ETSU Bureau of Business and Economic Research

Tri-Cities Retail Sales Report

East Tennessee State University + Second Quarter 2014 + College of Business and Technology

THE TRI-CITIES

The dollar level of retail sales revenue was higher in all three cities during the second quarter, marking an improvement over the first quarter performance. On a year-to-year basis, Kingsport sales increased 3.7% to $389 million, Bristol sales were up 1.3% to $252 million, and Johnson City sales rose 1.1% to $478 million. Adjusted for inflation, sales volume was up 1.6% in Kingsport but fell 0.8% in Bristol and 1.0% in Johnson City. In comparison, retail activity decreased 0.5% in the metro area, while increasing 1.2% in Tennessee and 2.8% in the United States.

 
 BRISTOL TN-VA JOHNSON CITY KINGSPORT 
 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 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
 2012 1088.0 7.3 1910.3 1.2 1491.2 2.4
 2013 1002.3 -7.9 1915.5 0.3 1522.1 2.1
 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
 12:2 264.3 6.5 463.5 1.3 368.4 1.0
 12:3 265.7 1.9 464.1 -1.5 361.0 -2.2
 12:4 298.2 7.6 529.1 -0.7 407.5 3.0
 13:1 243.0 -6.5 452.7 -0.2 352.7 -0.5
 13:2 248.9 -5.8 472.8 2.0 375.0 1.8
 13:3 250.8 -5.6 459.1 -1.1 386.6 7.1
 13:4 259.7 -12.9 531.0 0.4 407.7 0.0
 14:1 239.8 -1.3 448.4 -0.9 363.3 3.0
 14:2 252.0 1.3 477.8 1.1 388.7 3.7
 

THE METROPOLITAN AREAS

Retail activity in the Tri-Cities Combined Statistical Area (CSA) remained mixed during the spring months. Dollar sales rose by 1.5% $1,742 million, while retail sales volume decreased 0.5% below the second quarter of 2013. Inflation adjusted retail activity has now fallen during eight of the last nine quarters. Among the seven metro counties, only Sullivan County reported higher dollar sales and real sales. Carter, Washington (VA), Washington (TN), Unicoi, and Scott had small increases in retail revenues but saw retail lower sales volume. Dollar sales and real sales both fell in Hawkins County.

TRI-CITIES CSA KNOXVILLE MSA CHATTANOOGA MSA

 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 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
 2012 6762.3 1.9 12105.0 2.4 7629.1 3.9
 2013 6732.3 -0.4 12147.6 0.4 7606.1 -0.3
 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
 12:2 1692.0 0.4 3043.0 3.4 1939.6 5.3
 12:3 1670.4 -0.8 2992.7 -2.1 1883.7 0.3
 12:4 1758.1 0.1 3185.7 -1.7 1987.2 1.9
 13:1 1589.2 -3.2 2843.1 -1.4 1790.7 -1.5
 13:2 1716.6 1.5 3072.8 1.0 1945.4 0.3
 13:3 1666.3 -0.3 3019.5 0.9 1880.3 -0.2
 13:4 1760.2 0.1 3212.3 0.8 1989.7 0.1
 14:1 1598.9 0.6 2859.7 0.6 1793.2 0.1
 14:2 1742.4 1.5 3151.6 2.6 1995.1 2.6
 

Retail performance was stronger in the East Tennessee metro areas during the April to June period. Dollar sales rose 2.6% in Knoxville, 2.6% in Chattanooga, and 1.5% in the Tri-Cities. Adjusted for inflation, real sales rose 0.5% in Knoxville and 0.5% in Chattanooga. Sales volume was down 0.5% in the Tri-Cities. After declining for seven quarters, overall retail activity in East Tennessee has now improved.

UNITED STATES AND TENNESSEE

 
 UNITED STATES TENNESSEE 
 Period  Sales  Y-Y%Ch  Sales  Y-Y%Ch 
 2007 4,443,807 3.4 85,997 3.7
 2008 4,402,508 -0.9 83,612 -2.8
 2009 4,082,092 -7.3 77,155 -7.7
 2010 4,307,947 5.5 79,284 2.8
 2011 4,627,809 7.4 84,030  6.0
 2012 4,869,032 5.2 87,711 4.4
 2013 5,067,874 4.1 90,245 2.9
 10:1 991,137 5.3 18,168 -0.4
 10:2 1,086,431 5.9 20,115 3.5
 10:3 1,076,186 4.4 19,907 3.9
 10:4 1,154,193 6.5 21,093 3.8
 11:1 1,066,443 7.6 19,141 5.4
 11:2 1,169,075 7.6 21,210 5.4
  11:3 1,161,426 7.9 21,202 6.5
 11:4 1,230,865 6.6 22,477 6.6
 12:1 1,150,433 7.9 20,829 8.8
 12:2 1,223,324 4.6 22,189 4.6
 12:3  1,209,901 4.2 21,628 2.0
 12:4 1,285,374 4.4 23,065 2.6
 13:1 1,185,543 3.1 21,014 0.9
 13:2 1,277,921 4.5 22,907 3.2
 13:3 1,270,482 5.0 22,360 3.4
 13:4 1,333,928 3.8 23,965 3.9
 14:1 1,211,824 2.2 21,772 3.6
 14:2 1,340,483 4.9 23,646 3.2
 

The national retailing recovery found new vigor in the spring months after a slow first quarter. Dollar sales in the United States increased for the nineteenth quarter in a row – rising 4.9% to $1,340 billion. Inflation adjusted sales were higher by 2.8%, the strongest growth since mid-2013. Retail volume has now increased for eighteen consecutive quarters at the national level. (During the Great Recession period, U.S. retail activity declined for seven quarters, after increasing for twenty consecutive quarters during the 2002 to 2007 business expansion.)

In Tennessee, dollar sales rose 3.2% to $23.6 billion. Adjusted for inflation, sales activity in the state was 1.1% above 2013 levels. With the exception of the first quarter of 2013, the state has enjoyed higher levels of retail activity in sixteen of the last seventeen quarters. (During the Great Recession period, state sales volume declined for ten consecutive quarters.)

ANALYSIS

The retail picture generally improved during the second quarter after a mixed first quarter. In the United States, sales returned to the higher growth rates of the previous year. Tennessee saw continued (though modest) retail improvement, while Knoxville and Chattanooga enjoyed the first real growth in nearly two years. The Tri-Cities area was the laggard in the overall retail situation.

Part of the contrast between the winter and spring quarters was due to weather patterns. The winter was harsh, depressing business activity at the national, state, and local levels. So some of the second quarter retail improvement reflects sales delayed from the first quarter. But even with this adjustment, retail performance was generally better in the April to June period.

Retail activity in the Tri-Cities area continues to be a problem. Adjusted for inflation, metro sales volume has been declining for two years. This is in line with regional employment levels which have also been falling. Until there is job growth leading to higher incomes, there will be no basis for a strong retail recovery in the region.

The economic outlook is gradually improving.. At the national level, employment and production are increasing which suggests that the higher retail growth rate of the second quarter can be sustained. In Tennessee, retail growth remains stable, and Knoxville and Chattanooga are growing again. In the Tri-Cities area, the increasing strength of the national and state economies will ultimately have a positive impact on the business conditions in the region.

Technical Note. This report was prepared in September 2014. The “Retail Sales” figures used in this report are “Retail and Food Service Sales” which are 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.

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.