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9. EDSR 08-11-2008ITEM ~ 9. ver MEMORANDUM TO: Economic Development Authority FROM: Annie Deckert, Economic Development Assistant DATE: August 1 I, 2008 SUBJECT: Retail Trade Analysis Presentation BACKGROUND At the May 12, 2008 EDA meeting, EDA authorized staff to enter into a contract with the U of M Extension service to conduct a Retail Trade Analysis and Workshop and requested to review the report before deciding to hold a community workshop. An RTA report and workshop help a community. evaluate .the health of their retail sectors.. It provides local sales data, comparing your community to others, which in turn helps assess strengths and opportunities for our local businesses. This data specifies the actual retail potential, identifying retail opportunities, as well as which businesses are drawing shoppers away from our community. DISCUSSION/ACTION REQUESTED Tonight, U of M Consultant Claudia Cody, Regional Assistant Extension Professor, will be presenting a brief overview of the RTA data. Staff would like the EDA to evaluate the material presented and discuss how they would like to utilize this information. The EDA could partner with the Chamber of Commerce to hold a community workshop or the data could be used to assist in the EDA's marketing efforts (ie: put on website, sent out with marketing materials, etc.) Y ~®`l~ ~r® ~Y ~ t~g ~~ro`~~~l~QS ~~®I ~~t L UNIVERSITY OF MINNESOTA . ~ ~~G~) ~G~K~Z(~ ~4L~~®//bGI ViSlt wwW.extenSlOn.umn.edll~COmmun' ~' ¢ ~~~~ AA ANALYSIS VW tlYat /s Trade APea A6!lBlysES ? Perham Trade Area 2i Code A Trade Area Analysis organizes data from multiple sources into a _J - '""° - _ comprehensive description of who shops in your community - ~~ ' ,\ ~ - , demographics, purchasing power, as well as the lifestyles and values °~ held by shoppers. Extension organizes this data into understandable ~ - ~ - ~ reports and rich community discussions. Ultimately, this information ---`" , ~. - can strengthen a business community's vision by meeting the needs of ~_ _ their customers and tapping available opportunities. -- - -- What informatdon does a community learn in a Trade Area Analysis ? The report includes a breadth of information of interest to local retailers and community leaders, including • The geographic reach of the community's trade area • Types of customers in the trade area • Demographics and income levels of households in the trade area ® Potential spending in the trade area across multiple retail categories, with comparisons to the state • Types of media and leisure activites used by the varieties of households in the trade area How can Trade Area Anadysis be used by businesses and communities ? Chambers, economic development professionals, local businesses, tourism organizations and elected officials can tap this information to answer key questions such as • What other businesses might fit in our community ? • How can we effectively use media to market our community or business? • Do I have a viable business plan for this market ? • How can we change our inventory or expand our product lines to increase profits ? ® What community events or festivals would attract our trade area's audiences ? • What main street strategies would work for our market ? What wield our community receive with our Trade Area Analysis ? Communities can choose to receive a simple Trade Area Analysis summary, or a customized report Sim le Re ort Customized Re ort • Works well for traditional main-street markets • Works well for larger markets or those with with a small customer base seasonal or tourism business • The report will describe customers in your zip • The report is customized from addresses of code customers on local business lists • A two-hour workshop will engage community • A two-hour workshop will engage community discussion about results and future plans discussion about results and future plans • Cost : $750 • Two consultations with a local study group will guide the analysis • Cost: To be determined What else does Extension offer retailers ? • Retail Trade Analysis reports describe a town or county's retail strengths, weaknesses and patterns. • Small Stores Success Strategies Workshops help small stores survive in a big box economy. • Business Retention and Expansion programs get citiznes engaged in meeting the needs of local business. earn more a out ow Extension can hedp your community shape its future ~..a, ; Y "~`k ; k f it , .~ ~. -<x .: . ~~.. :., W.:, o ~ ~A cu n ycn Zj^~D as acs ~ .o o ~ ~ _ ~ ~ A trq O n g a rt 00 ~ ~ ~N ~ ~ ~ ~ _ ~ ~ ~.~•~a"c o 0 3 Q:C O~ p• y y ~.; ~ O~ c ~ o y~ o :° o Q. n 0 ~ ~' ty ~, „~, n (Q C N 7C ~ A A ~ ~ O CD (•D O O O ~' ~' O ~. ~ ~ ~ ~ O A N ~ ~ ~ ~ `O'' ~ a ~• O ~•. 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" tG ~ C ~ -`. _ ~ O • ~ v ~ cG v G v _ ~ CJ = fv J ~ `J - r r ^ - p v G ~ ~1~ ~ O - CC ~ _ O - = e y C C ~ ~ w y ~L tG O G -- ~ ~ '_" ~ ~ c^ I .' c, L ~ W l v "O ^ y C v y V J ~ Q y y= ^ ~ ~ y r Q C ~~ G C C _ ^ r. y , 'O , .~^- ~ , O ~ ~f ~ .- ^ ~ , = ~ ryi f ~ v~ - L CIi _ ~ !) `-~ r- CC !~" y ~ r.+ ~" ~ U F-+ ~ rt ~J ~ -ry ~ _ V1 ~+ ~ v_ .f. Q! 'u+~ w° ~I ++ ~ ~ W rt+ C$ 6J _ U (~ Q ~ ~ Q O U V1 .., Z CJ ~ ~ U CJ ~ C/] ~ ~ C/J G y C/Z ~ C.i :~ ~ LLB C ~L ~. o Available Now! Market Area Profiles Help your community_ know and grow its customer base. what is a Market Area Prole? A Market Area Profile organizes data from multiple sources into a comprehensive description of those who shop in and. visit your community their demographics, purchasing.. power, lifestyles, information sources and values. Extension organizes this data into easy-to-understand reports and leads discussions about'the data. The information can stimulate a plan for businesses and the community to proactively meet the needs of customers and tap opportunities to -increase revenue. What information does a community get with a Market Area Prole? The MAP includes a breadth. of information of interest to local retailers, tourism businesses and community leaders, including: The geographic reach of the community's trade area • Types of customers in the trade area • Demographics and income levels of households in the trade area • Types of media and leisure activities used by the varieties of households in the trade area • Market potential across multiple retail and service categories to identify gaps in the trade area Cull your, E_rfetlsiorr '- ~[f!!('ulOJ` IIt E'OttlJtllJJllf_y ' ECOitOftIICS (1~e~trapuFsawrc~cirau~ ~,_ ~_ '' ettensum unzru~d~Uca~uniuaty~stafJntryr)~ ~, f • ~ ~- ,f: ~..f 5 t ':' Bruce; bwsehwi ~ - X07 t ~ ~:. ~. ;, ~' der ~t n, edti r South Cenerat ~4lrttnepgta pavtd Nel.~on '`n~1so~17%c iiilin.edu;"~~ .. ~t}7-~S9-fifi60 .' North~~est end South~iest Cont~ut I~Iichacl Uli•ger, ~~~:. dar~~et u,iiriin.edu . r 61?=ft~~-62-I6 a rb ~ f~; ` ~ ~ i "l~ est Central ~vlinnescta Ryan Pesch ~ csch~u~unw'edu ~ r g;_9~8-'S7~J Central ~linricsota ~-~ . ~Adeel-Ahiied' " ~ahnietl0(?-t'ci,untn.edu` ~~ ~2Q-''03-C1~9 ~~ , North~a>t I~~li~m~c~~~ta John ~3ennett jhenn~ltu!un~n.cdu 15-726-E471 ~ 'E~~MN Tqur[srrr Center - _ tauris`tzi`a uiriir edri°' ~'61?-624"~4~#7 UNIVERSITY OF MINNESOTA How can Market Area Profiles be used by businesses and- communities? Chambers, economic development professionals, tourism organizations, local businesses, and elected officials will use this information to consider questions such as: • What other businesses might succeed here? • .How can we effectively use media to market our community or business? • Do I have a viable business plan for our market? • How can we change our inventory or expand our product lines to increase profits? • What community events or festivals would attract our trade area's audiences? • What main street or tourism development strategies would work for our market? What is included in the Market Area Profile? Your Extension educator will help you determine whether a simple profile or a customized report of a larger trade area is right for your community. The Simple Report: • Works well for traditional, main-street communities • .Describes customers in your local zip code(s) • Engages the community in a two-hour discussion about results and future plans • Cost: $750 The Customized Report: • Works well for a larger market or a seasonal/tourism market • Is customized from addresses of customers on local business lists • Engages the community in a two-hour discussion about results and future plans • Includes two consultations with a local study group . to guide the analysis • Cost: $1,500 Contact the Extension educator for Community Economics in your area to discuss whether your community should take advantage of the Market Area Profile ~~ ~ , StC1e•SS@5 f • n Ret~tr/ Ftrult ~turl~ st~~ '.~-~ ti <, ce~ol-tY3dtscribe~~a tc~~~~~, `. T` circ~~nnt~'~~~ lrtaii' ~ ~~~ stren~~ths. ~~tdl.ncs~es ~' and pattei~u~ 3 + , ~S1tZE~f~ 5Yf~1 ~' S ~FfCL ~ fy. '~%' r`r 4trc~l~cgu ~.~:I~~)lksh<)ps~.~~`,~~ c.' +, a{ ,., 7 ~; ~_ el rnal}. stores;sut~ne;~ ~ fh g' b~dY c~oetom}':~~ ' x;b~~ ~ I • ,~ B1lSiil(',C,C'RCIE'11(IOYI (1)IL~ ~~"~ ~ E.t'x)U31,C1()YI ~)1 (1«YCT711 t ~Tet ti, -citizens in~oIceit Ili . v' . lncet~n~ tl~e needs of lo~a~ 6u~iilc ~,. ,' For Americans with Disabilities accommodations, call 612-625-8233. University of Minnesota Extension is an equal opportunity educator and employer. UNIVERSITY OF MINNESOTA ~` Elk River & Sherburne County, Minnesota ~. UNIVERSITY OF MINNESOTA Created for City of Elk River, MN By Claudia Cody & Bruce Schwartau ~ U of M Extension 8/11/2008 Pull Factors measure the size of a city's (or county's) trade area. Pull Factor = City Sales Per Capita State Sales Per Capita A pull factor bigger than 1.00 means the city is "pulling" in trade. 111\'IHSI I'\iil \11~~I tit~lA 2 $Millions Elk River $700.0 _ _ _ - _ _ $600.0 $500.0 - .~ $400.0 - - - ^• $300.0 - $200.0 - _ - -~--...- .~-' $100.0 - -- - -_ . ' ~-Gross Sales -~-Taxable Sales $o.o ~ ~ - ~---- -- -,- 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 Year ~~AI I~.NtiITY (1F UIIti NF_Sf11A Millions of Dollars Change, 2003 to 2006 +$29.41 +$3.30 +$2.49 +$0.03 +$0.55 +$1.14 +$0.01 -$0.00 +$0.41 NA NA ~~ -$0.72 -$15.78 Parts Furn. Elec. BIdg.Mat Food Health Gas St. Cloth Leis. GenMer. Misc. Hotel Eat SIN I~'EN11TY tl~ MirvvFl~n~r.> 3 Pull Factor 1.40 1.20 1.00 0.80 0.60 0.40 0.20 Elk River 0.00 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 ~ ~~~ v~~k_,~~,~ <,~- M~ ~.~rs„~~ Year Pull Factor by NAICS Merchandise Category (1 of 2) 4.00. _ _._... _ 3 50 - . 3 00 . c Y 2.50 V LL 2.00 3 1.50 a 1.00 0.50 0.00 ~r' Vehicles F it Elec- Building F u & Parts rn ure tropics Materials ood p 2003 li 1.93 0.04 0.19 2.85 1.72 ^ 2004 ~ 1.68 0.08 0.13 '~ 2.54 1.53 ^ 2005 1.73 ~ 0.03 0.23 3.73 1.62 ^ 2006 1.60 0.03 ~ 0.20 3.48 1.52 Health 8 Gas Leisure Apparel Personal Stations Goods 0.93 1.24 0.61 0.26 0.97 1.24 0.56 0.32 0.75 ' -1_15 ~ ~ 0.27 0.78 1.24 _ 0.40 0.28 4 ~ • • . • . '•/ Pull Factor by NAICS Merchandise Category (2 of 2) a.so a.oo 3.50 H 3.00 0 ~ 2.50 -- - a 2.00 - - -. g a 1.50 7 - -- - 0.50 - 0.00 ~ Gen. '~~ Misc. Non-Store Amuse- ~ Eating 8 Repair Lodging Personal Merch. Store Dunking I Retail ment Services - - ®2003 ~04- _- 0 95 ~ 0 28 1.42 -~- 0 06 ~ - ---- - - 1.78 - __ 0.40 ~ 2004 2 80 1.97 - 0 07 0.33 ~I 0 26 1 24 1.57 0.30 ' ^2005; 2 61 '. 1.78 0.07 0 51 ~' 0 12 1 30 -- ~ --~--- __ 1 60 - 0.51 ^ 2006 -- 2 68 '~ 1.69 0 11 0 29 ~- 1 17 1 49 0.68 • One method for analyzing a city's retail sector is to compare the actual retail sales with the expected retail sales. ~.~I\'ERIITY (1~hll~ty Lti~l~ 5 Elk River Variance Between Actual8 Expected Percent Expected Actual Trade Area of Sales Sales In Dollars As % of Pop. Gain Number Total Merchandise Group ($millions) ($millions) (millions) Expected or Loss of Firms Sales Vehicles & Parts $6.54 $14.43 $7.89 120.5 % 26,859 18 6 Furniture Stores $2.36 $0.24 -$2.12 -89.9 % -20,027 6 0 Electronics $1.23 $1.86 $0.63 51.5% 11,467 7 1% Building Materials $17.40 $82.98 $65.58 377.0% 84,004 12 32% Food, Groceries $9.85 $18.55 $8.69 88.2% 19,664 9 7% Health, Personal Stores $1.77 $1.73 -$0.03 -2.0 % -438 11 1 Gasoline Stations $2.93 $4.27 $1.34 45.6% 10,165 8 2% Apparel $1.02 $1.48 $0.46 45.2% 10,072 15 1% Leisure Goods $1.42 $1.67 $0.25 17.6% 3,912 19 1% General Merchandise Store $25.93 $63.50 $37.57 144.9 % 32,290 5 25 NSscellaneous Retail $9.19 $15.09 $5.90 64.3% 14,318 66 6% Amusement & Recreation $2.22 $1.70 -$0.53 -23.6% -5,268 10 1 Accomodations $4.08 NA NA NA NA NA NA Eating & Drinking Places $18.33 $32.14 $13.82 75.4 % 16,803 46 12% Repair, Maintenance $3.10 $6.74 $3.64 117.5°k 26,179 33 3% Personal Services, Laund~ $1.39 $2.38 $0.99 71.5% 15,925 41 1 Total Sales $106.74 $257.90 $151.16 141.6% 31,561 481 100% Vehicles & Parts -120.5% + Furniture Stores 89.9% -- Electronics - 51.5 % + Building Materials Food, Groceries Health, Personal Stores Gasoline Stations Apparel Leisure Goods General Merchandise Stores Miscellaneous Retail _ Amusement 8: Recreation . Accomodations Eating 8. Drinking Places _ Repair, Maintenance Personal Services, Laundry _ Total Taxable Retail 8 Service 75.4 % + -117.5%+ 71.5 % + 141.6 % + 377.0 % + 300% 400% 500% -200% -100% 0% 100% 200% - 88.2 % + 2.0%-I 45.6 % + - 45.2 % + 17.6%+ -144.9 % + 64.3 % + 23.6 % - NA 6 City's Share of County Taxable Sales Total 43% 57% ^ ~k River ^ Rest of Sherburne County Retail Trade Analysis Report n Elk River & Sherburne County Minnesota Presented by Claudia Cody Assistant Extension Professor Community Economics University of Minnesota Extension Funding provided by The Slandin Foundatian and University of Minnesota Extension's Center for Community Vitality Copyright ©2008, Regents of the University of Minnesota. All rights reserved. accordance vrith the Americans with Disabilities Ad, this material is available in alternative formats upon request. Please contact your iiversity of Minnesota Extension office or the Distribution Center at (800) 876-8636. University of Minnesota Extension is committed to the policy that all persons shall have equal access to its programs, facilities, and loyment without regard to race, color, creed, religion, national origin, sex, age, marital status, disability, public assistance status, veteran rs. or sexual orientation. Table of Contents Page Introduction--------------------------------------------------------- 1 Data Sources Definition of Tern1s Elk River------------------------------------------------------------ 5 Historical Trends by Merchandise Category Components of Change by NAILS 2003 to 2006 Comparison with Competing Centers Retail Trade Overview Trade Area Analysis -Expected Sales Summary -Retail Trade Sherburne County-------------------------------------------------- 15 Historical Trends by Merchandise Category Components of Change by NAILS 2003 to 2006 Comparison with Competing Centers Retail Trade Overview Trade Area Analysis -Expected Sales Summary -Retail Trade Retail Trade Surplus or Leakage Elk River & Sherburne County Comparison, 2006---------- 26 Comparison of Pull Factors by Merchandise Category, 2006 27 28 Minnesota cities between 16,100 and 24,300 Comparison Ellc River to Minnesota Development Regions 29 State of Minnesota Per Capita Taxable Retail Sales and Threshold Levels for Selected Good and Services, 2006 30 Minnesota Taxable Sales Per Capita Trend-------------------- 31 Ellc River -Top Tapestry Segments---------------------------- 32 The University of Minnesota Extension has developed this retail trade analysis program to assist in the economic development of Minnesota towns and cities. These reports are available for all Minnesota counties, for most cities above 5,000 population and for a few cities smaller than 5,000 population. The retail sector of each jurisdiction can be evaluated b comparing its trends to those of other similar jurisdictions. Business people and economic development officials can use measures such as pull factors and leakages to determine the need and feasibility of new retail businesses. Data Sources Most of the data in the analysis are based on annual reports of Minnesota retail and use tax, published by the Minnesota Department of Revenue. The Department of Revenue published an annual report of sales and use tax by jurisdiction until 1996, at which time the reports were released biannually due to budget constraints. This analysis uses the available reports from 1990- 1996, 1998, 2000, 2003, 2004,2005 and 2006. The reports interpolate data for the years in which data are not available. (See http://www.taxes.state.mn.us/taxes/legal~olicy/research reports/sales_use_statistics_main.shtml) The income data in this repor are obtained from reports by Bureau of Economic Analysis (BEA). (See http://www.bea.gov/regionaUreis) Population data are derived from the U.S. Census. (See http://www.census.gov/popest/estimates.php) Sales and use tax permit holders file returns and remit taxes on either a monthly, quarterly or annual basis. Large businesses such as discount department stores whose tax is more than $500 per month are required to file on a monthly basis, while mediun sized businesses whose sales tax collections are less than $500 per month, are required to file on a quarterly basis and small businesses with sales tax collections less than $100 per month would most likely file on an annual basis. Definition of Terms Gross Sales Gross sales include taxable sales and exempt sales for businesses holding sales and use tax permits. This is the most inclusive indicator of business activity for the reporting jurisdictions but it can be misleading when used in comparisons. At times commodity items (like gasoline), that are not taxable, can have large price variations, creating huge swings in gross sales. Taxable Sales Taxable sales are the amount of sales subject to sales tax. Taxable sales exclude exempt items, items sold for resale, items sold for exempt purposes and items sold to exempt organizations. For more information on what is taxed in Minnesota, see "Minnesota Sales and Use Tax Instruction Booklet" availabe on the web at http://www.taxes. state.mn.us/taxes/sales/instructions/st_bk07.pdf) Current and Constant Dollar Sales Current dollar (or "nominal dollar") sales are sales as reported by the state. No adjustment has been made for price inflation. In general this measure of sales is not satisfactory for comparisons over long periods of time since it does not account for changes in population, inflation, or the state's economy. Constant dollar (or "real dollar")sales reflect changes in price inflation by adjustin current dollar sales with the Consumer Price Index (CPI). Constant dollar sales indicate the real sales level with respect to a base year. This is a more realistic method of evaluating sales over time than current dollar comparisons, but still does not take into consideration changes in population or changes in the state's economy. Page 1 Number of businesses The number of sales and use tax permit holders who filed one or more tax returns for the year are reported as the number of businesses. Reporting Period The reporting periods in this report are calendar years. For example, the sales reported for the year 2000 are for the period, January 1, 2000 to December 31, 2000. Per Capita Sales Per capita (or "per person") sales are calculated by dividing current dollar sales by the population estimate. In areas where population is subject to substantial change, this is a more satisfactory measure of sales activity than sales alone. However, it still does not reflect changes in the state economy. Pull Factor The pull factor was developed by Dr. Ken Stone, an economist from Iowa State University Extension Service to provide a precise measure of sales activity in a locality. It is derived by dividing the per capita current dollar sales of a city or county by the per capita sales for the state. For example, if a city's per capita sales are $20,000 per year and the state per capita sales are $10,000 per year, the pull factor is 2.0 ($20,OOo- $10,000). The interpretation is that the city is selling to 200 percent of the city population. Pull factors are good measures of sales activity because they reflect changes in population, inflation, and the state economy. Pull factors are available through the Extension Service for total taxable sales for all cities with reported sales (generally, cities with a population of 5,000 or more) since 1990. The pull factors listed in this report are not adjusted for differing income levels in different communities; they are simply the ratio of local per person sales to the state average. Income levels are accounted for in the expected sales and potential sales formulas, described below. Typical Pull Factor The typical pull factor is a pull factor that represents the "norm" for cities within a population group. It is an average for cities within a population group taking into account any outliers in the group. Personal Income Personal income is defined as the income received by, or on behalf of, all the residents of the county (state) from all sources. Personal income is the sum of wage and salary disbursements, supplements to wages and salaries (e.g.. contributions to retirement funds, health plans, life insurance policies), proprietors' income, rental income, personal dividend income, personal interest income, and personal current transfer receipts to persons (e.g. receipts of Social Security, disability, worker's compensation, Medicare/Medicaid, food stamps,etc.) less contributions for government social insurance (e.g. Social Security, Medicare). (For more details, see http://www.bea.gov/regional/pdf/spi2005/alternative measures.pdf). Index of Income This index provides a relative measure of income, calculated by dividing local per capita income by state per capita income. The base is 1.00. For example, an index of income of 1.20 indicates that per capita income in the area is 20 percent above the state average. Page 2 Expected Sales -for Cities Expected sales is a retail performance benchmark. It is an estimate of the sales level a town would achieve if it were performing on par with Minnesota towns of a similar size. In addition to population and income variables, expected sales incorporates the typical strength of comparable communities via thetypical pull factor . Expected sales is the product of city population, state pet capita sales, the index of income and the typical pull factor. For example, if a city has a population of 5,000, the state per capita sales are $9,000, the typical pull factor is 1.30, and the index of income is 1.03, expected sales is approximately $60 million per year (5,000 x $9,000 x 1.30 x 1.03). This provides a means of comparing what is expected for a city of a certain size to what is actually happening. Potential Sales -for Counties Potential sales is an estimate of the amount of money that is spent on retail goods and services by residents of a county. It is the product of county population, state per capita sales and the index of income. The potential sales concept for counties is similar to the expected sales calculations for towns. However, potential sales does not utilize a measure of average pulling power (like the typical pull factor that is used in the expected sales equation). Since a county is a relatively large region within which retail business takes place, counties are compared without adjustments for trade area size. Variance Between Actual and Expected Sales (Surplus or Leakage) The variance between actual and expected sales is how much retail sales differ from the "norm" (i.e., the amount above or below the standard established by the expected sales formula). When actual sales exceed expected sales, we say the city has a "surplus" of retail sales. When actual sales fall short of expected sales, we say the city has a retail sales "leakage". The set of similarly- sizedcities in Minnesota is the "peer group" to which the comparison is being made. Discrepancies between expected and actin sales occur for a variety of reasons. Proximity to larger population centers, management, marketing, and transportation patterns are just a few factors that can cause the retail sales of a particular town to deviate substantially from expected sales. It is important that decision-makers consider these influences when constructing policies, plans, or projects. The surplus or leakage is expressed in dollars, percentages, and customer equivalents. The use of the analysis will dictate which measure best conveys the information, though all are equivalen In the case of leakages, the dollar amount is usually the easiest to use since it immediately conveys the potential sales for new businesses. Trade Area Population Gain or Loss The trade area population gain or loss translates the percentage amount of surplus or leakage of retail sales into an estimate of th number of customers gained or lost in the trade area. It is calculated by multiplying the percent surplus or leakage by the population estimate for the city or county. For example, if a city with 10,000 residents had a retail sales surplus of 20%, the trail area population gain would be 2,000. Adding this number to the city's population gives an estimate of the population size of the city's trade area. Page 3 Gross Sales Gross sales is a comprehensive measure of business activity, but readers should be aware that the numbers in this report are self- reported by holders of sales and use tax reports. Furthermore, the gross sales are not audited by the State of Minnesota. It is believed that the gross sales figures are generally reliable, but there is the possibility of distortions, especially in smaller cities where misreporting may have occurred. Misclassification Holders of sales and use tax permits select the North American Industry Classification System (NAILS) category that best fits their business. Regardless of who makes this classification, errors are occasionally made. Also, sometimes a business will start out as one type of business, but may evolve over time to a considerably different type of business. Misclassifications can distort sales among business categories, especially in smaller towns. For example, a furniture store that is classified as a general merchandise store, will under-report the sales in the furniture store category and over-report the sales in the general merchandise cateeorv. Suppressed Data The sales data for merchandise categories that have less than four reporting firms are not reported. This is a measure taken by most states to protect the confidentiality of sales tax permit holders. The sales for suppressed categories are placed into the miscellaneous category and are included in total sales. Consolidated Reporting Vendors doing business at more than one location in Minnesota have the option of filing a separate return for each location or filing one consolidated return for all locations. The consolidated return shows, for each business establishment, the sales made, tax due and location by city and county. Data for the establishments of consolidated filers are combined with data for single- location filers to produce the figures in this report. Occasionally consolidated reports may not be properly deconstructed and all the sales for a company may be reported for one town or city. Whenever misreporting is discovered, contacts are made with the Minnesota Revenue Department to clarify the situation Changes Between 2000 and 2003 For fiscal year 2003, the Minnesota Department of Revenue implemented two major changes to improve their reporting of sales and use tax data. First, they adopted a geo-coding system, which accurately identifies the location of all business reporting sales and use tax to the state rather than relying on the businesses' postal addresses. One effect of this change is a movement of sales between neighboring cities (and in some cases, counties) in the year 2003. Thus, in several of the suburbs of Minneapolis and St.Paul and in cities such as Hermantown, which is adjacent to Duluth, the data show large increases in retail sales between 2000 and 2003, a substantial portion of which is due to the re-coding of business location and not to actual growth in sales. The second change implemented by the Department of Revenue in 2003 was a shift from the Standard Industrial Classification system (SIC codes) to the North American Industry Classification System (NAILS codes). This switch does affect the comparability of the data series prior to 2000 with that of 2003 (and beyond), especially for merchandise categories. Overall retail and services sales are highly comparable over time. In many cases, the merchandise categories for the data prior to 2003 are very closely related to the new categories. For example, approximately 97% of the 2003 statewide sales in the general merchandise category were accounted for by firms also classified as general merchandise under the SIC system. In other cases, the correspondence is less straightforward. For example, only 56% of 2003 statewide sales in the Food and Beverage store category were accounted for by firms classified as Food Stores under the older classification system; 41 % of 2003 Food store sales were accounted for by fines previously categorized as Miscellaneous Retail. The NAILS system does provide greater detail and introduces some new sectors, such as Retail Electronics. Over time, these changes will improve the information available for retail trade analysis. For additional information, please see www.taxes.state.mn.us/taxes/legal~olicy/other_supporting_content/salesuse_%202003_statistics_introduction. shtml. Changes Starting in 2006 The Sales and Use Tax Statistics report for 2006 uses a slightly different methodology than in previous years. Rather than basing the report on the year in which sales were made (as was true in earlier reports), the 2006 report is based on when returns were processed. To best approximate the economic activity for calendar year 2006, this report includes all returns processed from February 2006 through January 2007. Returns are included in the report regardless of the date of sale. Page 4 Elk River Historical Trends by Merchandise Category Components of Change by NAILS 2003-2006 Comparison with Competing Centers Retail Trade Overview Trade Area Analysis -Expected Sales Summary -Retail Trade Category Descriptions Building Materials Includes retail establishments primarily engaged in selling lumber and other building materials; paint, glass, and wallpaper; hardware; nursery stock; and lawn and garden supplies. General Merchandise: Includes retail stores which sell a number of lines of merchandise, such as dry goods, apparel and accessories, furniture and home furnishings, small wares, hardware, and food. The stores included in this group are known as department stores, variety stores, general merchandise stores, catalog showrooms, warehouse clubs, and general stores. Food: This group is comprised of retail stores primarily engaged in selling food for home preparation and consumption. Apparel: Retail stores primarily engaged in selling clothing of all kinds and related articles for personal wear and adornment. Not included are establishments which meet the criteria for Department Stores even though most of their receipts are from the sale of apparel and apparel accessories. Pull Factors by Merchandise Category (1 of 3) 4.50 4.00 3.50 ` 3.00 0 ~ 2.50 ea ~ 2.00 a 1.50 1.00 0.50 0.00 Year -f-Building Materials General Merchandise -~E-Food ~ Apparel Pull Factors by Merchandise Category Elk River, 1990-2000 Building General Year Materials Merchandise Food Apparel 1990 1.42 NA 2.42 NA 1991 1.30 NA 2.19 0.04 1992 1.12 NA 1.98 0.25 1993 1.19 NA 1.66 0.25 1994 1.08 NA 2.02 0.12 1995 0.79 NA 2.12 0.19 1996 0.82 1.75 2.31 0.43 1997 NA NA NA NA 1998 3.62 1.68 2.18 0.20 1999 NA NA NA NA 2000 3.88 NA 2.48 0.19 Change, '90 to '00 172.70% NA 2.12% NA Change, '98 to '00 7.38% NA 13.73% -3.30% *Due to a change in how firms are categorized beginning with fiscal year 2003, only data through fiscal These pull factors are calculated using taxable sales. Although taxable sales do not capture the full extent of year 2000 are presented in this sales in stores with a large number of un-taxed goods, like grocery and apparel stores, these data are audits by the Minnesota Department of Revenue. Since sales tax laws apply statewide, all cities are compared on SBCtlon. the same basis. Page 5 The following tables and charts depict pull factors in Elk River from 1990 to 2000* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. 90 91 92 93 94 95 96 97 98 99 00 The following tables and charts depict pull factors in Elk River from 1990 to 2000* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Category Descriptions Furniture: This group includes retail 2.50 stores selling goods used for furnishing the home such as furniture, floor coverings, draperies, glass and 2.00 chinaware, domestic stoves, refrigerators, and other household electric and gas appliances. 0 1.50 R u_ Automotive: Establishments selling a 1.00 new and used automobiles, boats, recreational vehicles and utility trailers, 0 50 and motorcycles and . mopeds; dealers selling new automobile parts and accessories; and gasoline 0 00 service stations. . Eating & Drinking: This major group incudes retail establishments engaged in selling prepared food and drinks for consumption on the premises. Also included are caterers which serve prepared food other than at the place of business and lunch counters and refreshment stands selling prepared foods and drinks for immediate consumption. Pull Factors by Merchandise Category (2 of 3) • ''. a' ---X ~~ -. -----• 90 91 92 93 94 95 96 97 98 99 00 Year -~ Furniture Automotive ~~ Eating & Drinking t Misc. Retail Pull Factors by Merchandise Category Elk River, 1990-2000 Eating & Year Furniture Automotive Drinking Misc. Retail Miscellaneous Retail: This category 1990 0.23 1.20 0.98 0.82 includes retail establishments not 1991 0.22 1.23 0.99 0.76 elsewhere classified. These establishments fall into the following 1992 0.21 1.20 0.82 0.63 categories: liquor stores; used 1993 0.24 1.31 0.88 0.61 merchandise stores; miscellaneous 1994 0.25 1.35 0.85 0.86 shopping goods stores; nonstore 1995 18 0 1 42 0 86 1 36 retailers, fuel dealers, florists, cigar . . . . stores and stands, news dealers and 1996 0.17 1.45 0.77 0.68 newsstands, and miscellaneous retail 1997 NA NA NA NA stores not elsewhere classified. 1998 0.25 1.10 1.01 0.73 1999 NA NA NA NA 2000 0.21 1.31 1.14 2.31 Change, '90 to '00 -5.01 % 8.89% 17.03% 180.60% Change, '98 to'00 -15.63% 18.79% 12.61% 215.69% *Due to a change in how firms are categorized beginning with fiscal year 2003 only data through fiscal These pull factors are calculated using taxable sales. Although taxable sales do not capture the full extent of , sales in stores with a large number of u n-taxed goods, like gr ocery and apparel stores, these data are audited year 2000 are presented in this by the Minnesota Department of Revenue. Since sales tax laws apply statewide, all cities are compared on the S@CtlOn. same basis. Page 6 The following tables and charts depict pull factors in Elk River from 1990 to 2000* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Category Descriptions Lodging: Includes establishments engaged in providing lodging, or lodging and meals, and camping facilities. Personal Services: includes establishments primarily engaged in providing services generally to individual; such as barber and beauty shops, drycleaning plants, laundries, and photographic studios. Business Services: Incudes establishments primarily engaged in providing services, not elsewhere classified, to business establishments on a contract or fee basis. Automobile Services: Includes establishments primarily engaged in furnishing automotive repair, rental, leasing, parking, and other services. 1.80 1.60 1.40 1.20 0 1.00 u_ 0.80 a 0.60 0.40 0.20 0.00 Pull Factors by Merchandise Category (3 of 3) .~ X ,~ r~ _ _._• ----~-'~ ~ _X , 90 91 92 93 94 95 96 97 98 99 00 Year f-Lodging Personal Services ~~Business Services (Automobile Services Amusement & Recreation Pull Factors by Merchandise Category Elk River, 1990-2000 Personal Business Automobile Amusement & Year Lodging Services Services Services Recreation Amusement and Recreation: This 1990 0.55 0.57 0.27 0.63 1.06 group includes establishments primarily 1991 0 58 51 0 32 0 67 0 1 07 engaged in providing amusement, . . . . . recreation, or entertainment services, not 1992 0.35 0.58 0.34 0.59 0.95 elsewhere classified. 1993 0.36 0.69 0.11 0.69 0.88 1994 0.36 0.69 0.19 0.91 0.91 1995 0.34 0.78 0.19 0.92 0.91 1996 0.30 0.92 0.18 1.08 0.51 1997 NA NA NA NA NA 1998 0.28 1.06 0.17 1.25 0.46 1999 NA NA NA NA NA 2000 0.45 1.17 0.27 1.55 0.56 Change, '90 to'00 -19.43% 106.24% 0.85% 144.59% -47.53% Change, '98 to '00 56.87% 10.99% 64.56% 23.44% 20.24% *Due to a change in how firms are categorized beginning with fiscal These pull factors are calculated using taxable sales. Altho ugh taxable sales do not capture the full extent of sales in year 2003, only data through fiscal stores with a large number of un-taxed goods, like grocery and apparel stores, these data are audited by the year 2000 are presented in this Minnesota Department of Revenue. Since sales tax laws apply statewide, all cities are compared on the same basis. section. Page 7 Pull Factor by NAICS Merchandise Category (1 of 2) N L ea LL a A !1!1 z.vv 3 50 . 3 00 . 2 50 . 2 00 . 1 50 . 1 00 . 0 50 - . 0 00 . Vehicles & Parts Furniture Elec- tronics Building Materials Food Health & Personal Gas Stations Apparel Leisure Goods ^ 2003 1.93 0.04 0.19 2.85 1.72 0.93 1.24 0.61 0.26 ^ 2004 1.68 0.08 0.13 2.54 1.53 0.97 1.24 0.56 0.32 ^ 2005 1.73 0.03 0.23 3.73 1.62 0.75 1.15 0.46 0.27 ^ 2006 1.60 0.03 0.20 3.48 1.52 0.78 1.24 0.40 0.28 NAICS Category Descriptions Motor Vehicles 8~ Parts: Establishments that sell new & used autos, boats, motorcycles, golf carts, RV's, campers, trailers, tires, and parts. Furniture: Stores that sell furniture, beds, carpeting, window coverings, lamps, china, kitchenware, & woodburning stoves. Electronics: Establishments primarily engaged in retailing household-type appliances, sewing machines, cameras, computers, and other electronic goods. Building Materials: Establishments that sell lumber, hardware, paint, wallpaper, tile, hardwood floors, roofing, fencing, ceiling fans, lawn equipment, garden centers, and feed stores. Food: Grocery stores, deli's, bakery, & butcher shops that sell food to be prepared at home. Liquor stores. Health & Personal: Pharmacies, food supplements, vision supplies, cosmetics, & hearing aid stores. Gas Stations: Retailers that sell fuel along with convenience store items. Apparel: New clothing and accessories, jewelry, shoes, bridal shops, clock shops, and luggage stores. Leisure Goods: Sporting goods, books, music, hobby stores, fabric shops, and toy stores. 'Caution should be used when comparing pull factors before 2003 to those in later years due to the switch from SIC to NAICS. Page 8 The following tables and charts depict pull factors in Elk River from 2003 to 2006" by NAICS category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Pull Factor by NAICS Merchandise Category (2 of 2) 4.50 -----_____ ___-- . ________ _ _..____ 4 00 . 3 50 . 3.00 0 ~ 2.50 ea 2 00 . ~ 1 50 a . 1 00 . 0 50 . 0.00 Gen. Misc. Store Non-Store Amuse- Lodging Eating & Repair Personal Merch. Retail ment Drinking Services ^ 2003 4.04 0.06 0.95 0.28 1.42 1.78 0.40 ^ 2004 2.80 1.97 0.07 0.33 0.26 1.24 1.57 0.30 ^ 2005 2.61 1.78 0.07 0.51 0.12 1.30 1.60 0.51 ^ 2006 2.68 1.69 0.11 0.29 1.17 1.49 0.68 NAICS Category Descriptions General Merchandise: Establishments that sell a mixed line of goods. Examples are department stores, supercenters, and dollar stores. Miscellaneous Store Retailers: Stores not covered in other categories such as florists, office supplies, pets, antiques, tobacco, art, used merchandise, and trophies. Non-Store Retail: Retailers that do not use stores. This includes mail order, Internet selling, bazaars, vending machines, fuel oil dealers, firewood dealers, door-to-door sales, and produce stands. Amusement: Establishments such as golf courses, bowling lanes, marinas, amusement parks, water parks, shooting ranges, pool halls, horseback riding, ballrooms, health club facilities, ski hills, and casinos. Lodging: Seasonal resorts, hotels, boarding houses, bed & breakfast, campgrounds, RV parks. Eating 8~ Drinking: Restaurants, donut shops, coffee house, cafeteria, caterers, taverns, and nightclubs, Repair: Businesses that return equipment to working order. Examples: cars, lawnmowers, small engines, knives, shoes, computers, furniture, and appliances. Personal Services: Barbers, beauty salons, tanning facilities, funeral homes, laundromats, dry cleaners, pet groomers, kennels, and photo finishing. *Caution should be used when comparing pull factors before 2003 to those in later years due to the switch from SIC to NAICS. Page 9 The following tables and charts depict pull factors in Elk River from 2003 to 2006* by NAICS category. Pull factors are a measu trade area size that provide a useful measure of changes over time because they account for changes in population and state-w industry trends. Elk River Components of Change, 2003 to 2006 Vehicles & Parts $11,943,269 $14,432,100 +$2,488,831 +20.84% Furniture Stores $203,949 $238,915 +$34,966 +17.14% Electronics $1,307,283 $1,855,823 +$548,540 +41.96% Building Materials $53,567,503 $82,981,748 +$29,414,245 +54.91 Food, Groceries $17,412,777 $18,548,503 +$1,135,726 +6.52% Health, Personal Stores $1,722,907 $1,732,572 +$9,665 +0.56% Gasoline Stations $4,988,030 $4,270,896 -$717,134 -14.38% Apparel $1,475,680 $1,475,233 -$447 -0.03% Leisure Goods $1,259,807 $1,674,039 +$414,232 +32.88% General Merchandise Stores NA $63,499,558 NA NA Miscellaneous Retail $30,863,933 $15,086,944 -$15,776,989 -51.12% Accomodations $1,322,492 NA NA NA Eating & Drinking $28,844,438 $32,143,560 +$3,299,122 +11.44% Total Retail and Services Sales $172,629,797 $257,902,035 +$85,272,238 +49.40% Figures not adjusted for inflation. Dollar Changes by Category (in Millions) 2003 to 2006 +$3.30 -$0.00 +$0.41 NA NA -$0.72 -$15.78 Parts Furn. Elec. BIdg.Mat Food Health Gas St. Cloth Leis. GenMer. Misc. Hotel Eat Page 10 $1,600.0 $1,400.0 $1,200.0 $1,000.0 $800.0 $600.0 $400.0 $200.0 Gross Retail 8~ Service Sales (in millions) $0.0 -~ 90 93 96 99 02 05 Fiscal Year ~ Elk River -jE- Maple Grove Pull Factors 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 90 93 96 99 02 05 Fiscal Year Coon Rapids _•.- Rogers Information about competing trade centers can provide a useful means of comparison when assessing a community's retail trade sector. Comparison towns were selected based on geographic proximity, relative size and availability of data. Some caution is warranted in the interpretation of these comparisons however, since retail sales data is provided for only a limited number of towns and cities. Comparison with Competing Trade Centers, 2006 Pull Taxable Per Capita Factor Gross Sales Sales Number of Taxable (Taxable Town Population ($millions) ($millions) Firms Sales Sales) Coon Rapids 62,207 $1,411.84 $695.38 1,017 $11,179 1.16 Maple Grove 60,584 $1,425.62 $674.17 1,167 $11,128 1.16 Rogers 6,277 $433.64 $201.28 175 $32,066 3.34 Page 11 ,•~ -_ X ~.~~•~• a '~ . ~' ;~ ~~_ ., ...._ Total Taxable and Gross Retail Sales The table below presents gross and taxable retail and services sales for Elk River from 1990 through 2006. Taxable sales in Elk River increased 229.1 percent from 1996 to 2006, while the number of firms rose 12.6 percent. Statewide, taxable sales increased 59.4 percent over the same time period and the number of firms rose 7.9 percent. The per capita sales and pull factor data in this table are based on taxable sales, the more verified sales measure. The table also presents sales data in constant 2006 dollars. These figures have been adjusted for inflation to reflect their value in 2006. For example, in 1990, taxable sales in Elk River totaled $40.34 million, an amount worth $62.06 million in 2006 dollars. In constant dollars, gross sales grew 89.1 percent between 1996 and 2006. Constant dollar taxable sales increased 156.7 percent over the same time period Current Dollars Constant 2006 Dollars Year Estimated Population Gross Sales* Taxable Sales Gross Sales* Taxable Sales Number Per Capita Pull ($millions) ($millions) ($millions) ($millions) of Firms Sales Factor 1990 11,220 $114.37 $40.34 $175.95 $62.06 299 $3,595 0.82 1991 11,963 $105.44 $41.84 $155.06 $61.53 335 $3,497 0.80 1992 12,543 $101.29 $41.48 $144.69 $59.25 352 $3,307 0.68 1993 13,123 $114.99 $43.50 $159.71 $60.41 350 $3,314 0.66 1994 13,597 $162.75 $55.23 $219.93 $74.63 389 $4,062 0.74 1995 14,173 $181.59 $62.20 $238.93 $81.85 403 $4,389 0.77 1996 14,874 $246.81 $78.37 $316.42 $100.47 427 $5,269 0.79 1997 15,577 NA NA NA NA NA $0 NA 1998 16,172 $344.22 $132.59 $424.97 $163.69 452 $8,199 1.18 1999 16,975 NA NA NA NA NA $0 NA 2000 16,447 $441.62 $161.59 $513.51 $187.90 480 $9,825 1.29 2001 17,318 NA NA NA NA NA $0 NA 2002 18,170 NA NA NA NA NA $0 NA 2003 18,783 $381.25 $172.63 $418.96 $189.70 407 $9,191 1.03 2004 20,224 $472.73 $220.47 $502.90 $234.54 460 $10,901 1.18 2005 21,367 $557.95 $261.61 $575.21 $269.70 482 $12,244 1.29 2006 22,285 $598.21 $257.90 $598.21 $257.90 481 $11,573 1.20 10 yr hange '96 to '06 49.8% 142.4% 229.1 % 89.1 % 156.7% 12.6% 119.7% 53.1 3 yr Change '03 to 'O6 18.6% 56.9% 49.4% 42.8% 36.0% 18.2% 25.9% 17.0% `Gross sales figures are self-reported by firms and not audited by the Dept. of Revenue for accuracy. $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $0.0 $Millions Total Sales: Gross vs. Taxable Gross Sales: Current$ vs. Constant$ $Millions $700.0 .----- $600.0 $500.0 - $400.0 ~ ~ $300.0 $200.0 , $100.0 $0.0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 OS 06 Year Constant $ f Current $ Page 12 +Taxable Sales f Gross Sales 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 Year The following tables provide information on retail sales by merchandise category. "Expected sales" is a standard to which actual performance is compared. In calculating expected sales, population, income, and typical "pulling power" characteristics are taken into account. Expected sales can be used as a guideline or "par value" in analyzing retail strength. Deviations from these norms can be analyzed to first judge whether they should be considered relevant. If the differences appear to be significant (whether in dollar amounts or relatively with percentages), additional consideration is merited. Categories with undesirable performance may be further examined for potential corrective action. It is also important to determine whether or not the situation is relatively uncontrollable due to external or extenuating circumstances. In cases of favorable differences from expectations, the positive aspects should be identified and built upon. Trade Area Analysis by Merchandise Category, 2006 Variance Between Actual & Expected Expected Actual Trade Area Percent of Sales Sales In Dollars As % of Pop. Gain or Number Total Merchandise Group ($millions) ($millions) (millions) Expected Loss of Firms Sales Vehicles & Parts $6.54 $14.43 +$7.gg +120.5% 26,859 18 5.6% Furniture Stores $2.36 $0.24 -$2.12 -89.9% -20,027 6 0.1% Electronics $1.23 $1.86 +$0.63 +51.5% 11,467 7 0.7% Building Materials $17.40 $82.98 +$65.58 +377.0% 84,004 12 32.2% Food, Groceries $9.85 $18.55 +$8.69 +88.2% 19,664 9 7.2% Health, Personal Stores $1.77 $1.73 -$0.03 -2.0% -438 11 0.7% Gasoline Stations $2.93 $4.27 +$1.34 +45.6% 10,165 8 1.7% Apparel $1.02 $1.48 +$0.46 +45.2% 10,072 15 0.6% Leisure Goods $1.42 $1.67 +$0.25 +17.6% 3,912 19 O.ti% General Merchandise Stores $25.93 $63.50 +$37.57 +144.9% 32,290 5 24.6% Miscellaneous Retail $9.19 $15.09 +$5.90 +64.3% 14,318 66 5.8% Amusement & Recreation $2.22 $1.70 -$0.53 -23.6% -5,268 10 0.7% Accomodations $4.08 NA NA NA NA NA NA Repair, Maintenance $3.10 $6.74 +$3.64 +117.5% 26,179 33 2.6% Personal Services, Laundry $1.39 $2.38 +$0.99 +71.5% 15,925 41 0.9% Total Taxable Retail & Service $106.74 $257.90 +$151.16 +141.6% 31,561 481 100.0% *All retail and service categories are included in Total Sales, including some categories not shown. Therefore, the merchandise groups shown here generally will not sum to Total Sales. Page 13 The chart below depicts the percentage amount Elk River's acutal sales were above or below expected sales in 2005 by merchandise group. Of the 15 merchandise categories with reported data, sales in 12 of the categories were above what would be expected based on the performance in similar-sized Minnesota towns. The strongest merchandise group by this standard is the Building Materials category, which has a 377 percent surplus. Overall, Elk River had a retail sales surplus of 141.6 percent in 2006. It is important to note that variations in a town's relative retail performance may occur for a variety of reasons, some of which are beyond the control of local policy. Proximity to larger population centers, management, marketing, and transportation patterns are just a few factors that can cause the retail sales of a particular city to deviate substantially from expected sales. It is important that decision-makers consider these influences when constructing policies, plans, or projects. Percentage Above or Below Expected Sales, 2006 Vehicles & Parts Furniture Stores Electronics Building Materials Food, Groceries Health, Personal Stores Gasoline Stations Apparel Leisure Goods General Merchandise Stores Miscellaneous Retail Amusement 8~ Recreation Accomodations Eating 8~ Drinking Places Repair, Maintenance Personal Services, Laundry Total Taxable Retail 8~ Service 89.9%- ..: _ ~ 120.5%+ 51.5%+ ~~ 377.0%+ 88.2%+ 2.0%- ~: 45.6%+ 45.2%+ 17.6%+ 144.9%+ ~~ 64.3%+ 23.6%- NA 75.4%+ 117.5%+ 71.5%+ 141.6%+ -200% -100% 0% 100% 200% 300% 400% 500% Page 14 SherUurne County Historical Trends by Merchandise Category Components of Change by NAILS 2003 to 2006 ~. Comparison with Competing Centers Retail Trade Overview Trade Area Analysis -Expected Sales Summary -Retail Trade Retail Trade Surplus or Leakage The following tables and charts depict pull factors in Sherburne County from 1990 to 2000* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Category Descriptions Building Materials: Incudes retail establishments primarily engaged in selling lumber and other building materials; paint, glass, and wallpaper; hardware; nursery stock; and lawn and garden supplies. General Merchandise: Includes retail stores which sell a number of lines of merchandise, such as dry goods, apparel and accessories, furniture and home furnishings, small wares, hardware, and food. The stores included in this group are known as department stores, variety stores, general merchandise stores, catalog showrooms, warehouse clubs, and general stores. Food: This group is comprised of retail stores primarily engaged in selling food for home preparation and consumption. Apparel: Retail stores primarily engaged in selling clothing of all kinds and related articles for personal wear and adornment. Not incuded are establishments which meet the criteria for Department Stores even though most of their receipts are from the sale of apparel and apparel accessories. `Due to a change in how firms are categorized beginning with fiscal year 2003, only data through fiscal year 2000 are presented in this section. Pull Factors by Merchandise Category (1 of 3) 1.60 1.40 1.20 `0 1.00 .. v ~ 0.80 a' 0.60 0.40 0.20 0.00 Year -Building Materials General Merchandise ~~ Food f-Apparel Pull Factors by Merchandise Category Sherburne County, 1990-2000 Building General Year Materials Merchandise Food Apparel 1990 1.08 NA 0.79 0.03 1991 1.05 NA 0.74 0.02 1992 1.17 0.17 0.74 0.07 1993 1.23 0.17 0.62 0.12 1994 1.00 0.14 0.64 0.07 1995 0.61 0.11 0.43 0.07 1996 0.65 0.49 0.81 0.15 1997 NA NA NA NA 1998 1.36 0.46 0.76 0.07 1999 NA NA NA NA 2000 1.37 0.42 0.80 0.06 Change, '90 to'00 27.12% NA 1.67% 120.80% Change, '98 to'00 1.01% -8.81% 5.11% -17.81% These pull factors are calculated using taxable sales. Although taxable sales do not capture the full extent of sales in stores with a large number of un-taxed goods, like grocery and apparel stores, these data are audited by the Minnesota Department of Revenue. Since sales tax laws apply statewide, all cities are compared on the same basis. Page 15 90 91 92 93 94 95 96 97 98 99 00 Category Descriptions Lodging: Includes establishments engaged in providing lodging, or lodging and meals, and camping facilities. Personal Services: includes establishments primarily engaged in providing services generally to individual; such as barber and beauty shops, drycleaning plants, laundries, and photographic studios. Business Services: Includes establishments primarily engaged in providing services, not elsewhere classified, to business establishments on a contract or fee basis. Automobile Services: Includes establishments primarily engaged in furnishing automotive repair, rental, leasing, parking, and other services. 0.60 0.50 0.40 ~i 0.30 a 0.20 0.10 0.00 Pull Factors by Merchandise Category (3 of 3) Year f Lodging Personal Services ~~ Business Services -Automobile Services Amusement & Recreation Pull Factors by Merchandise Category Sherburne County, 1990-2000 Personal Business Automobile Amusement & Year Lodging Services Services Services Recreation Amusement and Recreation: This 1990 0.18 0.18 0.15 0.28 0.37 group includes establishments primarily 1991 20 0 19 0 15 0 28 0 38 0 engaged in providing amusement, . . . . . recreation, or entertainment services, not 1992 0.13 0.26 0.17 0.26 0.43 elsewhere Gassified. 1993 0.13 0.33 0.12 0.31 0.37 1994 0.13 0.31 0.11 0.34 0.36 1995 0.12 0.30 0.12 0.31 0.35 1996 0.12 0.38 0.13 0.40 0.18 1997 NA NA NA NA NA 1998 0.12 0.42 0.09 0.49 0.18 1999 NA NA NA NA NA 2000 0.15 0.49 0.11 0.56 0.13 Change, '90 t0'00 -12.14% 168.20% -21.97% 99.38% -64.07% Change, '98 to '00 23.21 % 18.10% 23.27% 14.33% -26.90% *Due to a change in how firms are categorized beginning with fiscal year 2003, only data through fiscal These pull factors are calculated using taxable sales. Although taxable sales do not capture the full extent of sales in year 2000 are presented in this stores with a large nu mber of un-taxed goods, like grocery and apparel stores , these data are audited by the Section. Minnesota Department of Revenue. Since sales tax laws a pply statewide, all cities are compared on the same basis. Page 16 The following tables and charts depict pull factors in Sherburne County from 1990 to 2000* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. 90 91 92 93 94 95 96 97 98 99 00 The following tables and charts depict pull factors in Sherburne County from 1990 to 2000"' by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Category Descriptions Furniture: This group incudes retail stores selling goods used for furnishing the home such as furniture, floor coverings, draperies, glass and chinaware, domestic stoves, refrigerators and other household electric and gas appliances. Automotive: Establishments selling new and used automobiles, boats, recreational vehicles and utility trailers, and motorcycles and mopeds; dealers selling new automobile parts and accessories; and gasoline service stations. Eating 8~ Drinking: This major group includes retail establishments engaged in selling prepared food and drinks for consumption on the premises. Also included are caterers which serve prepared food other than at the place of business and lunch counters and refreshment stands selling prepared foods and drinks for immediate consumption. Miscellaneous Retail: This category includes retail establishments not elsewhere classified. These establishments fall into the following categories: liquor stores; used merchandise stores; miscellaneous shopping goods stores; nonstore retailers, fuel dealers, florists, cigar store: and stands, news dealers and newsstands, and miscellaneous retail stores not elsewhere Gassified. "Due to a change in how firms are categorized beginning with fiscal year 2003, only data through fiscal year 2000 are presented in this section. Pull Factors by Merchandise Category (2 of 3) 1.40 1.20 1.00 0 ~ 0.80 eo u_ 3 0.60 a 0.40 0.20 0.00 -f-Furniture Automotive -Eating & Drinking tMisc. Retail Pull Factors by Merchandise Category Sherburne County, 1990-2000 Eating & Year Furniture Automotive Drinking Misc. Retail 1990 0.09 0.71 0.49 0.36 1991 0.11 0.64 0.52 0.33 1992 0.44 0.66 0.45 0.39 1993 0.50 0.76 0.46 0.34 1994 0.52 0.77 0.45 0.36 1995 0.48 1.03 0.46 0.43 1996 0.46 1.03 0.44 0.51 1997 NA NA NA NA 1998 0.54 1.18 0.43 0.29 1999 NA NA NA NA 2000 0.73 1.28 0.50 0.34 Change, '90 t0'00 689.32% 79.26% 0.97% -3.93% Change, '98 to '00 34.44% 8.76% 14.83% 19.80% These pull factors are calculated using taxable sales. Although taxable sales do not capture the full extent of sales in stores with a large number of un-taxed goods, like grocery and apparel stores, these data are audited by the Minnesota Department of Revenue. Since sales tax laws apply statewide, all cities are compared on the same basis. Page 17 90 91 92 93 94 95 96 97 98 99 00 Year Pull Factor by NAICS Merchandise Category (1 of 2) N L Q ~M+ ea a ~ un 1 60 . 1 40 . 1 20 . 1 00 ~" . 0 80 ~_- . 0 60 . 0 40 ,_~. ~' - . 20 0 ~~ , . 0 00 k :: e„ . V ehicles & Parts Furniture Elec- tropics Building Materials Food Health & Gas Personal Stations Apparel Leisure Goods ^ 2003 1.50 1.64 0.07 1.23 0.66 0.25 1.15 0.16 0.11 ^ 2004 1.46 1.51 0.05 1.02 0.66 0.26 0.88 0.15 0.12 ^ 2005 1.01 1.22 0.07 1.28 0.64 0.20 0.86 0.13 0.58 ^ 2006 0.85 0.99 0.06 1.16 0.69 0.22 0.85 0.12 ' 0.50 NAICS Category Descriptions Motor Vehicles 8~ Parts: Establishments that sell new & used autos, boats, motorcycles, golf carts, RV's, campers, trailers, tires, and parts. Furniture: Stores that sell furniture, beds, carpeting, window coverings, lamps, china, kitchenware, & woodburning stoves. Electronics: Establishments primarily engaged in retailing household-type appliances, sewing machines, cameras, computers, and other electronic goods. Building Materials: Establishments that sell lumber, hardware, paint, wallpaper, tile, hardwood floors, roofing, fencing, ceiling fans, lawn equipment, garden centers, and feed stores. Food: Grocery stores, deli's, bakery, & butcher shops that sell food to be prepared at home. Liquor stores. Health ~ Personal: Pharmacies, food supplements, vision supplies, cosmetics, & hearing aid stores. Gas Stations: Retailers that sell fuel along with convenience store items. Apparel: New clothing and accessories, jewelry, shoes, bridal shops, clock shops, and luggage stores. Leisure Goods: Sporting goods, books, music, hobby stores, fabric shops, and toy stores. *Caution should be used when comparing pull factors before 2003 to those in later years due to the switch from SIC to NAICS. Page 18 The following tables and charts depict pull factors in Sherburne County from 2003 to 2006* by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Pull Factor by NAICS Merchandise Category (2 of 2) 1.20 1.00 0.80 0 LL 0.60 a 0.40 0.20 0 00 . Gen. Merch. Misc. Store Non-Store Retail Amuse- ment Lodging Eating & Drinking Repair Personal Services ^ 2003 0.29 0.61 0.14 0.36 0.08 0.63 0.92 0.21 ^ 2004 0.77 0.75 0.14 0.18 0.09 0.57 0.96 0.18 ^ 2005 0.72 0.65 0.15 0.31 0.06 0.62 0.91 0.24 ^ 2006 0.75 0.57 0.13 0.21 0.06 0.57 0.83 0.30 NAICS Category Descriptions General Merchandise: Establishments that sell a mixed line of goods. Examples are department stores, supercenters, and dollar stores. Miscellaneous Store Retailers: Stores not covered in other categories such as florists, office supplies, pets, antiques, tobacco, art, used merchandise, and trophies. Non-Store Retail: Retailers that do not use stores. This includes mail order, Internet selling, bazaars, vending machines, fuel oil dealers, firewood dealers, door-to-door sales, and produce stands. Amusement: Establishments such as golf courses, bowling lanes, marinas, amusement parks, water parks, shooting ranges, pool halls, horseback riding, ballrooms, health club facilities, ski hills, and casinos. Lodging: Seasonal resorts, hotels, boarding houses, bed & breakfast, campgrounds, RV parks. Eating & Drinking: Restaurants, donut shops, coffee house, cafeteria, caterers, taverns, and nightclubs, Repair: Businesses that return equipment to working order. Examples: cars, lawnmowers, small engines, knives, shoes, computers, furniture, and appliances. Personal Services: Barbers, beauty salons, tanning facilities, funeral homes, laundromats, dry cleaners, pet groomers, kennels, and photo finishing. 'Caution should be used when comparing pull factors before 2003 to those in later years due to the switch from SIC to NAICS. Page 19 The following tables and charts depict pull factors in Sherburne County from 2003 to 2006" by merchandise category. Pull factors are a measure of trade area size that provide a useful measure of changes over time because they account for changes in population and state-wide industry trends. Sherburne County Components of Change, 2003 to 2006 Vehicles & Parts $36,943,310 $29,395,344 -$7,547,966 -20.43% Furniture Stores $36,965,638 $26,840,117 -$10,125,521 -27.39% Electronics $1,864,330 $2,292,943 +$428,613 +22.99% Building Materials $92,120,366 $105,378,654 +$13,258,288 +14.39% Food, Groceries $26,729,498 $32,029,680 +$5,300,182 +19.83% Health, Personal Stores $1,840,362 $1,843,342 +$2,980 +0.16% Gasoline Stations $18,361,987 $11,101,654 -$7,260,333 -39.54% Apparel $1,562,002 $1,660,720 +$98,718 +6.32% Leisure Goods $2,067,210 $11,174,274 +$9,107,064 +440.55% General Merchandise Stores $22,927,560 $67,789,581 +$44,862,021 +195.67% Miscellaneous Retail $18,662,533 $19,315,236 +$652,703 +3.50% Accomodations $1,556,888 $1,616,694 +$59,806 +3.84% Eating & Drinking Places $50.910.519 $59.679.734 +$8.769.215 +17.22% Total Retail and Services Sales $380,578,923 $452,024,918 +$71,445,995 +18.77% Figures not adjusted for inflation. Dollar Changes by Category (in Millions) 2003 - 2006 +$13.26 +$5.30 +$0.43 ....: ~ ~~ +$0.00 -$7.55 _$10.13 -$7.26 Parts Furn. Elect. Bldg. Food Health GasSt. Clothes Leis. GenMer. Misc. Hotel Eat Page 20 Gross Retail and Service Sales Pull Factors (in millions) 1 20 . $6 000 0 ~ - ' , . - . 1.00 ~ $5, 000.0 0.80 ~ _ _ •----- $4, 000.0 ~ 0.60 - - ~ - ' =X- - ~ s =~i $3,000.0 ~ - ",~ '~~ ,' 0.40 "~ __ $2,000.0 . ' •' 0.20 -- ------- --------- ----------- $1,000.0 ~..-~' .o- 90 93 96 99 02 05 9 0 93 96 99 02 05 Fiscal Year Fiscal Year ~ Sherburne County ~ Benton County - Stearns County ~ Anoka County ~- Isanti County --f- Wright County Comparison with Neighboring Counties, 2006 Pull Taxable Per Capita Factor Gross Sales Sales Number of Taxable (Taxable Town Population ($millions) ($millions) Firms Sales Sales) Sherburne County 84,995 $1,249.90 $452.02 1442 $5,318 0.55 Anoka County 327,005 $5,280.45 $2,317.35 5609 $7,087 0.74 Benton County 38,688 $811.50 $203.14 710 $5,251 0.55 Isanti County 38,576 $476.29 $204.34 717 $5,297 0.55 Stearns County 144,096 $3,371.78 $1,323.27 3366 $9,183 0.96 Wright County 114,787 $1,931.21 $674.74 2334 $5,878 0.61 Page 21 Total Taxable and Gross Retail Sales The table below presents gross and taxable retail and services sales for Sherbume County from 1990 through 2006. Taxable sales in Sherburne County increased 184.4 percent from 1996 to 2006, while the number of firms rose 53.1 percent. Statewide, taxable sales increased 59.4 percent over the same time period and the number of firms rose 7.9 percent. The per capita sales and pull factor data in this table are based on taxable sales, the more verified sales measure. The table also presents sales data in constant 2006 dollars. These figures have been adjusted for inflation to reflect their value in 2006. For example, in 1990, taxable sales in Sherburne County totaled $75.92 million, an amount worth $116.79 million in 2006 dollars. In constant dollars, gross sales grew 155.8 percent between 1996 and 2006. Constant dollar taxable sales increased 121.8 percent over the same time perio~ Current Dollars Constant 2006 Dollars Estimated Gross Taxable Year population Gross Sales* Taxable Sales Sales* Sales Number Per Capita Pull ($millions) ($millions) ($millions) ($millions) of Firms Sales Factor 1990 41,945 $186.08 $75.92 $286.28 $116.79 695 $1,810 0.41 1991 43,883 $170.17 $76.84 $250.26 $113.00 727 $1,751 0.40 1992 45,797 $196.48 $100.90 $280.69 $144.15 797 $2,203 0.46 1993 48,154 $221.64 $108.81 $307.84 $151.12 789 $2,260 0.45 1994 50,398 $267.29 $117.99 $361.20 $159.44 792 $2,341 0.43 1995 52,816 $252.43 $117.92 $332.14 $155.16 791 $2,233 0.39 1996 55,249 $381.08 $158.93 $488.56 $203.76 942 $2,877 0.43 1997 57,996 NA NA NA NA NA NA NA 1998 60,339 $497.53 $218.90 $614.23 $270.24 1,006 $3,628 0.52 1999 63,356 NA NA NA NA NA NA NA 2000 64,417 $645.57 $273.47 $750.66 $317.98 1,084 $4,245 0.56 2001 68,022 NA NA NA NA NA NA NA 2002 71,471 NA NA NA NA NA NA NA 2003 74,667 $758.66 $380.58 $833.69 $418.22 1,352 $5,097 0.57 2004 78,762 $856.02 $434.56 $910.66 $462.30 1,405 $5,517 0.60 2005 81,752 $971.72 $469.62 _ $1,001.77 $484.14 1,439 $5,744 0.60 2006 84,995 $1,249.90 $452.02 $1,249.90 $452.02 1,442 $5,318 0.55 10 yr Change '96 to'06 53.8% 228.0% 184.4% 155.8% 121.8% 53.1 % 84.9% 28.9% 3 yr Change '03 to'O6 13.8% 64.8% 18.8% 49.9% 8.1 % 6.7% 4.3% -3.1 *Gross sales figures are self-reported by firms and not audited by the Dept. of Revenue for accuracy $1,400.0 $1,200.0 $1,000.0 $800.0 $600.0 $400.0 $200.0 $0.0 SMilllons Total Sales Gross Sales SMllllons $1,400.0 $1,200.0 $1,000.0 $800.0 $600.0 $400.0 $200.0 $0.0 ~-Taxable Sales (Gross Sales Constant $ (Current $ Page 22 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 O6 Year 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 O6 Year The following tables provide information on retail sales by merchandise category. "Potential sales" is a standard to which actual performance is compared. In calculating potential sales, population and income characteristics are taken into account. Potential sales can be used as a guideline or "par value" in analyzing retail strength. Deviations from these norms can be analyzed to first judge whether they should be considered relevant. If the differences appear to be significant (whether in dollar amounts or relatively with percentages), additional consideration is merited. Categories with undesirable performance may be further examined for potential corrective action. It is also important to determine whether or not the situation is relatively uncontrollable due to external or extenuating circumstances. In cases of favorable differences from expectations, the positive aspects should be identified and built upon. Trade Area Analysis by Merchandise Category, 2006 Variance Between Actual & Potential Potential Actual Trade Area Percent of Sales Sales In Dollars As % of Pop. Gain or Number Total Merchandise Group ($millions) ($millions) (millions) Expected Loss of Firms Sales Vehicles & Parts $24.75 $29.40 +$4.65 +18.8% 15,966 47 6.5% Furniture Stores $19.53 $26.84 +$7.31 +37.4% 31,790 23 5.9% Electronics $25.62 $2.29 -$23.33 -91.0% -77,388 21 0.5% Building Materials $65.36 $105.38 +$40.02 +61.2% 52,044 39 23.3% Food, Groceries $33.32 $32.03 -$1.29 -3.9% -3,282 24 7.1% Health, Personal Stores $6.10 $1.84 -$4.25 -69.8% -59,293 17 0.4% Gasoline Stations $9.42 $11.10 +$1.68 +17.8% 15,124 21 2.5% Apparel $10.19 $1.66 -$8.53 -83.7% -71,138 28 0.4% Leisure Goods $16.19 $11.17 -$5.01 -31.0% -26,327 61 2.5% General Merchandise Stores $13.52 $67.79 +$54.27 +401.3% 341,120 11 15.0% Miscellaneous Retail $3.53 $19.32 +$15.78 +446.5% 379,530 228 4.3% Amusement & Recreation $16.05 $4.70 -$11.35 -70.7% -60,094 24 1.0% Accomodations $18.78 $1.62 -$17.16 -91.4% -77,677 8 0.4% Eating & Drinking Places $75.07 $59.68 -$15.39 -20.5% -17,424 112 13.2% Repair, Maintenance $12.41 $14.29 +$1.88 +15.1% 12,848 134 3.2% Personal Services, Laundry $9.62 $4.03 -$5.59 -58.1 % -49,400 113 0.9% Total Taxable Retail & Service $585.86 $452.02 -$133.84 -22.8% -18,676 1,442 100.0% *All retail and service categories are included in Total Sales, including some categories not shown. Therefore, the merchandise groups shown here generally will not sum to Total Sales. Page 23 The chart below depicts the percentage amount Sherburne County's acutal sales were above or below potential sales in 2006 by merchandise group. Of the 16 merchandise categories with reported data, sales in 7 of the categories were above what would be expected based on the county's population and income characteristics as well as statewide spending patterns. The strongest merchandise group by this standard is the Miscellaneous Retail category, which has a 446.5 percent surplus. Overall, Sherburne County had a retail sales leakage of 22.8 percent. It is important to note that variations in a county's relative retail performance may occur for a variety of reasons, some of which are beyond the control of local policy. Proximity to larger population centers, management, marketing, and transportation patterns are just a few factors that can cause the retail sales of a particular county to deviate substantially from potential sales. It is important that decision-makers consider these influences when constructing policies, plans, or projects. Percentage Above or Below Potential Sales, 2006 Vehicles 8~ Parts := 18.8%+ Furniture Stores :: 37.4%+ Electronics 91.0%- Building Materials 61.2%+ Food, Groceries 3.9%- Health, Personal Stores 69.8%- Gasoline Stations ~ 17.8%+ Apparel 83.7%- Leisure Goods 31.0%- General Merchandise Stores ~: 401.3%+ Miscellaneous Retail 446.5%+ Amusement 8~ Recreation 70.7%- Accomodations 91.4%- Eating 8~ Drinking Places 20.5%- Repair, Maintenance :15.1%+ Personal Services, Laundry 58.1%- Total Taxable Retail 8~ Service 22.8%- -200% -100% 0% 100% 200% 300% 400% 500% Page 24 Fiscal Year Population Estimate Index of Income Potential Sales (in millions) Actual Sales (in millions) Surplus or Leakage (in millions) Surplus or Leakage as % of Potential Trade Area Population Gain or Loss 1990 41,945 0.81 $149.1 $75.9 -$73.2 -49.1% -20,595 1991 43,883 0.82 $157.2 $76.8 -$80.4 -51.1 % -22,437 1992 45,797 0.81 $179.3 $100.9 -$78.4 -43.7% -20,026 1993 48,154 0.82 $197.9 $108.8 -$89.1 -45.0% -21,684 1994 50,398 0.81 $224.4 $118.0 -$106.4 -47.4% -23,900 1995 52,816 0.81 $243.1 $117.9 -$125.2 -51.5% -27,200 1996 55,249 0.81 $298.2 $158.9 -$139.2 -46.7% -25,799 1997 57,996 0.80 NA NA NA NA NA 1998 60,339 0.81 $338.5 $218.9 -$119.6 -35.3% -21,319 1999 63,356 0.78 NA NA NA NA NA 2000 64,417 0.81 $395.8 $273.5 -$122.4 -30.9% -19,913 2001 68,022 0.80 NA NA NA NA NA 2002 71,471 0.79 NA NA NA NA NA 2003 74,667 0.79 $526.2 $380.6 -$145.6 -27.7% -20,666 2004 78,762 0.76 $550.6 $434.6 -$116.1 -21.1 % -16,601 2005 81,752 0.74 $574.9 $469.6 -$105.3 -18.3% -14,974 2006 84,995 0.72 $585.9 $452.0 -$133.8 -22.8% -19,416 Page 25 It is important to review the retail performance for the whole county and not just the town, in isolation. For example, it is common for county seat towns to have above-average retail performance, while the county overall has a leakage of sales. This is usually because the county seat town doesn't have the critical mass of retail to attract the purchases of everyone in the county. By analyzing county data, town business people can develop strategies to recapture some of the sales being lost to other towns. For counties that have a local option sales tax, the analysis of county sales is extremely important, since lost sales are lost tax dollars. A thorough analysis of county sales can help county officials develop more meaningful economic development plans aimed at recapturing the lost sales. The table below shows retail sales and number of firms by merchandise category for Elk River and Sherburne County in 2006. Elk River accounted for 33 percent of the county's firms and 57 percent of the county's sales at the time. Share of County Sales 43% 57% ~ Elk River ^ Rest of Sherburne County Sales by Merchandise Category, Elk River & Sherburne County, 2006 Elk River Sherburne County City's Share of County Total Taxable Taxable Sales Number of Sales Number of Merchandise Category ($millions) Firms ($millions) Firms Sales Firms Vehicles & Parts $14.43 18 $29.40 47 49.1 % 38.3% Furniture Stores $0.24 6 $26.84 23 0.9% 26.1 Electronics $1.86 7 $2.29 21 80.9% 33.3% Building Materials $82.98 12 $105.38 39 78.7% 30.8% Food, Groceries $18.55 9 $32.03 24 57.9% 37.5% Health, Personal Stores $1.73 11 $1.84 17 94.0% 64.7% Gasoline Stations $4.27 8 $11.10 21 38.5% 38.1 Apparel $1.48 15 $1.66 28 88.8% 53.6% Leisure Goods $1.67 19 $11.17 61 15.0% 31.1 General Merchandise $63.50 5 $67.79 11 93.7% 45.5% Miscellaneous Retail $15.09 66 $19.32 228 78.1 % 28.9% Non-Store Retailers $0.56 19 $2.60 71 21.5% 26.8% Amusement & Recreation $1.70 10 $4,70 24 36.1 % 41.7% Accomodations NA NA $1.62 8 NA NA Eating & Drinking Places $ Repair, Maintenance $6.74 33 $14.29 134 47.2% 24.6% Personal Service, Laundry $2.38 41 $4.03 113 59.1 % 36.3% Total Sales* $257.90 482 $452.02 1,439 57.1 % 33.5% Page 26 Elk River & Sherburne County Comparison Tables and Top Tapestry Segments r y_ ~ M N O> 0) ~ O r V V M N V N O O cD r O~ M N ~O (D ~ r M M M r M ~ M V' a ~ O ~ N a k a V 0 0 0 0 0 0 0 0 0 0 0 0 ~ 0 0 0 ~ 0 t0 ~ ~ G ' ~ ti c c~ jp y r V r rn eD ~ O W 07 O O r N~ O~ M O V N G ~j N 4) O ~ M r ~ N~ t0 V M N O O r V O V ~ `m O '~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 If1 m ~ a~ N ~ w o r v ao v (O O N fD M CO r M v ~n u~ co fO N rn V Q1 oD r r O O O ll') a0 a, • Q m ~ 0 0 ~ 0 0 0 0 O O O O O O M O N O ~ 0 0 ~ ~ ~ ~ ~ aj$ ~ 01 m (O O O O O r V O N (D O r a0 M V' ~_ ~ O~ r rn v V O m O r o0 r a0 ~ M r N M 0 `p G= O O .- O O O O O O ~ O O O ~ O O O N O CO ~ O m W ~ m d O N~ N N GO t G N GO ~ ~ N 0 0 0 o n o 0 o L J ~ m e0 00 V 6) N r M O O O V Y7 10 00 V (D O M l0 M `^ y~ O y M M N O .- 0 0 O ~ ~ O (O ~ ~ N r O 0 0 0 0 0 0 ~ 0 0 0 ~ 0 i(1 ~ ~~ O m ~ d ~ O V' r oD O (fl ~ V N~ N O O r 0 O O N ~o U V V N (D M N N O M r 0 0 0 OD M ~ M r ~,.~ ~ w ~ y O O ~ O M O O O ~ O O ~ ~ ~ N O ~ ~ O ~ ~ m g ° y o ~~ M ~ ~ N O O N O M 00 O N CO o0 N M 00 O r O N O E x ` y c ~ ~ ~ ~- ~- o ~ o o ri ~ o L ~ w O ~ ~ c O CV ~ a t a ° ' ~ r ~ a O ~n ao r r ao co ~ O M ~ O N O _ _ N rn v rn r v r N N o N 0 0 0 ~ 0 cD ~ oO N v 0 o ~ ~ y 0 3 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 1+1 H ~ ~. 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The information on this page only includes businesses in Retail Trade and does not include service sectors. The retail trade sectors include the following: building materials, motor vehicles & parts, apparel, food stores, electronics, convenience stores, leisure goods, health stores, furniture, general merchandise, non-store retail, and miscellaneous stores. State of Minnesota Per Capita Taxable Retail Sales 8r; Threshold Levels for Selected Goods and Services 2006 Threshold level refers to the number of people per business ,which can be used as a general guide for determining the "critical mass" necessary to support a business. These are broad averages for the state as a whole and do not reflect differences in income, tourism, agglomeration, establishment, etc. Further, the business counts are based on the number of sales tax returns filed and are converted to'Yull- time equivalents." Multiplying people per business by sales per capita yields average sales per firm. In addttion to state averages, averages for the non-metropolttan regions were calculated by excluding the seven county Minneapolis-St. Paul metropolttan region. Business Activity /Store Type People Per Business Sales Per Capita State Non-Metro State Non-Metro Elk River RETAIL TRADE 441 Vehicles, Parts 1,692 1,336 $405.69 $371.79 $647.61 442 Furniture Stores 1,928 2,233 $320.24 $202.94 $10.72 443 Electronics 2,419 3,243 $420.00 $191.39 $83.28 444 Building Materials 1,943 1,514 $1,071.46 $980.91 $3,723.66 445 Food and Beverage Stores 1,343 1,197 $546.18 $469.23 $832.33 446 Health, Personal Stores 3,728 4,226 $99.93 $50.99 $77.75 447 Gasoline Stations 2,326 1,797 $154.51 $174.66 $191.65 448 Clothing &Accessory Stores 1,322 1,757 $166.99 $102.89 $66.20 451 Leisure Goods 1,122 1,105 $265.39 $166.51 $75.12 452 General Merchandise 4,295 3,514 $1,061.39 $1,019.25 $2,849.43 453 Miscellaneous Merchandise 283 275 $401.33 $291.19 $677.00 454 Non-store Retail 976 1,110 $235.37 $76.19 $25.17 Retail Total $5,148.47 $4,097.94 $9,259.91 INFORMATION 511 Publishing Industry 10,112 38,712 $26.09 $2.35 512 Movie & Recording Industry 15,197 70,593 $18.84 $8.48 515 Broadcasting 33,122 80,005 $147.90 $3.24 517 Telecommunications 6,100 11,010 $633.87 $450.26 518 Internet Service 6,022 34,785 $66.87 $1.32 519 Other Information Services 2,775 3,941 $218.01 $58.05 FINANCE AND INSURANCE NA 522 Credit Intermediation 5,767 8,001 $51.15 $6.05 523 Securities, Commodities 26,096 218,195 $2.18 $0.08 524 Insurance Carriers 8,375 24,744 $2.33 $0.35 525 Funds, Trusts 135,976 NA $6.21 NA REAL ESTATE AND RENTAL AND LEASING 531 Real Estate 2,817 5,543 $26.71 $14.42 532 Rental, Leasing Services 2,428 3,609 $320.78 $83.23 533 Lessors Nonfinancial Assets 397,469 NA $1.40 NA PROFESSIONAL, SCIENTIFIC, AND TECHNICAL SERVICES 541 Prof, Scientific, Technical Services 489 888 $237.92 $65.39 551 Mgmt Of Companies 22,466 171,439 $15.77 $0.83 ADMINISTRATIVE 8 SUPPORT; WASTE MGMT 8 REMEDIATION SVCS 561 Admin, Support Services 507 602 $14.64 $117.73 562 Waste Mgmt, Remediation 15,899 21,820 $10.51 $0.33 EDUCATIONAL SVCS; HEALTH 8~ SOCIAL ASSISTANCE 611 Educational Services 5,310 6,957 $14.64 $13.12 621 Health -Ambulatory Care 1,584 1,956 $10.51 $8.08 622 Health -Hospitals 38,275 120,008 $13.18 $6.62 623 Health -Nursing,Home Care 13,562 15,001 $1.53 $1.16 624 Health -Social Assistance 14,041 28,237 $2.59 $2.25 ARTS, ENTERTAINMENT 8 RECREATION 711 Performing Art, Spectator Sports 5,377 11,321 $46.21 $3.30 712 Museums, Historical Sites 36,134 114,293 $3.38 $0.33 713 Amusement, Gambling, Recr 2,369 1,982 $263.19 $139.47 ACCOMODATION 8 FOOD SERVICE; 721 Accomodation 2,094 1,192 $307.82 $277.88 $34.10 OTHER SERVICES 811 Repair, Maintenance 588 439 $203.49 $196.30 812 Personal, Laundry Service 665 579 $157.78 $48.94 TOTAL RETAIL AND SERVICES $9,604.43 $6,645.69 Page 30 Minnesota Taxable Sales per Capita Trend ®2003 ^ 2004 ^ 2005 ^ 2006 Misc. Store Gen. Merchandise Leisure Goods Apparel Gas Stations Health & Personal Food Building Materials Electronics Furniture Vehicles & Parts Page 31 0 200 400 600 800 1000 1200 Elk River Top Tapestry Segments Segment 06 Sophisticated Squires '~:...."~= ' ~ Sophisticated Squires residents enjoy cultured country living in newer home developments with low density and a median home value of $268,921. These urban escapees are primarily married-couple families, educated, and well employed. They prefer to commute to maintain their semi-rural lifestyle. The median age is 38.3 years. They do their own lawn and landscaping work as well as home improvement and remodeling projects such as installing carpet or hardwood floors and interior painting. They like to barbeque on their gas grills and make bread with their bread-making machines. This is the top market for owning three or more vehicles. Vehicles of choice are minivans and full-sized SUVs. Family activities include playing volleyball, bicycling, playing board games and cards, going to the zoo, and attending soccer and baseball games. Segment 12 Up and Coming Families •~=.<,, . ~" Up and Coming Families represents the second highest household growth market and, with a median age of 31.9 years, is the youngest of Community Tapestry's affluent family markets. The profile for these neighborhoods is young, affluent families with young children. Approximately half of the households are concentrated in the South, with another half in the West and Midwest. Neighborhoods are located in suburban outskirts of midsized metropolitan areas. The homes are newer, with a median value of $213,306. Because family and home priorities dictate their consumer purchases, they frequently shop for baby and children's products and household furniture. Leisure activities include playing softball, going to the zoo, and visiting theme parks (generally SeaWorld or Disney World). Residents enjoy watching science fiction, comedy, and family-type movies on DVD. Segment 26 Midland Crowd .. ~Y. Approximately 11.9 million people represent Midland Crowd, Community Tapestry's largest market. The median age of 37 is similar to the US Median. Most households are composed ofmarried-couple families, half with children and half without. The median household income is $50,462. Housing developments are generally in rural areas throughout the United States (more village or town than farm), mainly in the South. Home ownership is at 83 percent. Two-thirds of households are single-family structures; 28 percent are mobile homes. This is a somewhat conservative market politically. These do-it-yourselfers take pride in their homes, lawns, and vehicles. Hunting, fishing, and woodworking are favorite pursuits. Pet ownership, especially birds or dogs, is common. Many households have a satellite dish, and TV viewing includes various news programs as well as shows on CMT and Outdoor Life Network. Page 32