welch retail trade 2012

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AE-12012

ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FORWELCH, OKLAHOMA

Tari Lee, Craig County Extension Director, OSU, Vinita(918) 256-7569

Jack Frye, SE Area Development Specialist, Ada(580) 332-4100

Dave Shideler, Extension Economist, OSU, Stillwater(405) 744-6170

OKLAHOMA COOPERATIVE EXTENSION SERVICEOKLAHOMA STATE UNIVERSITY

March 2012


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Analysis of Retail Trends and Taxable Sales ForWelch, Oklahoma

Tari LeeCraig County Extension Director

210 W. Delaware Ste.107 CourthouseVinita, OK 74301-3628

[email protected]

Jack FryeSE Area Development Specialist

314 S. Broadway, Suite 101PO Box 1378

Ada, OK 74821-1378 [email protected]

Dave ShidelerExtension Economist

323 Ag HallOklahoma State UniversityStillwater, OK [email protected]

ABSTRACT

The goal of this paper is to provide an analysis of taxable sales for the community of Welch. Basic data is used to provide estimates of trade area capture and pull factors. Reportedsales 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 CivilRights Act of 1964, Executive Order 11246 as amended, Title IX of the EducationAmendments of 1972, Americans with Disabilities Act of 1990, and other federallaws and regulations, does not discriminate on the basis of race, color, nationalorigin, 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-commercialpurposes by any means."


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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:TAC c= 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, andPCIs= 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 stateaverage.

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, andPc= city population.

PCI

PCI X

P

RS

RS=TAC

S

C

S

S

C C

P

TAC =PF

C

C C


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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 a 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 2010. Data used were sales tax returns as reported by the Oklahoma Tax Commission.

These figures include only taxable sales in an area, but they provide a proxy for all retail sales.

Population data were obtained from the Oklahoma Department of Commerce and are consistent

with figures from the 1980, 1990, 2000, and 2010 Census. Income figures were taken from the

Bureau of Economic Analysis (BEA) 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 may differ slightly from values previously

published in older versions of this report.


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TAXABLE SALES ANALYSIS

Sales tax returns as reported by the Oklahoma Tax Commission for Welch are listed in

Table 1 for the fiscal years 1980 to 2010. 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. In FY 2010, Welch collected over $1,000,000 in sales tax at a tax rate of 3.5%. This

translates into $35.7 million in retail sales. This is a decrease from 2009 when Welch collected

over $1,120,000 in sales tax collections at the same rate, with $37.4 million in retail sales. The

state, along with many communities across the state, actually experienced a decline in retail sales

from FY 2009 to FY 2010. 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 slightly decreased since

1980, though they peaked during t he 1990s when Welch was home to an outlet shopping mall.

Inflation-adjusted retail sales have hovered between $10,000,000 and $15,000,000 since the

outlet mall was destroyed by a tornado in 1999.

Table 2 lists trade area capture (TAC) figures for Welch from 1980 to 2010. Welch s

trade area capture has ranged from 10,459 in 1994 to 3,764 in 2002. Ignoring the 1990s, Welch

has seen a decline in TAC since 1982 when TAC peaked at 5,504. Over the last decade, Welch s

TAC has increased from 3,364 in 2002 to 4,047 in 2010. This means that Welch is attracting a

population of shoppers equal to 4,047. This is an increase from 2009 when Welch captured

3,796 shoppers. This increase in TAC is two-fold. The state saw a decline in retail sales, and

while Welch s detail sales also declined, Welch s retail sales decline d less proportionately than

those of the state. These coupled effects both account for the increase in Welch s TAC. Figure 2


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presents a graphic of these same trade area capture figures. Table 2 also displays population

figures for Welch from 1980 to 2010. Welch s population has declined since 1980 by about 450

people. D uring the 1980s, Welch s population was estimated to have grown and then declined

to 2,900, but the 1990 Census had the population at 2,727. The population was estimated to

increase through the 1990s, but the 2000 Census measured Welch s population as nearly

constant 2,758. Slight decline was estimated during the 2000s and verified by the 2 010

Census; population was 2,690 in 2010.

Table 3 lists pull factors for Welch for the years 1980 to 2010. The pull factor for Welch

ranges from 1.23 in 2002 to 3.73 in 199 4; ignoring the 1990s, Welch s highest pull factor was

1.67 in 1982. With Welch s current pull factor of 1.5, the interpretation is that Welch is

capturing shoppers equal to 150% of the local population. Earlier, it was discussed that the trade

area capture increased due a decline in state sales. It was also mentioned earlier that Welch

experienced a decrease in their population from the 2009 population estimates to the 2010

Census count. These changes reinforce one another causing the pull factor to rise.

Table 3 also shows pull factors for cities and towns in Craig County with a reported sales

tax. Figure 3 plots these pull factors. Chandler currently posts the highest pull factor for Craig

County of 2.19. Also, this is the highest pull factor that Chandler has ever posted, though

Chandler realized this value in 1992 and 1993 as well. Prague follows Welch with the third

highest pull factor of 1.14. Wellstons current pull factor is 1.12. Wellston s pull factor has

been increasing since 1996, though Wellston hit a relative minimum in 2006 of 0.8. Prague, on

the other hand, has seen its pull factor decline since 2004. Meekers pull factor is 0.79, having

declined from its peak of 1.0 in 2004. All the other communities in Craig County have pull

factors equal to or less than 0.5.


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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 Welch s pull factor compared to other cities with population of

1,000-5,000. Welch has consistently posted higher pull factors than the average of cities of

similar size.


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Table 1Sales Tax Collections and Estimated Retail Sales for Welch, OK

FY 1980-2010

Year Months RateSales Tax

CollectionsEstimated Retail

Sales

Inflation-Adjusted

Retail Sales

1980 12 1.00% $17,107 $1,710,700 $1,710,7001981 12 1.00% $17,736 $1,773,600 $1,607,7521982 1-11 1.00%/2.00% $39,363 $2,064,250 $1,762,6341983 12 2.00% $38,687 $1,934,350 $1,600,3061984 12 2.00% $41,164 $2,058,200 $1,632,2971985 12 2.00% $47,117 $2,355,850 $1,804,1081986 12 2.00% $56,100 $2,805,000 $2,108,8691987 12 2.00% $50,803 $2,540,150 $1,842,5031988 12 2.00% $45,144 $2,257,200 $1,572,2171989 12 2.00% $43,307 $2,165,350 $1,438,9101990 12 2.00% $57,059 $2,852,950 $1,798,6461991 12 2.00% $54,889 $2,744,450 $1,660,3721992 12 2.00% $55,180 $2,759,000 $1,620,3961993 12 2.00% $54,657 $2,732,850 $1,558,3861994 12 2.00% $54,575 $2,728,750 $1,517,2001995 12 2.00% $53,316 $2,665,800 $1,441,3511996 12 2.00% $54,159 $2,707,950 $1,422,1481997 12 2.00% $52,735 $2,636,750 $1,353,6961998 12 2.00% $55,750 $2,787,500 $1,409,1411999 12 2.00% $60,940 $3,047,000 $1,507,0402000 12 2.00% $60,919 $3,045,950 $1,457,5282001 12 2.00% $67,437 $3,371,850 $1,568,8342002 12 2.00% $65,036 $3,251,800 $1,489,4292003 12 2.00% $67,096 $3,354,800 $1,502,3672004 12 2.00% $65,864 $3,293,200 $1,436,5262005 12 2.00% $59,716 $2,985,800 $1,259,7542006 12 2.00% $64,315 $3,215,750 $1,314,3742007 12 2.00% $67,967 $3,398,350 $1,350,5422008 12 2.00% $70,703 $3,535,150 $1,352,960

2009 12 2.00% $68,389 $3,419,450 $1,313,3522010 12 2.00% $61,458 $3,072,900 $1,161,202

Source: Oklahoma Tax Commission


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Table 2Trade Area Capture Welch, OK in Craig County

1980-2010Year Trade Area Capture Population1980 464.81 6971981 412.70 7001982 444.44 6501983 414.90 6501984 414.01 6501985 475.21 6501986 590.30 6501987 573.42 6501988 504.51 6501989 479.77 6001990 621.21 5491991 568.15 5511992 544.22 5571993 539.24 5601994 514.72 5691995 496.22 5701996 473.58 5801997 439.18 5871998 443.69 5861999 453.67 5882000 416.90 5972001 432.12 5852002 396.55 5842003 425.52 5872004 399.21 5882005 368.87 5962006 372.85 5972007 381.74 6032008 370.40 6032009 334.93 6052010 336.30 619


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0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

Figure 2. Trade Area Capture for Welch, OK 1980-2010


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Table 3Pull Factors for Cities and Towns in Creek County, FY 1980-2010

Year Big Cabin Bluejacket Ketchum Vinita Welch1980 1.6 1.5 1.311981 2.79 1.34 1.151982 2.08 0.01 0.01 1.53 1.131983 1.88 0.17 0.17 1.76 1.251984 2.15 0.21 0.21 1.56 1.261985 2.22 0.24 0.24 1.51 1.43

1986 2.54 0.22 0.22 1.53 1.291987 3.27 0.26 0.26 1.52 1.371988 3.14 0.3 0.3 1.29 1.491989 2.98 0.35 0.35 1.46 1.581990 2.9 0.54 0.54 2.4 1.731991 2.73 0.52 0.52 2.35 1.741992 2.74 0.53 0.53 2.11 1.721993 2.87 0.55 0.55 2 1.771994 2.76 0.52 0.52 1.76 1.71995 2.91 0.58 0.58 1.95 1.81996 2.55 0.5 0.5 1.92 1.721997 2.68 0.49 0.49 1.77 1.781998 2.78 0.55 0.55 1.93 1.691999 3.04 0.53 0.53 1.76 1.652000 2.77 0.31 0.31 1.72 1.412001 2.7 0.36 0.36 1.54 1.862002 2.73 0.29 0.29 1.62 1.352003 2.68 0.3 0.3 1.59 1.482004 2.44 0.26 0.26 1.45 0.162005 2.35 0.22 0.22 1.55 1.712006 2.38 0.25 0.25 1.43 1.652007 2.36 0.21 0.21 1.43 1.632008 2 0.22 0.22 1.15 1.622009 1.77 0.18 0.18 1.12 1.482010 1.96 0.18 0.18 0.91 1.63


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0

0.5

1

1.5

2

2.5

3

3.5

Figure 3. Pull Factors for Cities and Towns in Craig County,FY 1980-2010

Big Cabin Bluejacket Ketchum Vinita Welch


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6Figure 4. Average Pull Factors by City Size

Less 1,000 1,000-5,000 5,000-10,000 10,000-25,000 25,000-50,000 Grtr 50,000


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0

0.2

0.4

0.6

0.8

1

1.2

Figure 5. Pull Factors for Stroud, OK and Other Towns withPopulation Less Than 1,000

Welch Less 1,000


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SALES GAP ANALYSIS FOR WELCH, 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 Welch s sales gap analysis. Table 5

provides a detailed description of the 8 retail SIC categories.

For Welch s Building and Gardening Materia ls (SIC 52), the number of shoppers has increased

dramatically since 2006, having nearly doubled in the 5 years. The highest TAC was recorded in 2010

with 1,782 shoppers. Welch s current gap coefficient is 0.66 (see bottom half of Table 4). Therefore, in2010, this sector captured the sales of a population equal to 66% of the local population.

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 (especially a Wal-Mart Supercenter) 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. Welch does not have a Wal-Mart. While this sector has experienced

an increase in the number of shoppers attracted, the current gap coefficient for this sector is 0.35. This is

an increase from 2009, and it is the highest gap coefficient presented.

Grocery stores (SIC 54) in Welch had a gap coefficient of 3.44 in 2010. 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. The gap coefficient for

FY2010 is the highest value reported for this category.

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


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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 Welch in this

category indicate that these types of businesses attracted a number of shoppers equal to about 392% of

the local population. The highest gap coefficient posted in this sector was in 2010 with a 3.92 gap

coefficient.

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. Welch s current gap coe fficient

in this sector is 0.01. This is not uncommon for communities of Welch s size .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. In 2010,

Welch posted a gap coefficient of 0.4 in this sector. This is an increase from 2009, and the gap

coefficient has been growing since 2006.

Eating and Drinking Places, SIC 58, is one of the most straightforward retail sectors. It contains

restaurants and bars. Restaurants and bars in Welch captured 7,399 customers in FY 2010. Restaurants

in Welch tend to attract a number of shoppers that is equal to about 275% of the towns population.

This is a slight increase from 2009; however, this gap coefficient has remained above 2.4 since 2006.

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 20 10,

Welch attracted 1,566 shoppers in this category for a gap coefficient of 0.58. This is a slight decrease

from 2009, and the gap coefficient for this sector has been above 0.5 since 2007.


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Table 4Retail Sales Gap Analysis by Standard Industrial

Classification (SIC) Code for Welch, OK: Fiscal 2006-2010*TRADE AREA

CAPTUREFY

2006FY

2007FY

2008FY

2009FY

2010Building, Gardening &Merchandise (52) 49.03 63.1 34.2 78.7 190

General Merchandise(53) 17.53 13.9 21.3 25.7 10.6

Food Stores (54) 1520.65 1519 1590 1786 1706Automobile Dealers &Gas Stations (55) 94.72 89.2 50.7 140 117Apparel & AccessoryStores (56) 2.46 3.95 4.54 10.3 19.7Furniture & HomeFurnishings (57) 368.87 241 260 199 189Eating & DrinkingPlaces (58) 97.93 89 91.7 91.4 93.3Miscellaneous Retail

(59) 279.71 206 308 164 177SALES GAP

COEFFICIENT FY

2006FY

2007FY

2008FY

2009FY

2010Building, Gardening &Merchandise (52) 0.08 0.1 0.06 0.13 0.31General Merchandise(53) 0.03 0.02 0.04 0.04 0.02

Food Stores (54) 2.55 2.52 2.64 2.95 2.76Automobile Dealers &Gas Stations (55) 0.16 0.15 0.08 0.23 0.19Apparel & Accessory

Stores (56) 0 0.01 0.01 0.02 0.03Furniture & HomeFurnishings (57) 0.62 0.4 0.43 0.33 0.31Eating & DrinkingPlaces (58) 0.16 0.15 0.15 0.15 0.15Miscellaneous Retail(59) 0.47 0.34 0.51 0.27 0.29

* Trade area capture and gap coefficients can vary from previous years due to updated BEA andCensus data available.

For purposes of this paper, when analyzed by SIC code, the pull factor is referred to as the

sales gap coefficient.


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TABLE 5TYPES OF BUSINESSES

DESCRIBED BY THE RETAIL SIC CODES

52 Building MaterialsLumber yards including home centersPaint and wallpaper storesGlass storesHardware storesRetail NurseriesLawn and garden supply storesMobile Home dealers

53 General Merchandise StoresVariety storesDepartment storesWarehouse clubsGeneral combination merchandise storesGifts, novelties and souvenirs

54 Food Stores

Grocery stores (Supermarkets)Convenience stores both with and without gasolineMeat and fish marketsFruit and vegetable marketsCandy, nut and confectionery storesDairy storesRetail Bakeries

55 Automotive Dealers and Gasoline Service StationsMotor vehicle dealers (new and used)Tire storesAuto supply storesGasoline stationsBoat dealersRV dealersMotorcycle dealers

56 Apparel and Accessory StoresMen and boys apparelWomens apparel and accessoriesChildren and infants wear Family apparelShoe storesCustom tailor and seamstresses

57 Furniture and Home Furnishings StoresFurniture storesFloor covering storesDrapery, curtains and upholstery storesPottery and crafts made and sold on siteHousehold appliance storesRadio and TV and consumer electronics storesComputer and computer software storesRecord and prerecorded tapes storesMusical instruments stores

58 Eating and Drinking Places

59 Miscellaneous Retail

Drug and proprietary storesLiquor StoresUsed merchandise stores includingantique stores and pawn shopsSporting goods storesBook storesStationary storesJewelry storesHobby, toy, and game shopsCamera and photographic supplies storesLuggage and leather goods storesSewing, needlework, and piece goods stores

Catalog and mail order sales(includes e-commerce stores)Vending machine operators and direct sellingestablishmentsFuel oil dealersBottled gas dealersFloristsTobacco StoresNewsstandsOptical goods storesCosmetic storesPet and pet supply storesHearing aid and artificial limb storesArt dealersTelephone and typewriter stores


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.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 are 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. 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

businesses. Examples of analysis include the pull factor analysis reported here, threshold

analysis, and consumer surveys to identify needs and opportunities.

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 the business district, or perhaps poorly coordinated

store hours are a hindrance. Once these needs are identified, a business development


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program can 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. 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 programs 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.

3. Assist new business start-up and entrepreneurial activity 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.

4. 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 mostrealistic 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.


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5. Provide assistance in identifying and obtaining financing. 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.

6. 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 built around the four points of

organization, design, promotion, and economic restructuring.

7. Develop a one-stop permit center. There is great deal of red tape involved in starting a

business including registering a name, choosing a legal form, and determining what licenses,


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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.

8. 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.


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SUMMARY

This report has presented an analysis of taxable sales trends for the city of Welch. The level of

taxable sales in Welch has increased in nominal terms since 1980. After correcting for inflation, taxable

sales have decreased by almost 50%. However, retail sales in FY 2010 did decrease in both real and

nominal terms for Welch. This is similar to the trend experienced across the state and nation. The state

experienced a decline in retail sales from 2009 to 2010. Therefore, Welch s increase in their trade area

capture was partly due to a smaller decline in sales than that of the state for the same time period.

Welch also experienced an increase in their pull factor from 2009. In addition to the different trends in

sales, Welch experienced a slight decrease in their population from the 2009 estimates to the 2010Census count.

When examining the sector-level gap coefficients, Welch showed tremendous strength in several

sectors. Automobile Dealers and Gas Stations has a sales gap coefficient of 3.92, the citys highest. This

is likely due to Welch s location on I -44 and ability to capture that traffic. Food Stores were the next

highest sector at 3.44, followed by Eating and Drinking Places at 2.75. The Eating and Drinking Places

sales gap coefficient is also related to Welch s location on I -44. The remaining sectors all posted gap

coefficients were less than 1.0; given the higher order of the goods in these categories (i.e., goods in

these categories require larger markets), and Welch s access to Oklahoma City and Tulsa via I-44, these

values are not surprising.


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, 2000.

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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 to2010. (Fiscal Year End-June 30)

Stone, K. and J.C. McConnon, Jr. "Trade Area Analysis Extension Program: A Catalyst forCommunity Development," Proceedings of Realizing Your Potential as an Agricultural Economistin Extension. Ithaca, New York, August 1984.

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welch retail trade 2012

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