ETSU
Bureau of Business and Economic Research
Tri-Cities
Retail Sales Report
East Tennessee State University
+ First Quarter 2005 + College
of Business and
Technology
THE TRI-CITIES
Retail trends at the end of 2004 continued into the opening months of 2005
in the three cities. On a year-to-year basis, the dollar value of sales grew an
impressive 11.0% in Johnson City to $334 million, and a strong 5.5% in Kingsport to $266 million. Retail sales
declined in Bristol
– falling 1.8% to $197 million. Adjusted for inflation, sales volume during the
January to March period increased 7.7% in Johnson City
and 2.3% in Kingsport, while decreasing 4.7% in Bristol.
BRISTOL TN-VA JOHNSON CITY KINGSPORT
Period Sales Y-Y%Ch Sales Y-Y%Ch Sales Y-Y%Ch
1997 713.3 n/a 1012.9 n/a 996.0 n/a
1998 749.4 5.1 1062.5 4.9 1066.8 7.1
1999 831.7 11.0 1121.3 5.5 1074.0 0.7
2000 825.4 -0.7 1163.6 3.8 1050.8 -2.2
2001 810.0 -1.9 1247.8 7.2 1072.2 2.0
2002 809.7 -0.0 1288.1 3.2 1080.0 0.7
2003 813.6 0.5 1280.3 -0.6 1135.4 5.1
2004 844.8 3.9 1342.3 4.8 1151.9 1.4
02:1 195.3 8.3 302.9 8.9 252.1 3.3
02:2 190.7 -9.5 327.0 8.9 268.2 0.0
02:3 207.2 8.4 307.2 -0.1 260.3 -1.5
02:4 216.5 -4.9 351.0 -3.0 299.5 1.2
03:1 184.5 -5.5 281.4 -7.1 270.9 7.5
03:2 180.3 -5.5 308.6 -5.6 265.5 -1.0
03:3 208.7 0.7 321.8 4.8 272.4 4.7
03:4 240.1 10.9 368.5 5.0 326.6 9.0
04:1 200.7 8.8 300.9 6.9 252.4 -6.9
04:2 191.6 6.3 329.8 6.9 288.1 8.5
04:3 214.3 2.7 328.6 2.1 277.2 1.8
04:4 238.2 -0.8 383.0 3.9 334.2 2.3
05:1 197.0 -1.8 333.9 10.9 266.1 5.5
THE
METROPOLITAN AREAS
[See
the Special Note below on new metro area designations]. The Tri-Cities metro
area enjoyed the best retail performance in East Tennessee
during the first quarter. The dollar value of retail sales grew 5.0% to reach
$1,151 million. Adjusted for inflation, retail volume in the Tri-Cities CSA was
1.9% above 2004 levels (compared to a 0.5% increase in the fourth quarter).
Unfortunately,
the strong regional performance did not include all the counties in the CSA
metro area. On a year-to-year basis, higher dollar sales and sales volume were
reported by Carter, Sullivan,
Washington (TN), and Washington
(VA) Counties. Hawkins and Scott saw higher dollar sales, but adjusted for
inflation, real sales activity was down. Dollar sales and volume declined in
Scott and Unicoi Counties.
TRI-CITIES CSA KNOXVILLE MSA CHATTANOOGA MSA
Period Sales Y-Y%Ch Sales Y-Y%Ch Sales Y-Y%Ch
1997 4041.4 n/a 8077.2 n/a 4194.6 n/a
1998 4240.5 4.9 8545.9 5.8 4292.7 2.3
1999 4436.2 4.6 9170.9 7.3 4555.2 6.1
2000 4477.1 0.9 9419.7 2.7 4641.6 1.9
2001 4544.1 1.5 9465.1 0.5 4685.2 0.9
2002 4644.9 2.2 9622.8 1.7 4650.3 -0.7
2003 4661.5 0.4 9877.4 2.6 4659.3 0.2
2004 4837.0 3.8 10313.0 4.4 4898.8 5.1
01:4 1252.5 4.6 2615.0 3.7 1249.8 2.7
02:1 1093.9 7.1 2214.3 3.5 1110.1 3.4
02:2 1173.4 2.5 2460.3 4.7 1182.3 -2.1
02:3 1160.0 3.1 2397.9 1.5 1156.0 0.1
02:4 1217.6 -2.8 2550.3 -2.5 1201.8 -3.8
03:1 1067.3 -2.4 2199.1 -0.7 1052.8 -5.2
03:2 1133.3 -3.4 2458.4 -0.1 1160.2 -1.9
03:3 1188.0 2.4 2530.6 5.5 1185.3 2.5
03:4 1273.0 4.5 2689.2 5.4 1260.9 4.9
04:1 1096.3 2.7 2381.4 8.3 1143.2 8.6
04:2 1203.8 6.2 2561.1 4.2 1219.1 5.1
04:3 1214.4 2.2 2561.0 1.2 1221.8 3.1
04:4 1322.4 3.9 2809.5 4.5 1314.7 4.3
05:1 1151.1 5.0 2430.2 2.1 1192.1 4.3
After
a good holiday selling season, retail activity in the other metro areas of East Tennessee became mixed during the January to March
period. On a year-to-year basis, Chattanooga MSA
retail sales were up 4.3% to $1,192 million, while Knoxville MSA retail sales rose only 2.0% to
$2,430 million. Adjusted for inflation, sales volume increased 1.2% in Chattanooga but declined 1.0% in Knoxville.
UNITED
STATES AND TENNESSEE
UNITED STATES TENNESSEE
Period Sales Y-Y%Ch Sales Y-Y%Ch
1997 2,714,035 4.7 50,813 5.9
1998 2,844,521 4.8 52,882 4.1
1999 3,082,970 8.4 56,692 7.2
2000 3,288,734 6.7 58,495 3.2
2001 3,387,964 3.0 58,500 0.0
2002 3,473,659 2.5 59,509 1.7
2003 3,624,794 4.4 61,883 4.0
2004 3,901,739 7.6 65,039 5.1
02:1 797,671 2.3 13,667 0.8
02:2 877,534 2.0 14,986 0.6
02:3 879,985 4.9 15,011 3.2
02:4 918,469 1.0 15,844 2.2
03:1 822,806 3.2 13,913 1.8
03:2 909,196 3.6 15,460 3.2
03:3 924,035 5.0 15,845 5.6
03:4 968,757 5.5 16,666 5.2
04:1 891,516 8.4 14,977 7.6
04:2 976,877 7.4 16,279 5.3
04:3 983,908 6.5 16,382 3.4
04:4 1,049,438 8.3 17,401 4.4
05:1 946,650 6.2 15,825 5.7
[See
the Special Note below on revisions of national retail sales data.] In both the
United States and Tennessee, the strong
retail performance trends of 2003 and 2004 continued into the new year. At the national level, dollar sales grew 6.2% to $947
billion, while sales volume increased by 3.0%. In real terms, retail sales have
now increased for nine quarters in a row. In Tennessee, retail growth was 5.7% in the
first quarter as dollar sales reached $15.8 billion. Sales volume increased in
the state by 2.5%, marking the eighth quarter in a row of real growth.
ANALYSIS
The
broad retail momentum of 2003 and 2004 continued into the opening months of 2005.
Nearly all of the retail markets covered by this report enjoyed a good first
quarter. This pattern is normal at this stage of the business cycle. As we
noted in previous reports, the national economy has moved beyond the recovery
phase of the business cycle, and has resumed its growth along a sustainable
long-run expansion path. The economic news at the national level should
continue to be good, but boring (which is a good thing!).
This
pattern of business activity seems to be emerging at the state and regional
levels as well. Tennessee
is into its eighth quarter in a row of real growth in retail activity. This
fact will finally give some relief to the state budget situation. (Over
one-half of state revenue is sales tax collections from retail sales).
The
Tri-Cities metro area (now a CSA rather than a MSA) has also enjoyed a two year
period of general improvement in retail activity. This trend should continue.
For individual cities and counties, retail performance will be erratic. This
pattern is normal at the local level, where retail activity can be dominated by
singular events. The city or county that is enjoying strong retail growth this quarter, may well see reduced sales in the next quarter. And vice-versa.
Special Note. This retail sales report
incorporates two changes. First, the federal government has divided the
Tri-Cities metropolitan area into two Metropolitan Statistical Areas, the
Johnson City MSA and the Kingsport-Bristol MSA. These two MSAs
are combined into a Tri-Cities Combined Statistical Area (CSA) which is
identical to the former Tri-Cities MSA. These reports will continue to focus on
the Tri-Cities region as a whole and will report sales data on the CSA basis.
The Chattanooga and Knoxville metro areas continue to be defined
as MSAs. Second, the U.S. Census Bureau has revised the
national retail sales data back to 1992. The revised retail sales figures show
decreases from the previous estimates. For example, U.S. retail sales for 2004 have
been reduced from $4,054 billion to $3,902 billion.
Technical Note. This report was prepared in
June 2005. The national retail sales estimates are the "Retail and Food
Service Sales" figures issued by the U.S. Census Bureau. The state, metro,
county, and city retail sales estimates are based on state sales tax
collections and are benchmarked to the 1997 U.S. Census of Retail Trade.
The Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics is used
to adjust the dollar value of retail sales into "real" or volume
terms where the effects of price inflation are removed. The sales data are not
adjusted for seasonality so comparisons should be made on a year-to-year basis.
All dollar figures in the retail sales tables are in millions of dollars.
More
information. This report was prepared by Dr. F. Steb Hipple, Professor of
Economics, and Research Associate, BBER. For more information, please contact
Dr. Hipple c/o Department of Economics, Finance, and Urban Studies, Box 70686,
East Tennessee State University, Johnson City, Tennessee 37614.
Phone/Voicemail: 423-439-5304. Fax: 423-439-8583. E-Mail: Hipples@ etsu.edu.
Website: http://faculty.etsu.edu/hipples.