Jaffrey Zafar Jr - Retail Sales Are an Important Indicator of Economic Growth

Why Retail Sales Are an Important Indicator of Economic Growth

Introduction ď ˝

City leaders employ numerous policies in an effort to develop their local economy. These policies have an array of targeted benefits, including attracting and retaining employers; increasing job numbers; raising incomes for residents; and, of course, expanding tax revenues.

Retail Sales Are an Important Indicator of Economic Growth    

ESTIMATING RETAIL DEMAND USING REPORTED SALES FIGURES CONSUMER EXPENDITURES MARKET SERVING INDEX SURVEYS OF INSTITUTIONALISED POPULATIONS

Gap Analysis Provides an Economic Development Benchmark ď ˝

The first thing that chamber professionals need to be concerned with is their trade area capture or TAC. This metric is an estimate of the number of people who have shopped in an area over the course of one year.

Deficit of Each Retail Sector ď ˝

With highly detailed information like this for each retail sector, the economic development team is given a picture of which markets are under served, which markets are over-served, and which markets should be adequately served, yet are under performing.

MARKET SERVING INDEX ď ˝

The goal of this type of analysis is to compare the proportions of certain types of retailers in the study area to those same proportions in the overall market. The assumption is made that retail activity should be proportionally the same in the study area with the overall market area.

SURVEYS OF INSTITUTIONALISED POPULATIONS ď ˝

Other cities have similar uncounted consumer groups including students, military personnel and tourists. These groups may have significant impacts on retail sales in the city.

Though not included in the Census data, we can still estimate the retail demand of these groups using survey research.

RETAIL DEMAND USING REPORTED SALES FIGURES ď ˝

The first method of retail market estimation uses a city's retail sales figures reported in the US Census Bureau's most recent Economic Census. Every 5 years, the Bureau sends surveys to American businesses in order to compile the Economic Census report on annual sales data.

Why It’s Important? ď ˝

The data from the Retail Sales Report is widely used by various government agencies, academic analysts and researchers, economists, businesses and investors. It is a component in the calculation of Gross Domestic Product, a key economic indicator.

Who I Am‌ ď ˝

Jaffrey Zafar jr is a Retail Sales Manager who provides the excellent customer services in the United States.