store

hours are a hindrance. Once these needs are identified, a business development program can

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initiate action. A periodic survey of local business needs can form the basis of a business

development program's work plan.

2. Provide management assistance and counseling to improve the efficiency and profitability of

local businesses. Many local businesses are owner-operated, earn low profits, and have

difficulty in obtaining financing. Businessmen often need additional education and training

in improving business management skills like accounting, finance, planning, marketing,

customer, relations, merchandising, personnel management, or tax procedures. This

assistance and counseling can be provided through seminars and one-to-one aid. Sources of

assistance include the Service Corps of Retired Executives (SCORE), Small Business

Development Center program sponsored by the Small Business Administration,

Universities, Technology Centers, Oklahoma Department of Commerce, and the

Cooperative Extension Service. The intent is to aid small businesses in becoming more

competitive.

3. Assist new business start-up and entrepreneurial activity by analyzing potential markets and

local skills and matching entrepreneurs with technical and financial resources. Establishing

a business incubator is another way to assist new businesses. An incubator is a building

with shed space or service requirements that reduce start-up costs for new businesses.

Incubators have been successful in many locations but are not the right answer for every

town. A successful incubator must have long-range planning, specific goals, and good

management in order to identify markets and entrepreneurs.

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4. Promote the development of home-based enterprises. Home-based work by individuals is

increasing because of the flexibility offered and because in some areas, it may be the most

realistic alternative. Home-based enterprises can include a great variety of full or part-time

occupations such as food processing, quilting, weaving, crafts, clothing assembly, mail order

processing, or assembling various goods.

5. Provide assistance in identifying and obtaining financing. Small businesses often have

difficulty obtaining long-term bank financing for expansion because they lack assets to

mortgage, cannot obtain affordable terms or rates, or cannot present a strong business plan.

A business development program can identify public loan programs and package them with

private loans to make projects feasible.

6. Provide assistance in undertaking joint projects such as:

improved appearance

improved management of the commercial area

building renovation

preparation of design standards

joint promotions and marketing

organizing independent merchants

special activities and events

fund raising

improved customer relations

uniform hours of operation

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Undertaking these projects requires cooperation, good organization, and efficient

management. These projects can improve a business district's competitive position and

attract new customers. The Oklahoma Main Street Program provides many good examples

of towns working together for economic revitalization. The Main Street Program developed

by the National Trust for Historic Preservation, is build around the four points of

organization, design, promotion, and economic restructuring.

7. Develop a one-stop permit center. There is great deal of red tape involved in starting a

business including registering a name, choosing a legal form, and determining what licenses,

permits, or bonds are needed. Other concerns include internal revenue service requirements,

unemployment insurance, sales tax permits, and state withholding taxes. Having this type of

information available in one location will make life easier for potential businesses.

8. Involve active organizations and the media. Groups such as the chamber of commerce, civic

clubs, etc. can encourage a healthy business climate. The local media can also support small

business and aid in developing awareness of the importance of local business.

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SUMMARY

This report has analyzed taxable sales trends for the City of Durant and Bryan County. The level

of taxable sales in Durant has certainly grown in nominal terms since 1980, but has also grown in real

(inflation-adjusted) terms since 1987. It is easily the center of trade for the county, having a pull factor

of 1.858 in 2008. Durant has a Wal-Mart Supercenter and a Lowe’s Home Improvement Warehouse,

both of which help to draw consumers into a community. Sectors 52 and 53 have the highest sales gap

coefficients for Durant, largely due to the presence of these stores. Eating and Drinking Places, Sector

58, also has a high sales gap coefficient.

Durant has seen its pull factor and several sales gap coefficients decline in recent years. The

main cause of this has been a failure of retail sales to grow as quickly as per capita income and

population in Durant. Some of the new income and population could be leaking out of Durant and

Bryan County and going to Sherman, TX, which is only 20 minutes away and is home to a new mall.

This competition of retail between Durant and Denison could also explain why Durant realizes lower

pull factors than Ada and McAlester, which are relatively more isolated from alternative places to shop

than Durant. Ardmore, another peer city of Durant, faces similar competition from Gainesville, TX.

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REFERENCES

Barta, S.D. and M.D. Woods. Gap Analysis as a Tool for Community Economic Development.WF 917, Oklahoma Cooperative Extension Service, Oklahoma State University, <http://agweb.okstate.edu/pearl/agecon/resource/wf-917.pdf>, 2000.

Harris, Thomas R. "Commercial Sector Development in Rural Communities: Trade Area Analysis." Hard Times: Communities in Transition. Western Rural Development Center, WREP 90, September 1985.

Hustedde, R., R. Shatter, and G. Pulver, Community Economic Analysis: A How To Manual. Ames, Iowa. North Central Regional Center for Rural Development, 1984.

Oklahoma Department of Commerce, Research and Planning Division. Population Estimates for State, Counties, and Cities, Oklahoma: April 1, 1980-July 1, 1989. December 1990.

Oklahoma Tax Commission City Sales Tax Collections Returned to Cities and Towns in Fiscal, 1980 to 2008. (Fiscal Year End-June 30)

Stone, K. and J.C. McConnon, Jr. "Trade Area Analysis Extension Program: A Catalyst for Community Development," Proceedings of Realizing Your Potential as an Agricultural Economist in Extension. Ithaca, New York, August 1984.

Tennessee Valley Authority. "Focus on the Future," Workbook provided at RedArk Development Authority Symposium on Economic Development Leadership, Shawnee, Oklahoma, June 1986.

U.S. Department of Commerce Bureau of The Census. Resident Population by County, 1990 to 2005. http://www.census.gov/populations/extimates/county/ (July 2008)

U.S. Department of Commerce, Bureau of Economic Analysis. "Personal Income by Major Source and Earnings by Major Industry," Regional Economic Information System, 1980 to 2007.

Woods, Mike D. Retail Sales Analysis in Oklahoma By County, 1977, 1982, 1987. Bulletin B-801, Agricultural Experiment Station, Oklahoma State University, October 1991.

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