Lebanon and Laclede CountyRetail Sales Analysis

http://www.cpac.missouri.edu/lebanon/

Anna KovalyovaProgram CoordinatorLucy ZakharovaResearch Assistant

University of Missouri, Columbia

Importance of Retail Sales Analysis

Shift from dependence on property to sales taxes

In an evolving world, counties are under pressure to satisfy demand for public goods and services

Increasing sales tax avoidance in the form of catalog and internet sales contributed to decline of the total taxable retail sales in Laclede County

Retail Sales

Merchandise sold for cash or credit at retail and wholesale by establishments primarily engaged in retail trade

Amounts received from customers for layaway purchases

Receipts from rental or leasing of vehicles, equipment, instruments, tools, etc.

Receipts for delivery, installation, maintenance, repair, alteration, storage, and other services

The total value of service contracts

Gasoline, liquor, tobacco, and other excise taxes which are paid by the manufacturer or wholesaler and passed on to the retailer

Figure 19. Laclede Total Retail Sales and Total Personal Income Growth, 1991-2001 (in 2001 dollars)

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

Per

cent

Total Retail Sales Growth

Total Personal Income Growth

Data Source: Missouri Department of Revenue, U.S. Bureau of Census, Bureau of Economic Analysis, Tax Administration BureauAnalysis by CPAC

Figure 1. Laclede County and Lebanon City vs. State Total Retail Sales 1990-2001 (2001 dollars)

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Year

Sta

te S

ales

(th

ou

san

ds)

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Co

un

ty a

nd

Cit

y

Sal

es (

tho

usa

nd

s)

Missouri Laclede Lebanon

Data Source: Missouri Department of Revenue, Tax Administration Bureau Analysis by CPAC

Figure 3. Laclede County and Lebanon City vs. State Per Capita Retail Sales, 1990-2001 (2001 dollars)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

Per

Cap

ita

Ret

ail S

ales

Missouri

Laclede

Lebanon

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of CensusAnalysis by CPAC

Figure 3. Laclede County and Adjacent Counties Total Retail Sales

1990, 1995 and 2001 (2001 dollars)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Laclede Camden Dallas Pulaski Texas Webster Wright

Year

Thou

sand

s

1990

1995

2001

Data Source: Missouri Department of Revenue, Tax Administration BureauAnalysis by CPAC

Figure 4. Laclede County and Adjacent Counties Per Capita Retail Sales 1990, 1995 and 2001 (2001 dollars)

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

Laclede Camden Dallas Pulaski Texas Webster Wright

County

Pe

r C

ap

ita

Re

tail

Sa

les

1990

1995

2001

Data Source: Missouri Department of Revenue, U.S. Bureau of CensusTax Administration BureauAnalysis by CPAC

Figure 21. Lebanon and Adjacent CitiesTotal Retail Sales 1990-2001 (in 2001 dollars)

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

Carthage Chillicothe Lebanon Monett Rolla West Plains

Do

llars

(th

ou

san

ds)

1990

1995

2001

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of CensusAnalysis by CPAC

Figure 20. Lebanon and Adjacent Cities Per Capita Retail Sales1990 and 2000 (in 2001 dollars)

-

5,000

10,000

15,000

20,000

25,000

Carthage Chillicothe Lebanon Monett Rolla West Plains

Do

llars

PC Retail sales 1990

PC Retail sales 2000

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of CensusAnalysis by CPAC

Trade Area Analysis

Trade Area Capture

Purpose: To estimate the number of customers

drawn to a particular community or county to

purchase a product or service at any given time

Trade Area Capture

Income CapitaPer County

Income CapitaPer State

Subsector for

Sales Retail

CapitaPer State

Subsector for

Sales Retail

County

Subsector for TACCounty

i

ii

Calculation

What Does Trade Area Analysis Tell Us?

Trade Area CaptureIf Trade Area Capture is Larger than Population:

The community is attracting consumers from outside its boundaries, or

Local residents are spending more for the selected commercial item than the state average

If Trade are Capture is Less than Population:

The community is not capturing the commercial purchases of its own residents, or

Local Residents are spending relatively less for the commercial item than the state average

Pull Factor

Purpose: To estimate the portion of customers a community draws from outside its borders

Calculation:

Pull Factor = Trade Area Capture estimate

County population

Trade Area Analysis

Pull Factor

What Does Trade Area Analysis Tell Us?

If Pull Factor is Greater than 1.0:

The community is attracting consumers from outside its boundaries, or

Local residents are spending more for the selected commercial item than the state average

If Pull Factor is Less than 1.0:

The community is not capturing the commercial purchases of its own residents, or

Local Residents are spending relatively less for the commercial item than the state average

Purpose: To estimate possible retail sales that could be achieved if each retail subsector captured 100 percent of the local market

Calculation:

Potential Sales = Actual Retail Sales of merchandise j in county l

Pull Factor for this type of merchandise in county l

Potential Sales

If Potential Sales fall behind the actual sales:There is a surplus in this subsector and the subsector is considered an exporter.

If Potential Sales exceed the actual sales:There is a leakage in this subsector and the subsector is considered an importer.

In this case, the subsector is losing money because people are going outside of the locality to purchase some of the goods and services provided by the subsector.

Potential Sales

  The data are from 1990 with fiscal data adjusted for inflation (2001 dollars). This example is for the Total Retail Sales and Food category. 

Data for Laclede CountyPopulation 27,228Per Capita Income $17,167Total Retail Sales $236,549,645Food Stores’ Sales $40,453,349

 Data for MissouriPopulation 5,128,880Per Capita Income $24,042Total Retail Sales $54,293,947,976Food Stores' Sales $7,875,626,391State Per Capita Food Sales $1,536State Per Capita Total Sales $10,586

Example For Laclede County

Example For Laclede County

Trade Area Capture (TAC) calculation:

TAC = 31,295 (persons) TAC for Food Subsector = 36,884 (persons)

County TAC for Total Retail Sales

167,17$

042,24$*

586,10$

645,549,236$=

Pull Factor (PF) calculation

PF for Total Retail Sales = 1.15 PF for Food Subsector = 1.36

County PF for Total Retail Sales 228,27

295,31=

Example For Laclede County

Potential Sales (PS) calculation:

County PS for Total Retail Sales 1.15

45$236,549,6=

PS for Total Retail Sales = $205,695,343.48 (actual $236,549,645)

PS for Food Subsector = $29,745,109.55 (actual $40,453,349)

Example For Laclede County

Figure 5. Laclede County and Adjacent Counties

Trade Area Capture, 1990, 2001

-

10

20

30

40

50

60

70

Laclede Camden Dallas Pulaski Texas Webster Wright

Th

ou

san

ds

of

Per

son

s

1990

2001

Data Source: Missouri Department of Revenue, U.S. Bureau of Census, Bureau of Economic Analysis, Tax Administration BureauAnalysis by CPAC

Figure 7. Laclede County Trade Area Capture 1990, 2001

0

10

20

30

40

50

60

70

80

90

Buildin

g

Gen

eral

Mer

chan

dise

Food

Store

Autom

otive G

as

Appar

el

Furnit

ure

Eating

Misc

ellan

eous

Hotels

and

Mot

els

Auto

Repair

s

Retail Category

Th

ou

san

ds

of

Per

son

s

1990

2001

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of Census, Bureau of Economic AnalysisAnalysis by CPAC

Figure 10. Laclede County and Adjacent CountiesGeneral Merchandise Stores

Trade Area Capture, 1990, 2001

-

2

4

6

8

10

12

14

16

Laclede Camden Dallas Pulaski Texas Webster Wright

Thou

sand

s of

Per

sons

1990

2001

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of Census, Bureau of Economic AnalysisAnalysis by CPAC

Figure 6. Laclede County and Adjacent Counties

Pull Factor 1990, 2001

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Laclede Camden Dallas Pulaski Texas Webster Wright

Pu

ll F

acto

r

1990

2001

Data Source: Missouri Department of Revenue, U.S. Bureau of Census, Bureau of Economic Analysis, Tax Administration BureauAnalysis by CPAC

Figure 8. Laclede County Pull Factor1990, 2001

-

0.50

1.00

1.50

2.00

2.50

3.00

Buildin

g

Gen

eral

Mer

chan

dise

Food

Store

Autom

otive G

as

Appar

el

Furnit

ure

Eating

Misc

ellan

eous

Hotels

and

Mot

els

Auto

Repair

s

Retail Category

Pu

ll F

ac

tor

1990

2001

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of Census, Bureau of Economic AnalysisAnalysis by CPAC

Figure C9. Laclede County and Adjacent CountiesBuilding Material, Hardware and Garden Supplies

Pull Factor, 1990, 2001

-

0.50

1.00

1.50

2.00

2.50

3.00

Laclede Camden Dallas Pulaski Texas Webster Wright

Pu

ll F

ac

tor

1990

2001

Data Source: Missouri Department of Revenue, Tax Administration Bureau, U.S. Bureau of Census, Bureau of Economic AnalysisAnalysis by CPAC

Economic Impact of Retail Trade

In 2000, about 3,700 people were employed in retail businesses in Laclede County.

The combined retail categories make up about 19 percent of the total county employment.

Income from the retail categories totaled more than $66.2 million, excluding proprietor's income, which is 10 percent of the wage, salary and other labor earnings of Laclede County residents.

Retail Sector

County Employment *

Employment Multiplier

Total Employment

Impact

Earnings (1,000)

Income multiplier

Total Income Impact (1,000)

Average Wage per Employee

Building Materials 162 1.23 199 $2,956 1.19 $3,531 $17,760General Merchandise 627 1.16 (D) (D) 1.25 (D) (D)Food Stores 242 1.18 285 $4,305 1.19 $5,113 $17,965Automotive and Gas 738 1.20 886 $12,759 1.22 $15,585 $17,589Apparel 109 1.16 (D) (D) 1.30 (D) (D)Furniture 228 1.25 284 $4,740 1.24 $5,870 $20,661Eating 898 1.20 1,076 $8,877 1.38 $12,209 $11,344Miscellaneous 429 1.15 494 $15,963 1.21 $19,248 $38,943Hotels and Motels 190 1.28 243 $3,081 1.46 $4,506 $18,543Auto Repair 79 1.44 114 $3,584 1.49 $5,335 $46,758

Total 3,702 1.33 4,933 $66,232 1.41 $93,187 $18,891* The employment for Building Materials through Miscellaneous Categories are estimates based on ES-202 data from MO Works! and

the 1-digit employment SIC for retail sales.

Laclede County Retail Trade Impact on Employment and Income, 2000

Table 1.

Source: Minnesota IMPLAN GroupU.S. Bureau of the Census, Bureau of Economic Analysis, REIS;MO Works! http://mo.works.state.mo.us; andU.S. Department of Labor, Bureau of Labor Statistics, http://stats.bls.gov/data/home.htm

Analysis by CPAC

Table 2.

Source: Minnesota IMPLAN GroupU.S. Bureau of the Census, Bureau of Economic Analysis, REIS;U.S. Department of Labor, Bureau of Labor Statistics, http://stats.bls.gov/data/home.htm

Analysis by CPAC

Shift-Share Analysis

Aggregate State Effect: the expected growth of a retail sector i in a county j given the overall average state retail sales growth.

Category/Sector Effect: county's growth due to the differences in the business structure of a county and that of a state.

Competitive Effect: differences between the rates of growth for a county and those for a state in individual retail sectors.

Figure 22. Laclede County Decomposition of Shift-Share Analysis

1990-2001 (in $1,000)

-20,000 -10,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Building

Merchandise

Food

Auto

Gas

Apparel

Furniture

Eating

Miscellaneous

Hotels

Auto Repair

Cat

ego

ry

Total Change

Aggregate State Effect

Category/Sector Effect

Competitive/Local Effect

Data Source: Missouri Department of Revenue, Tax Administration BureauAnalysis by CPAC

Retail Aggregate State Category/Sector Competitive/Local Total ChangeCategory Effect Effect Effect Over Time

1990-95 1995-20011990-20011990-95 1995-20011990-2001 1990-95 1995-2001 1990-2001 1990-95 1995-2001 1990-2001Building 1,625 1,725 3,378 -330 -4,932 -5,273 83 -47 19 1,378 -3,254 -1,876Merchandise 623 741 1,296 306 -3,641 -3,134 295 1,678 1,841 1,225 -1,222 3Food 4,789 3,729 9,954 -9,330 -3,816 -14,592 -3,255 -1,307 -4,552 -7,796 -1,394 -9,190

Auto 407 729 846 383 -1,054 -272 2,154 319 2,363 2,944 -7 2,937Gas 489 455 1,016 -494 -333 -895 -140 -2,072 -2,217 -145 -1,950 -2,095Apparel* 2,189 1,175 4,550 -1,474 -1,820 -5,038 -8,911 -9,651 -18,004 -8,196 -10,295 -18,491Furniture 807 1,046 1,677 2,540 -1,113 1,595 -1,002 1,276 282 2,345 1,209 3,554Eating 2,572 2,747 5,346 -454 -1,110 -1,607 211 -2,634 -2,409 2,328 -998 1,331Miscellaneous 2,597 3,986 5,399 2,896 36,722 32,084 7,478 29,452 45,649 12,971 70,160 83,131Hotels 533 515 1,107 1 -966 -1,076 -520 1,690 1,222 14 1,240 1,253Auto Repair 170 148 353 200 77 330 -506 -68 -663 -137 157 20

Total Effect 34,922 2,123 23,532 60,577* 2001 data for Apparel w as treated as true zero.

Retail Sales Shift-Share Decomposition Analysis Laclede County, 1990-2001 ($1,000)

Table 3

Data Source: Missouri Department of Revenue, Tax Administration BureauAnalysis by CPAC

Figure 23. Laclede County Decomposition of Shift-Share Analysis

1990-2001 (in %)

-100.00 -50.00 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00

Building

Merchandise

Food

Auto

Gas

Apparel

Furniture

Eating

Miscellanous

Hotels

Auto Repair

Cat

ego

ry

Total Change

Aggregate State Effect

Category/Sector Effect

Competitive/Local Effect

Data Source: Missouri Department of Revenue, Tax Administration BureauAnalysis by CPAC

Table 4

Data Source: Missouri Department of Revenue, Tax Administration BureauAnalysis by CPAC

Key Findings

After adjusting for inflation, Laclede County’s retail sales increased from $237 million in 1990 to $302 million in 2001 -- a growth of 27.48 percent. This is compared to a growth of 19.83 percent in retail sales for the state over the same time period.

 County retail sales have declined in real terms

between 1999 and 2001 -- from $313 million to $302 million (2001 dollars). 

The number of retail firms in Laclede County increased from 800 in 1990 to 900 in 2000.

Laclede County’s pull factor decreased from 1.15 in 1990 to 1.09 in 2001. The county is drawing customers from outside its borders or its residents are spending more on retail sales than the state average

Miscellaneous Retail appears to be the fastest growing category with respect to maintaining or capturing customers within its trade area.

Several retail categories show promise for expansion in Laclede County. These include Miscellaneous Retail, Hotels and Motels, and Automotive.

Key Findings

In 2000, over 3,700 people were employed in retail businesses in Laclede County – 19 percent of total county employment. 

Payroll from the retail sectors totaled more than $66,232,000 -- 10 percent of the wage, salary and other labor earnings of Laclede County residents.

Key Findings

Data Sources

Retail Sales: Missouri Department of Revenue, Tax Administration Bureau, Gross Taxable Sales Data, 1990-2001Population: Population Estimates Program, U.S. Bureau of Census, Population Division, Release Date: April 2002Income: Bureau of Economic Analysis, Regional Economic Information System; U.S. Bureau of Census, IMPLANEmployment by workplace: U.S. Bureau of Census; Bureau of Economic Analysis, Regional Economic Information System