A little more retail
Since I am sure store closures is a story that will continue I took a look at some recent data regarding retail. It is also the case that my friend Richard Carpenter (whose blog I linked to in the past and you can find in the blogroll list) asked me about some of the numbers in this situation.
The Census Bureau released the December advanced retail sales report on January 13 (find the pdf of that report here, though I warn it you it looks like this is not a stable link). What did the report tell us about December retail sales? To start with, seasonally adjusted total retail and food services went up from November to December a paltry 0.6%, though comparing to last December saw a 4% increase, which is fairly healthy. Now the devil is in the details of course.
Breaking these numbers down a bit we get a little more insight into the decisions national department stores face. Looking again at the seasonally adjusted data, this time for department stores, we see a year-over-year percentage change of -7.92%. That is an enormous decline compared to a year ago. Sure you could maybe make the argument that last year was a banner year, or something like that, but it probably does not ring true. Even if it did you do not want to follow it up with an almost 8% decline.
When we look at the nonstore retailers (think of this as a gross approximation for online) it is a completely different story. This time the year-over-year percentage change is a 13.2% increase. There is a night and day difference in these numbers.
These numbers would seem to indicate the strategy of reducing stores and transitioning resources to better quality online presence is a pretty sound one. You might even decide it is actually late to be getting into that game, but it seems retail success requires that online presence now. While these data indicate some issues for department stores in the national data, this doesn’t say anything specific about Grand Forks. True. So let’s take a quick look.
I do not have the December retail report yet so I am not sure what that number will be, but I have the reports on taxable sales for the city of Grand Forks through November. Those report list a monthly amount collected as well as a cumulative total for the year so far. I did some quick calculation and every month in 2016 was lower than the same month in 2015. Do I know specific reasons why? Not yet, but we have the usual suspects.
Declining oil revenues led to shocks across the entire state and in many industries and Grand Forks was likely no exception. An examination of the behavior of Canadian shopping traffic would also be important. The growth of online sales would also be a likely problem. All of these factors could weigh on the sales, but the decline in sales locally, with a decline in department store sales nationally seems to be a recipe for many stores like the Macy’s in Grand Forks to at least consider closure.