Iowa's Retail Almanac 1998-2008

This publication is intended as a resource for existing or potential business owners, community leaders, and economic development professionals to determine retail industry conditions are by category in Iowa. Data is represented in both tables and graphs and shows the last ten years performance in each retail or service business category. Using data from the Iowa Department of Revenue sales and use tax reports, calculations are made to determine the performance of each retail category. It is important to note that the figures in this report are based on taxable sales so within certain categories, for example grocery stores, sales may be underreported here due to the fact that the majority of grocery store sales are not taxable. Additionally, this report does report some businesses that pay a use tax so the figures in this report may not match those published annually in the Iowa State University Retail Trade Analysis Program's annual reports for Iowa's communities and counties. The figures included for each category include the number of businesses per category and the sales per business in real 2008 dollars (inflation adjusted). Trends in the number of businesses can identify which categories are growing or declining when analyzed with the average sales per firm. For example, if the number of businesses is increasing but the sales per firm are decreasing this might indicate that a category has become saturated. This phenomenon results from too much entry by new businesses which decreases sales per firm and most likely, profits per firm. If the sales per firm are increasing but the number of businesses are decreasing this indicates that the category is experiencing consolidation whereby large firms dominate and smaller firms exit the market. Consolidation is major structural change in a category and is becoming more common due to large big box retailers, population trends in rural areas, and the overall economic climate. If sales per firm and the number of businesses are both increasing this can indicate a category with growth potential and an inference can be made that there may be increasing consumer demand in this category. Also reported here are actual sales (nominal), real sales, and sales per capita which represent the amount the average Iowan spends in a particular category annually. Finally, a population threshold is reported for each retail and service category. The population threshold is the average population required to sustain a certain type of business. If the population threshold is 6,000 for a category that means on average, all other things being equal, a business of that type would be unsustainable in a community or area with less than 6,000 residents. Many retail and service categories are experiencing increasing population thresholds due to the consolidation of trade spatially as well as structurally.