ETSU
Bureau of Business and Economic Research
THE
TRI-CITIES
The ongoing recession dominated the retail
picture in the three cities during the critical holiday selling season. On a year-to-year basis, dollar sales fell
10.9% in Bristol, 5.0% in Kingsport, and 3.5% in Johnson City. Adjusted for inflation, real sales decreased
12.2% in Bristol, 6.5% in Kingsport, and 5.0% in Johnson City. In comparison, real sales were down 5.1% in
the metro area and 4.5% in Tennessee, but increased
0.5% in the nation as a whole.
BRISTOL TN-VA JOHNSON CITY KINGSPORT
Period Sales Y-Y%Ch Sales Y-Y%Ch Sales Y-Y%Ch
2000 947.6 -0.8 1317.1 3.8 1108.1 -2.2
2001 929.9 -1.9 1412.4 7.2 1130.7 2.0
2002 929.7 -0.0 1458.0 3.2 1138.9 0.7
2003 933.7 0.4 1449.2 -0.6 1197.3 5.1
2004 969.8 3.9 1519.4 4.8 1214.7 1.4
2005 1007.0 3.8 1631.0 7.4 1245.6 2.6
2006 1078.0 7.1 1681.9 3.1 1287.9 3.4
2007 1157.1 7.3 1778.0 5.7 1283.8 -0.3
2008 1108.3 -4.2 1783.6 0.3 1327.2 3.4
2009 1020.3 -7.9 1698.7 -4.8 1239.6 -6.6
07:1 280.7 12.2 406.3 4.8 311.4 5.8
07:2 267.6 8.9 423.2 2.3 312.2 -1.8
07:3 291.8 8.9 447.9 6.4 301.1 -4.0
07:4 317.0 0.9 500.5 8.9 359.1 -0.8
08:1 272.3 -3.0 417.1 2.6 300.5 -3.5
08:2 255.9 -4.4 442.1 4.5 343.1 9.9
08:3 280.9 -3.7 437.8 -2.2 330.9 9.9
08:4 299.1 -5.6 486.5 -2.8 352.7 -1.8
09:1 238.9 -12.3 395.3 -5.2 292.3 -2.8
09:2 245.9 -3.9 417.4 -5.6 308.9 -9.9
09:3 269.1 -4.2 416.5 -4.9 303.4 -8.3
09:4 266.4 -10.9 469.5 -3.5 334.9 -5.0
THE METROPOLITAN AREAS
During the October to December period, retail sales in
the Combined Statistical Area (CSA) fell 3.6% to $1,516 million. Adjusted for inflation, retail volume in the
Tri-Cities metro area was 5.1% below the same period in 2008. The level of dollar sales and sales volume
increased in Scott County, but continued to fall in the other six metro
counties. The smallest decline in retail
activity was in Washington (VA), followed by larger losses in Washington (TN),
Hawkins, Unicoi, Carter and Sullivan Counties.
TRI-CITIES CSA KNOXVILLE MSA CHATTANOOGA MSA
Period Sales Y-Y%Ch Sales Y-Y%Ch Sales Y-Y%Ch
2000 5100.3 0.9 9168.1 2.7 5686.4 1.9
2001 5178.3 1.5 9212.2 0.5 5739.7 0.9
2002 5293.0 2.2 9369.7 1.7 5699.3 -0.7
2003 5308.3 0.3 9613.5 2.6 5708.0 0.2
2004 5509.4 3.8 10037.5 4.4 6001.4 5.1
2005 5742.5 4.2 10751.7 5.3 6274.1 4.5
2006 6009.3 4.7 11307.5 7.0 6579.4 4.9
2007 6252.0 4.0 11676.0 3.3 6776.8 3.0
2008 6174.9 -1.2 10974.4 -6.0 6577.4 -2.9
2009 5800.2 -6.1 10036.5 -8.6 6101.7 -7.2
07:1 1454.4 5.5 2766.9 8.3 1587.1 4.1
07:2 1543.0 2.9 2927.6 2.1 1703.9 3.1
07:3 1548.6 2.6 2886.0 2.2 1674.8 1.8
07:4 1706.0 5.1 3095.4 1.1 1810.9 3.1
08:1 1467.7 0.9 2636.0 -4.7 1568.4 -1.2
08:2 1571.2 1.8 2837.4 -3.1 1698.3 -0.3
08:3 1563.1 0.9 2746.3 -4.8 1620.6 -3.2
08:4 1572.8 -7.8 2754.7 -11.0 1690.1 -6.7
09:1 1357.2 -7.5 2337.1 -11.3 1430.1 -8.8
09:2 1451.7 -7.6 2559.0 -9.8 1535.7 -9.6
09:3 1475.0 -5.6 2484.6 -9.5 1484.6 -8.4
09:4 1516.2 -3.6 2655.9 -3.6 1651.2 -2.3
Retail sales were also lower in the other metro areas
of East Tennessee. In the fourth
quarter, Chattanooga MSA sales revenues fell 2.3% to
$1,651 million, while Knoxville MSA sales were down 3.6% to $2,656
million. Adjusted for inflation, sales
volume dropped 3.9% in Chattanooga and 5.1% in Knoxville (compared to the 5.1%
decline in the Tri-Cities).
UNITED STATES AND TENNESSEE
UNITED STATES TENNESSEE
Period Sales Y-Y%Ch Sales Y-Y%Ch
2000 3,294,217 6.5 65,230 3.2
2001 3,385,577 2.8 65,235 0.0
2002 3,466,136 2.4 66,387 1.8
2003 3,615,170 4.3 69,008 4.0
2004 3,846,316 6.4 72,527 5.1
2005 4,080,678 6.1 77,544 6.9
2006 4,287,410 5.1 81,560 5.2
2007 4,432,621 3.4 84,412 3.5
2008 4,412,886 -0.4 82,071 -2.8
2009 4,139,061 -6.2 75,734 -7.7
07:1 1,024,460 3.2 19,851 5.9
07:2 1,125,933 3.2 21,276 3.6
07:3 1,112,268 2.8 21,059 2.6
07:4 1,169,960 4.4 22,226 2.2
08:1 1,059,840 3.4 19,669 -0.9
08:2 1,150,554 2.2 21,303 0.1
08:3 1,123,261 1.0 20,543 -2.4
08:4 1,079,231 -7.8 20,556 -7.5
09:1 951,798 -10.2 17,905 -9.0
09:2 1,042,241 -9.4 19,081 -10.4
09:3 1,044,210 -7.0 18,802 -8.5
09:4 1,100,812 2.0 19,945 -3.0
The retail recession may have ended in the United
States during the fourth quarter. Nationally,
dollar sales increased for the first time in a year – growing 2.0% to $1,101
billion. Adjusted for inflation, real
sales were higher by 0.5%. This increase is small, but represents the
first positive quarter in nearly two years.
As a reference, U.S. real sales declined for seven quarters during the
2008 to 2009 business recession, after twenty consecutive quarters of real
growth during the 2002 to 2007 business expansion. In Tennessee, the decline in retail activity
is moderating. Dollar sales fell 3.0% to
$19.9 billion, and sales volume was 4.5% below 2008 levels. Inflation adjusted sales have now declined
for nine straight quarters in the state.
ANALYSIS
Overall, retail performance during the fourth quarter
was slightly better than in the preceding periods. At the national level, retail activity
actually increased for the first time since 2007. At the state and local levels, the decline in
retailing seems to be moderating, which is the first step to a recovery in
sales volume.
Retail activity in the fourth quarter is very
important to the overall health of the economy.
For many retail businesses, the holiday selling season is more than
forty percent of total annual sales, and the profits or losses for the entire
year depend on November and December sales volume. Retailing also accounts for about one in
eleven jobs in the economy.
For analysts, retail performance is a
important element in gauging consumer confidence and forecasting business
conditions. From this perspective, the
fourth quarter increase in retail activity at the national level is very
encouraging. Despite continuing job
losses and high unemployment, the majority of American households has not only
returned to the marketplace, but has returned during the critical holiday
selling season.
This turnaround in retail performance is an important
component in the growth of production (real GDP) since last summer. And continuing increases in retail sales will
be critical to sustain the growth in output and ultimately create new jobs. This recession began with the decline in
employment in early 2008, and will not end until employment begins to recover.
Retail sales in Tennessee declined again during the
October to December period, but the drop in sales activity is moderating. With a continuing recovery in retailing at
the national level, the turnaround in retail activity in the state cannot be
too far behind. As we have discussed in
previous reports, the Tri-Cities region was late in entering the
recession. And so the area will also be
late in leaving the recession. By the
summer months, retail conditions should be improving in both the state and
Tri-Cities region.
Technical Note. This report was prepared in March 2010. The “Retail Sales” figures used in this
report are “Retail and Food Service Sales” which is the total of sales in NAICS
Sector 44, Sector 45, and Subsector 722.
The national retail sales estimates are issued by the
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 and Finance, Box 70686,