ETSU Bureau of Business and Economic Research

Tri-Cities Retail Sales Report

East Tennessee State University + First Quarter 2012 + College of Business and Technology

THE TRI-CITIES

After a lack luster holiday selling season, retail performance improved significantly during the January to March period. On a year-to-year basis, dollar sales increased 13.8% in Bristol, 8.5% in Kingsport, and 6.3% in Johnson City. Adjusted for inflation, retail volume grew 10.7% in Bristol, 5.6% in Kingsport, and 3.4% in Johnson City. In comparison, real sales increased 5.9% in the metro area, 5.9% in Tennessee, and 5.2% in the United States.

 BRISTOL TN-VA JOHNSON CITY KINGSPORT 
 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 2006 1018.9 6.8 1747.2 4.2 1398.7 5.7
 2007 1119.0 9.8 1855.4 6.2 1407.7 0.7
 2008 1070.8 -4.3 1848.1 -0.4 1445.0 2.7
 2009 982.8 -8.2 1760.2 -4.8 1349.6 -6.6
 2010 972.8 -1.0 1791.8 1.8 1379.9 2.2
 2011 1014.5 4.3 1888.2 5.4 1456.0 5.5
 08:1 263.4 -3.5 432.2 1.9 327.2 -4.2
 08:2 245.6 -4.3 458.1 3.7 373.5 9.1
 08:3 271.8 -3.7 453.7 -2.9 360.3 9.1
 08:4 290.0 -5.6 504.1 -3.5 384.0 -2.5
 09:1 231.2 -12.2  409.6 -5.2 318.2 -2.8
 09:2 236.2 -3.8 432.5 -5.6 336.4 -10.0
 09:3 258.5 -4.9 431.6 -4.9 330.4 -8.3
 09:4 256.8 -11.5 486.5 -3.5 364.7 -5.0
  10:1 232.1 0.4 414.7 1.3 317.9 -0.1
 10:2 228.6 -3.3 433.7 0.3 342.0 1.7
 10:3 248.7 -3.8 437.9 1.5 331.0 0.2
 10:4 263.5 2.6 505.5 3.9 388.9 6.7
 11:1 228.4 -1.6 426.8 2.9 326.5 2.7
 11:2 248.1 8.6 457.5 5.5 364.6 6.6
 11:3 260.8 4.9 471.3 7.6 369.1 11.5
 11:4 277.2 5.2 532.7 5.4 395.7 1.8
 12:1 259.9 13.8 453.6 6.3 354.3 8.5

THE METROPOLITAN AREAS

Retail activity rebounded in the Tri-Cities Combined Statistical Area (CSA) during the first quarter, a pleasant change from the flat sales volume of the holiday selling season. Dollar sales increased for the eighth quarter in a row, rising 8.9% to $1,642 million. Adjusted for price changes, metro retail volume rose 5.9% over the same period in 2011. The county data reflect this regional turnaround – dollar sales and inflation adjusted sales were higher in all seven CSA counties. Unicoi County reported the highest gains, followed by Hawkins, Washington (VA), Scott, Sullivan, Washington (TN), and Carter.

TRI-CITIES CSA KNOXVILLE MSA CHATTANOOGA MSA

 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 2006 6379.4 6.3 11817.0 8.3 7025.5 6.8
 2007 6643.2 4.6 12265.8  3.8 7293.2 3.8
 2008 6567.9 -1.1 11528.9 -6.0 7078.6 -2.9
 2009 6166.5 -6.1 10543.6 -8.6 6566.6 -7.2
 2010 6346.7 2.9 10875.7 3.2 6947.7 5.8
 2011  6635.5 4.6 11827.7 8.8 7341.4 5.7
 08:1 1561.0 0.9 2769.2 -4.7 1687.9 -1.2
 08:2 1671.8 2.0 2980.8 -3.1 1827.7 -0.3
 08:3 1663.0 1.1 2885.0 -4.8 1744.1 -3.2
 08:4 1672.0 -7.7 2893.8 -11.0 1818.9 -6.7
 09:1 1444.9 -7.4 2455.2 -11.3 1539.1 -8.8
 09:2 1544.1 -7.6 2688.3 -9.8 1652.7 -9.6
 09:3 1566.4 -5.8  2610.1 -9.5 1597.7 -8.4
 09:4 1611.1 -3.6 2790.0 -3.6 1777.0 -2.3
 10:1 1439.3 -0.4 2464.4 0.4 1625.7 5.6
 10:2 1604.9 3.9 2741.7 2.0 1756.2 6.3
  10:3 1599.7 2.1 2740.1 5.0 1718.9 7.6
 10:4 1702.8 5.7 2929.4 5.0 1846.9 3.9
 11:1 1507.8 4.8 2587.1 5.0 1670.3 2.7
 11:2 1685.9 5.0 2941.7 7.3 1842.3 4.9
 11:3 1684.6 5.3 3057.0 11.6 1878.7 9.3
 11:4 1757.2 3.2 3241.9 10.7 1950.1 5.6
 12:1 1641.7 8.9 2883.7 11.5 1818.6 8.9

Among the East Tennessee metro areas, Knoxville again saw the best retail performance. Dollar sales in the Knoxville MSA jumped 11.5% to $2,884 million, while the Chattanooga MSA reported an increase of 8.9% to $1,819 million. Adjusted for inflation, sales volume was up 8.4% in Knoxville, 5.9% in Chattanooga, and 5.9% in the Tri-Cities.

UNITED STATES AND TENNESSEE

 
 UNITED STATES TENNESSEE 
 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 2006 4,296,871  5.1 82,925 5.7
 2007 4,443,807 3.4 85,997 3.7
 2008 4,402,508 -0.9 83,612 -2.8
 2009 4,078,698 -7.4 77,155 -7.7
 2010 4,307,531 5.6  79,284 2.8
 2011 4,647,648 7.9 84,030 6.0
 08:1 1,061,441 3.4 20,038 -0.9
 08:2 1,147,891 1.8 21,703 0.1
 08:3 1,120,123 0.4 20,929 -2.5
 08:4 1,073,053 -8.6 20,942 -7.5
 09:1 941,593 -11.3 18,241 -9.0
 09:2 1,025,617 -10.7 19,439 -10.4
 09:3 1,029,626 -8.1 19,155 -8.5
 09:4 1,081,862 0.8 20,320 -3.0
 10:1 990,542 5.2 18,168 -0.4
 10:2 1,085,760 5.9 20,115 3.5
 10:3 1,076,300 4.5 19,907 3.9
  10:4 1,154,929 6.8 21,093 3.8
 11:1 1,069,622 8.0 19,141 5.4
 11:2 1,173,460 8.1 21,210 5.4
 11:3 1,167,029 8.4 21,202 6.5
 11:4 1,237,537 7.2 22,477 6.6
 12:1 1,157,084 8.2 20,829 8.8

The recovery in retail activity continued in the nation and the state during the winter months. Dollar sales in the United States increased for the tenth quarter in a row – rising 8.2% to $1157 billion. Adjusted for inflation, real sales were higher by 5.2% - marking the ninth consecutive quarter of real growth. (U.S. retail activity 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, dollar sales increased 8.8% to $20.8 billion. Sales volume was 5.8% above 2011 levels, marking the eighth quarter of real growth in retail activity (following ten consecutive quarters of declining sales volume during the recession).

ANALYSIS

All of the retail markets covered by this report had a very good first quarter. This is significant at the national and state levels because these winter results come on top of a strong holiday selling season. Consumers in the United States and Tennessee continue to be willing to spend. For the metro area, the first quarter results are a pleasant turnaround from the flat retail volume of the fourth quarter.

Economic conditions in the national economy seem to be at a turning point. Retail sales have been expanding for nine quarters, while output and production have lagged. During the first quarter, the U.S. economy had the highest level of job creation since 2007 and made the first serious dent in recession related unemployment. It appears that the economic recovery will now expand to include employment and production levels. This can become a self-sustaining process to get back to full production and maximum employment.

With the prospect of improving business conditions at the national level, the 2009 and 2010 regional gains in retail sales, employment, and output now seem more secure. The continuing worry has been that a lagging national recovery would reverse the business growth we have enjoyed in the Tri-Cities area.

We still face a long and hard slog to get the national and regional economies back to full prosperity. Production, employment, and retail activity are still well below desired levels. The positive first quarter results are a good first step in a multi-year recovery process.

Technical Note. This report was prepared in June 2012. The “Retail Sales” figures used in this report are “Retail and Food Service Sales” which is the total sales in NAICS Sector 44, Sector 45, and Subsector 722. The national retail sales estimates are issued by the U.S. Census Bureau. The state, region, county, and city retail sales estimates are based on state sales tax collections and are benchmarked to the 2007 U.S. Census of Retail Trade and the 2002 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. The dollar figures in the retail sales tables are in millions of dollars.

Data Note. The U.S. Census Bureau has revised the national retail sales data back to 1992. These revisions occur each year, and tend to be small. For example, U.S. retail sales for 2011 have been reduced from $4,699 billion to $4,648 billion.

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, 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.