ANALYSIS OF RETAIL TRENDS AND TAXABLE …agecon.okstate.edu/faculty/publications/3619.pdf ·...
Transcript of ANALYSIS OF RETAIL TRENDS AND TAXABLE …agecon.okstate.edu/faculty/publications/3619.pdf ·...
AE-09133
ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR LAWTON, OKLAHOMA AND COMANCHE COUNTY
Lara Brooks, Extension Assistant, OSU, Stillwater
(405) 744-4857
Marty New, Ext. Ed. Agr./4-H. and CED, OSU, Lawton (580) 735-2252
Stan Ralstin, Area Community Development Specialist, OSU, Enid
(580) 237-7677
Dave Shideler, Extension Economist, OSU, Stillwater (405) 744-6170
OKLAHOMA COOPERATIVE EXTENSION SERVICE OKLAHOMA STATE UNIVERSITY
December 2009
Analysis of Retail Trends And Taxable Sales For Lawton and Comanche County, Oklahoma
Lara Brooks Dave Shideler Extension Assistant Extension Economist Room 526, Ag. Hall Room 323, Ag. Hall Oklahoma State University Oklahoma State University Stillwater, OK 74078-6026 Stillwater, OK 74078-6026 [email protected] [email protected] Marty New Stan Ralstin Ext. Ed. Agr./4-H and CED Area Ext. Comm. Dev. Specialist Box 180, 1001 N. Hoy 316 E. Oxford Lawton, OK 73501-4326 Enid OK 73701-1335 [email protected] [email protected] ABSTRACT
The goal of this paper is to provide an analysis of taxable sales for the community of Lawton and Comanche County. Basic data is used to provide estimates of trade area capture and pull factors. Reported sales tax data is also used to analyze trends in the county and area.
"Oklahoma State University, in compliance with Title VI and VII of the Civil Rights Act of 1964, Executive Order 11246 as amended, Title IX of the Education Amendments of 1972, Americans with Disabilities Act of 1990, and other federal laws and regulations, does not discriminate on the basis of race, color, national origin, sex, age, religion, disability, or status as a veteran in any of its policies, practices or procedures. This includes but is not limited to admissions, employment financial aid, and educational services."
"Readers may make verbatim copies of this document for non-commercial purposes by any means."
1
ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR LAWTON, OKLAHOMA AND COMANCHE COUNTY
INTRODUCTION
Oklahoma communities have been concerned with all aspects of economic development
for the past several years. Creating new jobs and additional income is of concern to rural
communities and urban areas alike. Often, retailing is viewed as a "service" sector dependent on
the "basic" sectors such as oil, manufacturing, and agriculture. Export sectors produce goods and
services sold outside the local or regional economy. Service sectors tend to circulate existing
local dollars rather than attracting "new" outside dollars. The retail sector is important, though,
as retail activity reflects the general health of a local economy. Retail sales also produce sales
tax dollars that support municipal service provision. Many local communities are promoting a
"shop at home" campaign to keep local retail dollars in the community. It will not be possible to
stop all out-of-town spending or sales leakage for a local economy. Opportunities for
improvement do frequently exist, however. Key areas can be identified for improvement.
Analysis of retail trends can identify emerging trade centers. Local leaders in Lawton requested
the following taxable sales analysis. The specific objectives of the study are:
1. Utilize reported sales tax data to analyze trends in the county and area.
2. Provide estimates of trade area capture and market attraction.
3. Provide estimates of market attraction, broken out by SIC code.
2
METHODOLOGY AND DATA SOURCES
A trade area analysis model frequently used is "trade area capture." Trade area capture is
calculated by dividing the city's retail sales by state per capita retail sales. The figure is adjusted
by income differences between the state and relevant local area. The specific equation utilized
is:
Where: TACc=Trade Area Capture by city, RSc=Retail Sales by city, RSs=Retail Sales for the state, Ps=State Population, PCIc=Per Capita Income by county, and PCIs=Per Capita Income for the state.
Trade area capture figures incorporate both income and expenditure factors, which may
be influencing retail trade trends. An underlying assumption of the trade area capture estimate is
that local tastes and preferences are similar to that of the state as a whole. If a trade area capture
estimate is larger than city population then two explanations are possible: 1) the city is attracting
customers outside its boundaries or 2) residents of the city are spending more than the state
average.
Trade area capture figures can be utilized to estimate the amount of sales going to outside
consumers. To do this, a pull factor, which is a measure of an economy's retail sales gap, is
derived using trade area capture figures and city population:
Where: PFc=City Pull Factor, and Pc=City Population.
PCIPCIX
PRS
RS=TAC
S
C
S
S
CC
PTAC = PF
C
CC
3
A pull factor of 1.0 means the city is drawing all its customers from within its boundaries
but none from the outside. A pull factor of 1.50 means the city is drawing non-local customers
equal to 50 percent of the city population. A pull factor of less than one means the city is not
capturing the shoppers within its boundaries or they are spending relatively less than the state
average. This is considered leakage of retail sales or a retail sales gap. Additional discussion of
trade area capture and pull factors can be found in the references cited in this report (Barta and
Woods; Harris; Stone and McConnon; Hustedde, Shatter, and Pulver). The Oklahoma
Cooperative Extension Service has been conducting pull factor/gap analysis and sales tax
analysis since 1991 (Woods, 1991).
City pull factors and trade area capture figures are calculated for fiscal years 1980
through 2008. Data used were sales tax returns as reported by the Oklahoma Tax Commission.
These figures do not include all retail sales (only taxable sales) in an area but provide a proxy.
Population data were obtained from the Oklahoma State Data Center and were consistent with
figures from the1980, 1990, and 2000 Census. Income figures were taken from Bureau of
Economic Analysis estimates for counties. Similar income data for cities were not available so
county income was used as a proxy.
IMPORTANT: readers should note that BEA continually updates its estimates—
sometimes for all years back to 1969, which was the case with a recently released data set.
These updates affect the values for trade area capture and pull factors. Because of this, trade
area capture and pull factor values in this report will differ slightly from values previously
published in older versions of this report, if applicable.
4
TAXABLE SALES ANALYSIS
Sales tax returns as reported by the Oklahoma Tax Commission for Lawton are listed in
Table 1 for the fiscal years 1980 to 2008. Sales tax returns are important to a city because they
reflect the general health of a local economy and also represent significant revenue for the city
budget. When considering these numbers, one should keep in mind that sales occurring on Fort
Sill Military Reservation are not subject to state and local sales taxes and are therefore excluded
from this analysis. In FY 2008, Lawton collected over $34 million in sales tax at a tax rate of
3.25% for 8 months and 3.63% for 4 months. This translates into more than $1 billion in retail
sales. This is an increase from 2007 when Lawton collected just over $31 million in sales tax
collections at a rate of 3.25%, meaning $963 million in retail sales. Sales are estimated from the
sales tax returns and the sales tax rate that is reported. Figure 1 plots estimated taxable sales in
both actual dollars and inflation-adjusted dollars. The Consumer Price Index is used to adjust for
inflation. When taxable sales have been adjusted for inflation, Figure 1 shows that “real” sales
have remained fairly constant since 1980. In recent years, 2003 to 2008, “real” sales appear to
be slightly increasing.
Table 2 lists trade area capture figures for Lawton from 1980 to 2008. Lawton’s trade
area capture has ranged from 100,634 in 1993 to 88,179 in 2002. Lawton’s trade area capture for
2008 is 92,390. This means that in 2008 Lawton “captured” the retail sales of 92,390 persons.
Lawton’s trade area capture did slightly decrease from 2007 to 2008 even though the sales tax
collections were higher. This is due to state spending averages. Even though retail sales were
higher in Lawton, the trade area capture was affected by relatively higher growth in statewide
retail expenditures. Figure 2 presents a graphic of these same trade area capture figures. Table 2
also displays population figures for Lawton from 1980 to 2008. There shows a sharp increase in
population from 1999 to 2000. This is due to the annexation of Fort Sill in mid 1998. The
5
portion of Fort Sill that is included in the Lawton population was not included in population
counts until the 2000 Census. Therefore, with the annexation, the population increased nearly
13,000.
Table 3 lists pull factors for Lawton for the years 1980 to 2008. The pull factor for
Lawton ranges from 1.187 in 1997 to 0.980 in 2002. Lawton’s pull factor is currently about
1.009. The interpretation is that Lawton is capturing a number of shoppers that is equal to 1.009
times its own population.
Table 3 also shows pull factors for cities and towns in Comanche County with a reported
sales tax. Figure 3 plots these pull factors. Lawton, Elgin, and Medicine Park all post pull
factors above 1.0 for 2008. However, after considering population and level of retail activity,
Lawton does emerge as the retail trade center of Comanche County. Medicine Park did post the
highest pull factor in 2008 of 1.485. This is the highest pull factor for Medicine Park since 1999.
In smaller communities, small fluctuations in population or retail sales result in large fluctuations
in the pull factor. Elgin follows with a pull factor of 1.040. Elgin also experienced an increase
from 2007. Fletcher posted a pull factor of 0.482 in 2008. This is a decrease from 2007. Cache
and Chattanooga both posted a pull factor above 0.30. Both communities experienced a decrease
in their pull factors from 2007. Sterling and Indiahoma both posted pull factors below 0.30 in
2008; however, Sterling experienced a slight increase in their pull factor from 2007. Geronimo
posted a pull factor of 0.172 for 2008. Its pull factor has declined since 2005.
Figure 4 shows pull factors for 460+ cities that have sales tax return information
available. The pull factors are presented as a group average by city size. The highest pull factors
fall in the size categories 10,001 to 25,000 and 25,001 to 50,000 in population with the category
of 5,000-10,000 close behind. The smallest pull factors fall in the range for cities less than 1,000
in population. Figure 5 plots Lawton’s pull factor compared to other cities with population of
6
greater than 50,000. Lawton posts pull factors that are consistent with the average for other
cities of similar size.
7
Table 1 Tax Returns, Lawton, Oklahoma, FY 1980-2008
Year Collections Tax Rate Taxable Sales 1980 $6,343,831.00 2.00% $ 317,191,550.00 1981 $6,740,102.00 2.00% $ 337,005,100.00 1982 $7,797,859.00 2.00% $ 389,892,950.00
*1983 $5,939,860.00 (8) 2.00% $ 296,993,000.00 *1983 $4,049,703.00 (4) 3.00% $134,990,100.00
1984 $14,095,660.00 3.00% $ 469,855,333.33 1985 $14,817,003.00 3.00% $ 493,900,100.00 1986 $15,130,619.00 3.00% $ 504,353,966.67 1987 $15,034,547.00 3.00% $ 501,151,566.67 1988 $15,214,454.00 3.00% $ 507,148,466.67 1989 $15,089,581.00 3.00% $ 502,986,033.33 1990 $15,383,875.00 3.00% $ 512,795,833.33 1991 $15,565,975.00 3.00% $ 518,865,833.33 1992 $17,546,304.00 3.00% $ 584,876,800.00 1993 $18,297,859.00 3.00% $ 609,928,633.33
*1994 $12,678,955.00 (8) 3.00% $ 422,631,833.33 *1994 $3,941,998.00 (4) 2.00% $197,099,900.00 *1995 $8,523,347.00 (8) 2.00% $ 426,167,350.00 *1995 $6,180,688.00 (4) 3.25% $190,175,015.38
1996 $21,374,885.00 3.25% $ 657,688,769.23 1997 $21,556,609.00 3.25% $ 663,280,276.92 1998 $21,943,414.00 3.25% $ 675,181,969.23 1999 $23,013,590.00 3.25% $ 708,110,461.54 2000 $23,748,371.00 3.25% $ 730,719,107.69 2001 $24,764,442.00 3.25% $ 761,982,830.77 2002 $24,691,151.00 3.25% $ 759,727,723.08 2003 $25,544,450.00 3.25% $ 785,983,076.92 2004 $27,574,925.00 3.25% $ 848,459,230.77 2005 $28,420,945.00 3.25% $ 874,490,615.38 2006 $29,895,223.00 3.25% $ 919,853,015.38 2007 $31,298,984.00 3.25% $ 963,045,661.54
*2008 $21,950,436.00 (8) 3.25% $ 675,398,030.77 *2008 $12,236,184.00 (4) 3.63% $337,549,903.45
(*)
Data are for months of the year indicated in parentheses.
9
$0.00
$200,000,000.00
$400,000,000.00
$600,000,000.00
$800,000,000.00
$1,000,000,000.00
$1,200,000,000.00
Figure 1. Estimated Retail Sales for Lawton, OK, FY 1980-2008: Actual and Inflation-Adjusted
Actual Inflation-Adjusted
10
Table 2 Trade Area Capture Lawton, OK, in Comanche County
1980-2008
Year Trade Area Capture
Population
1980 88,587 80,054 1981 80,507 82,850 1982 89,567 85,650 1983 96,661 86,550 1984 93,381 86,800 1985 95,523 86,400 1986 98,031 84,300 1987 94,715 85,100 1988 95,800 85,250 1989 92,574 81,850 1990 91,493 80,881 1991 89,355 80,626 1992 97,155 86,482 1993 100,634 85,095 1994 99,661 84,700 1995 94,179 82,869 1996 96,778 82,571 1997 97,048 81,742 1998 95,564 81,199 1999 97,187 79,927 2000 94,349 92,563 2001 92,140 90,341 2002 88,179 89,975 2003 90,161 88,385 2004 96,811 91,354 2005 95,922 89,651 2006 91,791 90,517 2007 94,628 91,568 2008† 92,390 91,568
†
Values for 2008 should be considered preliminary since they rely on 2007 BEA data.
11
0
20,000
40,000
60,000
80,000
100,000
120,000
Figure 2. Trade Area Capture for Lawton, OK, FY 1980-2008
12
Table 3
Pull Factors for Cities and Towns in Comanche County, FY 1980-2008
Year Cache Chattanooga Elgin Fletcher Geronimo Indiahoma Lawton Medicine Park Sterling 1980 0.388 0.492 1.018 0.523 0.182 0.296 1.107 -- 0.390 1981 0.298 0.401 1.015 0.465 0.191 0.291 0.972 -- 0.366 1982 0.333 0.433 0.967 0.666 0.187 0.285 1.046 -- 0.516 1983 0.308 0.503 0.974 0.726 0.218 0.287 1.117 -- 0.597 1984 0.291 0.429 0.790 0.558 0.200 0.215 1.076 0.171 0.426 1985 0.317 0.622 0.874 0.475 0.221 0.244 1.106 0.237 0.418 1986 0.269 0.630 0.824 0.464 0.226 0.252 1.163 0.244 0.404 1987 0.244 0.550 0.803 0.395 0.218 0.266 1.113 0.220 0.384 1988 0.224 0.644 0.826 0.389 0.221 0.229 1.124 0.226 0.302 1989 0.226 0.611 0.744 0.404 0.228 0.301 1.131 0.215 0.345 1990 0.234 0.626 0.958 0.518 0.231 0.226 1.131 0.454 0.511 1991 0.235 0.540 1.021 0.545 0.203 0.222 1.108 0.436 0.457 1992 0.217 0.453 0.964 0.469 0.152 0.224 1.123 0.360 0.477 1993 0.225 0.756 1.094 0.492 0.173 0.203 1.183 0.472 0.439 1994 0.241 0.474 0.940 0.573 0.169 0.187 1.177 0.501 0.460 1995 0.230 0.564 1.023 0.563 0.160 0.221 1.136 2.331 0.445 1996 0.253 0.430 1.013 0.567 0.165 0.275 1.172 0.869 0.437 1997 0.259 0.431 1.036 0.603 0.157 0.221 1.187 1.029 0.461 1998 0.256 0.465 1.004 0.567 0.149 0.243 1.177 1.675 0.495 1999 0.260 0.349 1.015 0.618 0.151 0.222 1.216 1.617 0.442 2000 0.285 0.486 0.818 0.550 0.146 0.197 1.019 1.132 0.327 2001 0.263 0.472 0.926 0.601 0.174 0.239 1.020 1.020 0.348 2002 0.246 0.434 0.994 0.512 0.180 0.226 0.980 1.087 0.286 2003 0.306 0.366 0.963 0.520 0.177 0.248 1.020 1.070 0.290 2004 0.383 0.345 1.001 0.538 0.190 0.286 1.060 1.020 0.306 2005 0.403 0.380 0.961 0.628 0.221 0.278 1.070 1.331 0.283 2006 0.399 0.392 0.994 0.535 0.217 0.282 1.014 1.391 0.291 2007 0.397 0.369 0.993 0.533 0.214 0.320 1.033 1.421 0.260 2008 0.368 0.337 1.040 0.482 0.172 0.245 1.009 1.485 0.283
13
0.000
0.500
1.000
1.500
2.000
2.500
Figure 3. Pull Factors for Cities and Towns in Comanche County, FY 1980-2008
Lawton Cache Chattanooga Elgin FletcherGeronimo Indiahoma Medicine Park Sterling
14
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60Average Pull Factor by City Size, 1980-2008
Less than 1,000 1,000-5,000 5,000-10,00010,000-25,000 25,000-50,000 Greater than 50,000
15
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
Figure 5. Pull Factors for Lawton, OK and Other Towns with Population Greater than 50,000
Lawton Greater than 50,000
16
SALES GAP ANALYSIS FOR LAWTON, OK
For purposes of this study, a sales gap analysis refers to a pull factor study that has been analyzed
by SIC code for the 8 retail sectors. Sales gap coefficients may be interpreted in exactly the same
manner as are pull factors. Gap coefficients and trade area capture values will also vary from previous
years due to updated BEA and Census data. See Table 4 for Lawton’s sales gap analysis. Table 5
provides a detailed description of the 8 retail SIC categories. The reader is reminded that sales at the
Post Exchange are not included in these figures, even though the military personnel at Fort Sill are
counted in Lawton’s population.
For Lawton’s Building and Gardening Materials (SIC 52), the number of shoppers has overall
increased since 2003. The number was highest in 2004 at 99,869. Lawton’s current gap coefficient is
1.053 (see bottom half of Table 4). This is an increase from 2007. Lawton's population is about 91,568;
thus, in 2008, this sector was capturing a number of shoppers that was about 1.053 times the local
population. Lawton does have both a Lowe’s and Home Depot that possibly account for the large
number of annual shoppers in this sector.
The category of General Merchandise (SIC 53) tends to be dominated by Wal-Mart. Wal-Mart
reports all its sales under this category (even though it sells clothing, grocery items, etc. as well). In
general, towns that have a Wal-Mart will post sales gap coefficients that are greater than 1.0 for this
category, and those that do not have a Wal-Mart will post sales gap coefficients that are less than 1.0.
Lawton has two Wal-Mart Supercenters. It is not surprising, then, that Lawton had a sales gap
coefficient of 1.359 if FY 2008, though it has been declining since 2004.
Grocery stores (SIC 54) in Lawton had a gap coefficient of 0.582 in 2008. Consumers tend to
appreciate the convenience of shopping for groceries close to home; consequently, it is typical to find
that even very small towns post high gap coefficients (over 1.0) for this sector. However, since Lawton
17
has 2 Wal-Mart Supercenters and the Post Exchange outlets, it is accurate to assume that many grocery
expenditures are either be counted in SIC 53 or excluded from analysis.
SIC category 55 is difficult to interpret because motor vehicle and gasoline sales are exempt from
municipal sales tax in Oklahoma. Most of the sales tax collection reported under this category appears
to stem from auto parts stores and other retail sales from gas stations. For instance, most gas stations
sell snack items, tires, some auto parts, oil, anti-freeze, etc. Sales tax collections for Lawton in this
category indicate that these types of businesses attracted a number of shoppers equal to about 72.5% of
the local population. This number experienced a constant increase since 2007.
Apparel sales are reported under SIC 56. Many small towns have nearly zero sales in this
category, and it is common to see sales gap coefficients that are less than 0.10 in these towns. Cities
with large malls tend to be the most successful at capturing the market. However, Lawton is a
metropolitan area with a mall, so it is not surprising to see Lawton post a gap coefficient of 1.265 in
2008. This coefficient has decreased since 2004.
SIC 57 reports Furniture and Home Furnishings. Also included are appliance and electronics
stores, drapery and floor covering stores, and music stores. This category is often viewed from the
perspective that many furniture purchases are made in either Tulsa or Oklahoma City. Oklahoma City,
for example, has a large cluster of retail furniture stores centralized in one geographic area. Lawton area
residents do appear to purchase a large amount of furniture in Lawton. In 2008, Lawton posted a gap
coefficient of 0.779. While this is a slight decrease from 2007, this sector appears to have increased
since 2003. It can also be assumed that many residents still might be making some of their furniture
purchases in Oklahoma City or Texas.
Eating and Drinking Places, SIC 58, is one of the most straightforward retail sectors. It contains
restaurants and bars. Restaurants and bars in Lawton captured 93,584 customers in FY 2008.
18
Restaurants in Lawton tend to attract a number of shoppers that is equal to about 1.055 times the town’s
population. The sales gap coefficient for this sector has declined since 2005.
SIC 59, or Miscellaneous Retail, contains a host of retail activity, including pharmacies, florists,
liquor stores, and antique stores. These are often the downtown or “Main Street” merchants. In 2008,
Lawton attracted 84,960 shoppers in this category for a gap coefficient of 0.928. This is a slight
decrease from 2007.
19
Table 4 Retail Sales Gap Analysis by Standard Industrial
Classification (SIC) Code for Lawton, OK: Fiscal 2003-2008* FY
TRADE AREA CAPTURE 2003 FY
2004 FY
2005 FY
2006 FY
2007 FY
2008 Building, Gardening & Merchandise (52) 60,095 99,869 99,375 91,735 90,270 96,420 General Merchandise (53) 138,524 143,713 140,761 137,984 135,873 124,438 Food Stores (54) 58,596 50,617 43,722 52,408 52,721 53,333 Automobile Dealers & Gas Stations (55) 85,918 84,254 76,651 72,283 74,633 66,384 Apparel & Accessory Stores (56) 107,180 128,341 116,828 121,555 123,201 115,802 Furniture & Home Furnishings (57) 62,238 63,002 58,385 72,737 73,563 71,356 Eating & Drinking Places (58) 101,692 103,967 107,375 95,733 97,619 96,584 Miscellaneous Retail (59) 87,013 87,768 85,100 77,193 88,393 84,960
FY SALES GAP COEFFICIENT † 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
Building, Gardening & Merchandise (52) 0.680 1.093 1.108 1.013 0.986 1.053 General Merchandise (53) 1.567 1.573 1.570 1.524 1.484 1.359 Food Stores (54) 0.663 0.554 0.488 0.579 0.576 0.582 Automobile Dealers & Gas Stations (55) 0.972 0.922 0.855 0.799 0.815 0.725 Apparel & Accessory Stores (56) 1.213 1.405 1.303 1.343 1.345 1.265 Furniture & Home Furnishings (57) 0.704 0.690 0.651 0.804 0.803 0.779 Eating & Drinking Places (58) 1.151 1.138 1.198 1.058 1.066 1.055 Miscellaneous Retail (59) 0.984 0.961 0.949 0.853 0.965 0.928
* Trade area capture and gap coefficients can vary from previous years due to
updated BEA and Census data available.
† For purposes of this paper, when analyzed by SIC code, the pull factor is referred to as the sales gap coefficient.
20
TABLE 5 TYPES OF BUSINESSES
DESCRIBED BY THE RETAIL SIC CODES 52 Building Materials
Lumber yards including home centers 58 Eating and Drinking Places
Paint and wallpaper stores Glass stores Hardware stores Drug and proprietary stores
59 Miscellaneous Retail
Retail Nurseries Liquor Stores Lawn and garden supply stores Used merchandise stores including antique Mobile Home dealers stores and pawn shops
Sporting goods stores 53 General Merchandise Stores
Variety stores Stationary stores Book stores
Department stores Jewelry stores Warehouse clubs Hobby, toy, and game shops General combination merchandise stores Camera and photographic supplies stores
Gifts, novelties and souvenirs 54 Food Stores
Grocery stores (Supermarkets) Sewing, needlework, and piece goods stores Luggage and leather goods stores
Convenience stores both with and without gasoline Catalog and mail order sales (includes e- Meat and fish markets commerce stores) Fruit and vegetable markets Vending machine operators and direct selling Candy, nut and confectionery stores establishments Dairy stores Fuel oil dealers Retail Bakeries Bottled gas dealers
Florists 55 Automotive Dealers and Gasoline Service Stations
Motor vehicle dealers (new and used) Newsstands Tobacco Stores
Tire stores Optical goods stores Auto supply stores Cosmetic stores Gasoline stations Pet and pet supply stores Boat dealers Hearing aid and artificial limb stores RV dealers Art dealers Motorcycle dealers Telephone and typewriter stores
Men and boys apparel 56 Apparel and Accessory Stores
Women’s apparel and accessories Children and infant’s wear Family apparel Shoe stores Custom tailor and seamstresses
Furniture stores 57 Furniture and Home Furnishings Stores
Floor covering stores Drapery, curtains and upholstery stores Pottery and crafts made and sold on site Household appliance stores Radio and TV and consumer electronics stores Computer and computer software stores Record and prerecorded tapes stores Musical instruments stores
.
21
BUSINESS DEVELOPMENT STRATEGIES
Retail trade trends reflect the overall health of a local economy. All out shopping or sales
leakage cannot be stopped. Often, larger economic trends (State-National-Global) overwhelm
retail opportunities. There are programs and actions that can assist retail trade activities,
however.
Concerned leaders and business persons can focus on business development by forming a
business assistance committee to begin implementing some of the assistance activities or
working with the existing chamber of commerce. The following activities were in part of a retail
trade improvement program. These activities can improve the climate for business and show the
community's commitment to support local business.
1. Analyze the local business sector to identify needs and opportunities to be pursued by the
program
In addition to economic analysis, information is needed on the needs or problems of
individual businesses and of the business district as a whole. As needs are identified, action
can be taken to improve the situation. For example, a business may need help in preparing a
business plan to qualify for financing. Perhaps the appearance of buildings and vacant lots
is detrimental to attracting people to be business district, or perhaps poorly coordinated store
hours are a hindrance. Once these needs are identified, a business development program can
. Businesses often do not have the resources to study the economy (local, regional,
and national) and how they fit in. They need practical data and analysis that will help in
their individual business decision-making. In particular, economic analysis can identify
voids in the local or regional market that can possibly be filled by expanding or new
business. Examples of analysis include the pull factor analysis reported here and consumer
surveys to identify needs and opportunities.
22
initiate action. A periodic survey of local business needs can form the basis of a business
development program's work plan.
2. Provide management assistance and counseling to improve the efficiency and profitability of
local businesses
3.
. Many local businesses are owner-operated, earn low profits, and have
difficulty in obtaining financing. Businessmen often need additional education and training
in improving business management skills like accounting, finance, planning, marketing,
customer, relations, merchandising, personnel management, or tax procedures. This
assistance and counseling can be provided through seminars and one-to-one aid. Sources of
assistance include the Service Corps of Retired Executives (SCORE), Small Business
Development Center program sponsored by the Small Business Administration,
Universities, Technology Centers, Oklahoma Department of Commerce, and the
Cooperative Extension Service. The intent is to aid small businesses in becoming more
competitive.
Assist new business start-up and entrepreneurial activity
4.
by analyzing potential markets and
local skills and matching entrepreneurs with technical and financial resources. Establishing
a business incubator is another way to assist new businesses. An incubator is a building
with shed space or service requirements that reduce start-up costs for new businesses.
Incubators have been successful in many locations but are not the right answer for every
town. A successful incubator must have long-range planning, specific goals, and good
management in order to identify markets and entrepreneurs.
Promote the development of home-based enterprises. Home-based work by individuals is
increasing because of the flexibility offered and because in some areas, it may be the most
realistic alternative. Home-based enterprises can include a great variety of full or part-time
occupations such as food processing, quilting, weaving, crafts, clothing assembly, mail order
processing, or assembling various goods.
23
5. Provide assistance in identifying and obtaining financing
6.
. Small businesses often have
difficulty obtaining long-term bank financing for expansion because they lack assets to
mortgage, cannot obtain affordable terms or rates, or cannot present a strong business plan.
A business development program can identify public loan programs and package them with
private loans to make projects feasible.
Provide assistance in undertaking joint projects such as
• improved appearance
:
• improved management of the commercial area
• building renovation
• preparation of design standards
• joint promotions and marketing
• organizing independent merchants
• special activities and events
• fund raising
• improved customer relations
• uniform hours of operation
Undertaking these projects requires cooperation, good organization, and efficient
management. These projects can improve a business district's competitive position and
attract new customers. The Oklahoma Main Street Program provides many good examples
of towns working together for economic revitalization. The Main Street Program developed
by the National Trust for Historic Preservation, is build around the four points of
organization, design, promotion, and economic restructuring.
24
7. Develop a one-stop permit center
8.
. There is great deal of red tape involved in starting a
business including registering a name, choosing a legal form, and determining what licenses,
permits, or bonds are needed. Other concerns include internal revenue service requirements,
unemployment insurance, sales tax permits, and state withholding taxes. Having this type of
information available in one location will make life easier for potential businesses.
Involve active organizations and the media. Groups such as the chamber of commerce, civic
clubs, etc. can encourage a healthy business climate. The local media can also support small
business and aid in developing awareness of the importance of local business.
25
SUMMARY
This report has presented an analysis of taxable sales trends for the city of Lawton and Comanche
County. The level of taxable sales in Lawton has significantly increased in nominal terms since 1980.
After correcting for inflation, taxable sales have remained fairly constant. The value for inflation-
adjusted sales since 2003, however, appears to be increasing.
Lawton is the county seat of Comanche County. Therefore, Lawton does emerge as the center of
trade for Comanche County. Lawton is a metropolitan statistical area in southwestern Oklahoma. It is
also home to Fort Sill Military Reservation. Therefore, Lawton does have a larger population and a
substantial amount of retail activity. Lawton’s pull factor has consistently been above 1.0 since 2002.
Since Lawton has a larger population, fluctuations in the pull factor are not as common as it is with
smaller communities in Comanche County. Overall, Lawton’s pull factor is fairly consistent with cities
of similar size.
Lawton does have both Lowe’s and Home Depot stores; therefore, it is expected for the gap
coefficient in this sector (SIC 52) to be above 1. Lawton also has 2 Wal-Mart Supercenters, so it is
expected for Lawton to have a gap coefficient greater than 1 for SIC 53. The presence of the 2 Wal-
Mart Supercenters and Post Exchange affects the gap coefficient of grocery stores in Lawton. Lawton
does have a mall; therefore, apparel sales post a gap coefficient of above 1 as well. Eating and Drinking
places (SIC 58) attract many customers with a gap coefficient above 1.
Lawton does have a unique situation in terms of retail trade. Since Lawton is home to Fort Sill
Military Reservation, there is the possibility of many sales taking place on post at the Post Exchange that
are not included in this analysis because these sales are not subject to state and local sales taxes.
Therefore, community leaders will need to account for sales completed on post when examining retail
26
opportunities. Lawton is like other cities in terms of the possibility of out-shopping to larger cities such
as Oklahoma City and even cities in Texas.
27
REFERENCES
Barta, S.D. and M.D. Woods. Gap Analysis as a Tool for Community Economic Development WF 917, Oklahoma Cooperative Extension Service, Oklahoma State University,
<
.
http://agweb.okstate.edu/pearl/agecon/resource/wf-917.pdf>, 2000. Harris, Thomas R. "Commercial Sector Development in Rural Communities: Trade Area Analysis."
Hard Times: Communities in Transition
. Western Rural Development Center, WREP 90, September 1985.
Hustedde, R., R. Shatter, and G. Pulver, Community Economic Analysis: A How To Manual
. Ames, Iowa. North Central Regional Center for Rural Development, 1984.
Oklahoma Department of Commerce, Research and Planning Division. Population Estimates for State, Counties, and Cities, Oklahoma: April 1, 1980-July 1, 1989
. December 1990.
Oklahoma Tax Commission City Sales Tax Collections Returned to Cities and Towns in Fiscal, 1980 to 2006
. (Fiscal Year End-June 30)
Stone, K. and J.C. McConnon, Jr. "Trade Area Analysis Extension Program: A Catalyst for Community Development," Proceedings of Realizing Your Potential as an Agricultural Economist in Extension
. Ithaca, New York, August 1984.
Tennessee Valley Authority. "Focus on the Future," Workbook provided at RedArk Development Authority Symposium on Economic Development Leadership, Shawnee, Oklahoma, June 1986.
U.S. Department of Commerce Bureau of The Census. Resident Population by County, 1990 to 2005
. http://www.census.gov/populations/extimates/county/ (July 2006)
U.S. Department of Commerce, Bureau of Economic Analysis. "Personal Income by Major Source and Earnings by Major Industry," Regional Economic Information System, 1980 to 2004.
Woods, Mike D. Retail Sales Analysis in Oklahoma By County, 1977, 1982, 1987
. Bulletin B-801, Agricultural Experiment Station, Oklahoma State University, October 1991.