Maximizing Retail Sales in Polk County for Economic Growth

1. Bolivar Leadership January 23, 2007 2005 Taxable Sales: Polk County Judith I. Stallmann University of Missouri Extension Professor of Agricultural Economics, Rural Sociology and Truman School of Public Affairs

2. Retail Sales • Provide employment in the county • Is not high wage, generally • Provide sales tax revenues to the cities and to the county • Sales tax revenues come from other sectors also • Quality of life

6. Retail Sales Are a function of: • Population—consumer base • Local per capita income • Local retail availability so that county residents can shop locally • Attraction of consumers from outside the county

10. Retail sales analysis • Compare actual retail sales to potential retail sales • Shows how much of the potential sales are actually being captured locally

11. Potential Retail Sales (State per capita retail sales X county % of state per capita income X county population) • State per capita retail sales is adjusted by • County per capita income as a % of state per capita income • And multiplied by the county population

12. Retail Pull Factor _Actual retail sales_ Potential retail sales Multiplying by 100 gives the percentage of the potential that is spent locally

15. Retail sales tax revenues Actual retail sales • potential retail sales = • -$48,013,920 • With a 1% local option tax this is $480,139 in lower sales tax revenues

17. Know the Data • Based on taxable sales • Food stores • State taxes • Local option taxes • Other sales not taxable • Data disclosure problems with 6 firms or fewer • New way of classifying data

18. Retail sales: Polk vs. Missouri • Polk population growth more rapid • Per capita income growth is slower • Economies of scale in retail--some types of stores will locate only in cities above a certain size • Commuting outside the county can lower retail sales • average journey to work is 25 minutes

19. Changing Retail Environment • Destination shopping • Internet and catalog sales • Increasing percentage of income spent on untaxed services as compared with retail sales • Retail earnings are falling • Perhaps more part-time workers • Is a sector that is not growing as fast as the economy in general

20. U.S. Retail and E-retail Source: U.S. Census Bureau, Annual Retail Trade 2004

21. Total E-commerce ($ millions)

22. Numbers don’t tell all • Local information is important • Is there shifting of purchases between retail sectors? • Food stores to department stores or general merchandise stores. • Drugs to food stores and general merchandise • Are local spending patterns different from the state in some important way?

23. Data disclosure

24. The $64,000 Question • Why do people in the county shop outside of the county? • Why do firms not locate in the county • May be that the economics are such that it is not profitable to locate in the county

25. Even better questions • Why are people shopping in the county? Build on what works. • Those who live in the county • Those who do not live in the county • Can sectors with low-sales be indicators of potential new businesses?

26. Thank-you for the invitation Stallmannj@missouri.edu

27. The following slides provide additional information about surrounding counties.This likely will not be directly covered but is provided as additional information for those who are interested.