{"id":1829,"date":"2024-11-01T12:46:12","date_gmt":"2024-11-01T19:46:12","guid":{"rendered":"https:\/\/wallawallatrends.org\/newsletter\/?page_id=1829"},"modified":"2024-11-13T15:38:10","modified_gmt":"2024-11-13T23:38:10","slug":"nov24_main2","status":"publish","type":"page","link":"https:\/\/wallawallatrends.org\/newsletter\/nov24_main2\/","title":{"rendered":"Retail Leakage from Walla Walla Seems to be Growing"},"content":{"rendered":"
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by Dr. Patrick Jones<\/strong><\/p>

The indicator Taxable Retail Trade Sales per Capita<\/a> displays a relatively rare phenomenon of economic data: it has trended down. While this is a desirable outcome for a few measures, such as the Consumer Price Index, for most other measures of a local economy, we\u2019d like to see them moving in the other direction. Specifically, 2023 results for Walla Walla County show a sizeable drop from 2021 peak of approximately $10,800, to nearly $10,200. This translates in a cumulative drop of about 6%.<\/p>

Note that the benchmarks for this indicator, the two counties of neighboring Tri Cities, also don\u2019t reveal a much strong pulse. Over the same period, Benton County\u2019s cumulative growth was a -1.0% while Franklin County eked out a 1% increase. Clearly the two years since the height of the pandemic were not great for retail spending.<\/p>

The indicator serves as a rough proxy for the draw of the local retail trade sector. As you can see, spending per capita in the greater Tri Cities has been considerably higher than here in Walla Walla County. The gap to Benton County in 2023 was over $3,500, while the gap to Franklin County was nearly $2,000.<\/p>

What could cause the difference? The premise of the indicator is that neighboring counties with significantly higher per capita sales can be traced to shoppers from outside the county. Anyone from Walla Walla who has made a Costco run to Kennewick is a part of that phenomenon.<\/p>

Of course, another factor is incomes. Higher incomes allow for higher per capita spending. That likely plays a role in the comparison to the Tri Cities, where most recently (2023) median household income in the two counties was about $9,000 higher than in the Walla Walla metro area (Walla Walla and Columbia Counties). It is this writer\u2019s hunch, however, that the income effect isn\u2019t as important as out-of-county shoppers. Careful consumers of Walla Walla Trends might look to a related indicator, 1.2.1, Total Annual Taxable Retail Sales, and wonder why this one shows a cumulative increase in sales. Between 2021 and 2023, these sales actually climbed, by nearly 3%. What gives?<\/p>

This latter measure looks at all taxable retail spending. Given our state\u2019s tax structure, that broad sweep includes the activities of the construction, hospitality and to some degree, manufacturing sectors. The featured measure, attempting to understand retail leakage, understandably only uses retail trade industries, a much narrower view. The positive departure of the broader measure from retail trade figures implies that Walla Walla\u2019s non-retail-trade sectors expanded at positive pace over the last three years. And at a strong enough pace to offset the decline in retail trade shopping here.<\/p>

What might the 2024 version to the retail leakage measure look like? We have data only from the first half of this year from the Washington Department of Revenue. So far, the results don\u2019t portend an improvement over 2023. Retail trade sales in the county were off -2.3% from 2023. Perhaps the second half will reverse this standing.<\/p>

Or perhaps not. We won\u2019t know until mid-year in 2025. If the trend continues, however, Walla Walla\u2019s retail leakage will only grow.<\/p><\/div><\/div><\/div><\/div> <\/div>\n <\/div>\n <\/div>\n\t\t\t\t\t\t\t\t\t <\/div>\n\n <\/div>\n <\/div>\n\t\t\t\t

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