Johnson City leads Tri-Cities retail sales to outperform Knoxville, Chattanooga

Rick Wagner • Mar 6, 2008 at 12:00 AM

The good news in the latest retail sales report from East Tennessee State University is that the Tri-Cities outperformed Knoxville and Chattanooga in 2007 sales percentage increases, as adjusted for inflation.

The bad news is that Kingsport retail sales fell to third place among the Tri-Cities for the last quarter of 2007 and for the whole year, with retail growth centered in Johnson City and around Exit 7 off Interstate 81 in Virginia.

“Store openings and relocations continued to affect retail activity over the holiday selling season. Johnson City enjoyed strong retail growth with dollar sales increasing 8.9 percent to reach $500 million,” economist Steb Hipple wrote in the Tri-Cities Retail Sales Report for the fourth quarter, released Thursday by the ETSU Bureau of Business and Economic Research in the College of Business and Technology.

“In contrast, fourth quarter retail performance was disappointing in Bristol and Kingsport. After leading the Tri-Cities in retail growth for the previous five quarters, Bristol saw a dollar increase of only 0.9 percent to $317 million,” wrote Hipple, an economics professor and research associate for BBER. “Kingsport, the city most affected by store relocations, reported a small decline in dollar sales, which fell 0.8 percent to $359 million.”

Adjusted for inflation, fourth quarter sales volume increased 4.8 percent in Johnson City, while declining 2.9 percent in Bristol and 4.6 percent in Kingsport. For 2007 as a whole, retail volume was higher by 4.3 percent in Bristol and 2.7 percent in Johnson City, while decreasing 3.1 percent in Kingsport.

“It’s surprising that a single store relocating such as Sam’s (Wholesale Club) can have such an impact,” Hipple said Thursday of the Sam’s, which closed midyear in Kingsport. New Sam’s locations opened in Johnson City and Bristol, Va.

Asked about the Kingsport Pavilion, the second Lowe’s and other retail outlets that opened in late 2007 or those that are to open this year, Hipple said they eventually would lead to a “substantial jump” for Kingsport retail sales.

“That is obviously going to kick those Kingsport numbers up. It’s just a matter of when,” Hipple said. “The new retail in Kingsport is developing a little bit slower than anticipated.”

Other new retail space is coming to Kingsport, and the Fort Henry Mall also is about to undergo a 2008 inside renovation and a 2009 net expansion of about 100,000 square feet. However, The Mall at Johnson City is expanding, a new development called Hamilton Place is coming to State of Franklin Road in Johnson City, and Exit 7 continues to expand, including the opening this month of a Best Buy.

As a whole, dollar retail sales performance in the Tri-Cities combined statistical area increased 5.1 percent on a year-to-year basis to reach $1.71 billion.

Adjusted for inflation, retail activity in the Tri-Cities area was 1.1 percent above the same period in 2006. Higher dollar sales and sales volume were reported by the Virginia counties of Washington and Scott, and Washington County, Tenn. But adjusted for inflation, retail activity was lower in Sullivan, Carter, Hawkins and Unicoi counties.

In contrast, Chattanooga’s metropolitan statistical area retail sales increased 3.1 percent to $1.81 billion, while Knoxville MSA sales increased 1.1 percent to $3.095 billion. But adjusted for inflation, sales volume decreased 0.9 percent in Chattanooga and 2.8 percent in Knoxville, compared to the 1.1 percent growth in the Tri-Cities.

For more information on the report go to http://faculty.etsu.edu/hipples.

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