Store openings and relocations have shuffled the retailing deck in the Tri-Cities, pushing Kingsport’s retail sales into the negative column in the latest retail report.
But that’s not expected to last long.
According to the sales data issued Tuesday by East Tennessee State University, Kingsport’s retail sales fell 4.0 percent in the third quarter to $301.1 million vs. $313.5 million in the same period a year ago.
In Johnson City, retail sales rose 6.4 percent in the third quarter to $447.9 million vs. $420.9 million in the year-ago period.
And in Bristol, retail sales grew 8.9 percent to $291.8 million in the third quarter vs. $268.0 million in the same period of 2006.
ETSU economist Steb Hipple said the data reflects store openings and relocations throughout the Tri-Cities.
“We’re playing musical chairs,” Hipple said.
The third quarter figures reflect the relocation of Sam’s Club earlier this year from Kingsport to Johnson City.
But the data doesn’t reflect the opening of Kingsport Pavilion, a shopping complex that includes Target, Kohl’s and Old Navy on East Stone Drive. Stores there began opening in October, and those sales will be included in the fourth quarter retail data, due out early next year.
The third quarter data also does not reflect the opening of the new Lowe’s Home Improvement Warehouse on West Stone Drive in Kingsport.
Hipple predicted the recent store openings in Kingsport will not only boost sales activity here. “I have a hunch it’s going to drain some of the recent growth in Johnson City and Bristol back to Kingsport,” Hipple said.
“This is the pause before the tremendous impact of all the new stores opening up on Stone Drive,” he said. “By the first part of next year, the dust should have settled.”
Overall, retail sales in the Tri-Cities metropolitan area rose 2.6 percent in the quarter to $1.55 billion. Adjusted for inflation, sales were just 0.3 percent above the same period of 2006.
Among the region’s counties, Unicoi, Scott, Washington County, Tenn., and Hawkins County reported higher dollar sales and sales volume. Dollar sales and sales volume declined in Carter, Sullivan and Washington County, Va.
Across the Volunteer State, retail sales increased 2.6 percent to $21.1 billion in the third quarter, while sales volume was 0.2 percent above 2006 levels when adjusted for inflation.
Hipple said retail sales growth is slowing at the national, state and regional levels. Nationwide, he said, consumer confidence is low and consumers are cautious with their spending despite high employment levels. Trouble in the sub-prime mortgage market is contributing to the problem, along with high gasoline prices and concerns of possible recession in 2008.
In Tennessee, the growth in retail volume in the third quarter was close to zero, Hipple said.
“Tax revenues for the state government are behind budget projections, and the governor has issued a warning about potential budget shortfalls before the end of the current fiscal year,” he said.
Meanwhile, the retailing picture in the Tri-Cities “is still confused,” Hipple said.
“It will take a few quarters before the dust of major store openings and relocations settles. Only then will we have a clear look at the reshaped structure of retailing patterns in the area,” he said.
As for the holiday shopping season, Hipple said the outlook is mixed.
“Consumers seem to be holding back on their spending,” Hipple said. “This pattern of caution is expected to continue into 2008, and the most optimistic forecasts are now calling for only modest growth of 1 to 2 percent in the new year.”
The retail sales report is based on state sales tax collections and is benchmarked to the 2002 U.S. Census of Retail Trade. The report is available online at http://faculty.etsu.edu/hipples.