The Clinton Herald, Clinton, Iowa

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May 2, 2013

Retail sales figures vex local leaders

Report: Decline in local purchases past few years

CLINTON — A study examining retail activity showed declining sales in Clinton County from fiscal year 2012.

Per capita retail sales dropped to their lowest level since 1998 at $9,301, while real total taxable sales are at their lowest level since 1994 at a little more than $455 million, according to a recent retail trade analysis report by Iowa State University.

Clinton Area Chamber of Commerce President and CEO Nathan Sondgeroth said economies go through ups and downs.

“I don’t have specific thoughts as to why the numbers would be down, because members still report strong growth in sales,” Sondgeroth said.

The numbers reflect sales from fiscal year 2012, from July 1, 2011, to June 30, 2012. The study did not present information on businesses operating in the past 10 months.

Real taxable sales were down 3.7 percent from 2011 in Clinton County. Average sales per capita were down 3.5 percent from year to year.

The numbers have reflected a downward trend since 2008. In that year, Clinton County registered $11,332 retail sales per capita, a peak from continued increases that started in 2004. Since then, though, sales have declined, coinciding with a drop in population and increase in unemployment rate.

The increased retail numbers from 2004 to 2008 were during a time when the city of Clinton experienced growth through large retailers, like Kohl’s and Home Depot. Former Chamber President and current Clinton City Councilwoman Julie Allesee said the city needed those big retail stores to keep residents from shopping elsewhere.

Leakage was the lowest in 10 years during the period from 2006 to 2008. Leakage measures the dollar difference between the county’s actual sales and the total sales it could generate if residents satisfied their retail needs locally. In 2008, Clinton County registered an estimated leakage of minus $8.6 million. That was down from the estimated leakage of $100 million and $98 million in 2003 and 2004, respectively.

But that number has increased since 2008. In 2012, estimated leakage amounted to $88.1 million.

“When it comes to retail leakage, you don’t approach it from a macro economic sense, but from a micro economic sense,” Sondgeroth said. “These are individual consumers making rational choices of where to go and spend their capital. Communities think they can attack it from a a macro sense and will spend dollars here, but these are individual people making choices in their daily lives.

“But people spend dollars when they need a good or service. If they perceive that they can get that good or service locally, they will do that.”

Another issue identified in the report is the estimated amount of shoppers in the county. During the peak years of 2007 and 2008, the county attracted more than an estimated 48,000 shoppers. In 2012, that number had decreased to an estimated 41,030.

The report linked Clinton County within a peer group of counties that had similar retail activities. Within that group of 15, Clinton County ranked ninth. The county’s numbers ranked within the expected range for local sales per capita. The county has fluctuated from the middle of that range, which measures counties within the 25th and 75th percentile, from 2005 to 2012. In 2004, the county ranked below the 25th percentile.

“Do we have what they are looking for?” Sondgeroth said. “Do they know what we have? That’s a product challenge and a marketing challenge. It’s shocking how much you can get if you can shop locally. People don’t fully understand or realize what you can get locally from retailers.”

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