AE-03098
ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR KEYES AND BOISE CITY IN CIMARRON COUNTY
Suzette Barta, Extension Assistant, OSU, Stillwater
(405) 744-6186
Susan Trzebiatowski, Student Assistant, OSU, Stillwater
(405) 744-6186
Scott Gillin, Ext. Ed. Agric/4-H & County Extension Director, OSU, Boise City
(580) 544-3399
Stan Ralstin, Area Community Development Specialist, OSU, Enid
(580) 233-5295
Mike D. Woods, Extension Economist, OSU, Stillwater
(405) 744-9837
OKLAHOMA COOPERATIVE EXTENSION SERVICE
OKLAHOMA STATE UNIVERSITY
October 2003
Analysis Of Retail Trends And Taxable Sales For
Keyes and Boise City in Cimarron County
Suzette BartaSusan TrzebiatowskiMike Woods
Extension AssistantStudent AssistantExtension Economist
Room 527, Ag. HallRoom 527, Ag. HallRoom 514, Ag. Hall
Oklahoma State UniversityOklahoma State UniversityOklahoma State University
Stillwater, OK 74078-6026Stillwater, OK 74078-6026Stillwater, OK 74078-6026
Scott GillinStan Ralstin
Ext. Ed., Ag/4-H & CEDArea Ext. Comm. Dev. Specialist
PO Box 153 Courthouse205 W. Maple, Suite 610
Boise City, OK 73933-0153Enid, OK 73701-4011
ABSTRACT
The goal of this paper is to provide an analysis of taxable sales for Boise City and Keyes in Cimarron County. Basic data is used to provide estimates of trade area capture and pull factors. Reported sales tax data is also used to analyze trends in the county and area.
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ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR
KEYES AND BOISE CITY IN CIMARRON COUNTY
INTRODUCTION
Oklahoma communities have been concerned with all aspects of economic development for the past several years. Creating new jobs and additional income is of concern to rural communities and urban areas alike. Often, retailing is viewed as a "service" sector dependent on the "basic" sectors such as oil, manufacturing, and agriculture. Export sectors produce goods and services sold outside the local or regional economy. Service sectors tend to circulate existing local dollars rather than attracting "new" outside dollars. The retail sector is important, though, as retail activity reflects the general health of a local economy. Retail sales also produce sales tax dollars which support municipal service provision. Many local communities are promoting a "shop at home" campaign to keep local retail dollars in the community. It will not be possible to stop all out-of-town spending or sales leakage’s for a local economy. Opportunities for improvement do frequently exist, however. Cimarron County is involved in the Initiative for Rural Oklahoma leadership program, and Keyes and Boise City are the two communities in the county that collect a sales tax. The information in this study may help these communities identify key areas for improvement. Specifically, the objectives of this study are:
1.Utilize reported sales tax data to analyze trends in the county and area,
- Provide estimates of trade area capture and market attraction.
- Provide estimates of market attraction, broken out by SIC code.
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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:
TACc=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, and
PCIs=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 state average.
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, and
Pc=City Population.
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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 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 2003. Data used were sales tax returns as reported by the Oklahoma Tax Commission. These figures do not include all retail sales (only taxable sales) in an area but provide a proxy. Population data were obtained from the Oklahoma State Data Center and were consistent with figures from the1980, 1990, and 2000 Census. Income figures were taken from Bureau of Economic Analysis estimates for counties. Similar income data for cities were not available so county income was used as a proxy.
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TAXABLE SALES ANALYSIS
Sales tax returns as reported by the Oklahoma Tax Commission for Keyes and for Boise City are listed in Table 1 for the fiscal years 1980 to 2003. 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 2003, Boise City collected over $319,000 in sales tax at a tax rate of 3.00%, while Keyes collected over $21,000 at a rate of 2.0%. Figure 1 plots estimated taxable sales for the same time period in both actual dollars and inflation-adjusted dollars. Sales are estimated from the sales tax returns and the sales tax rate that is reported. 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 been fairly flat for both communities since about 1996. Both communities have seen a decline in both actual and “real” sales for the last year or so.
Table 2 lists trade area capture figures for Boise City and Keyes from 1980 to 2003. The trade area capture for Boise City was at a maximum of 2,333 occurring in 1980. Keyes’s maximum was 557 also occurring in 1980. This means that in 1980 Boise City “captured” the retail sales of 2,333 persons and Keyes “captured” the sales of 557 people. Figure 2 presents a graphic of these same trade area capture figures. For Boise City, a recent peak occurred in 1995, followed by a period of decline through 1999. Trade area capture is up for 2000-2002, but down again for 2003. For Keyes, trade area capture has been relatively stable, remaining between 150-300 as far back as 1988.
Table 3 lists pull factors for Boise City and Keyes for the years 1980 to 2003. The pull factor for Boise City ranges from 0.553 to 1.398. If Boise City’s pull factor is currently about 1.00, the interpretation is that Boise City is capturing the sales from 100% of the residents of the community. The community is not experiencing retail leakage, but it is not attracting shoppers from outside of the community either. (This is not exactly true. It is likely that rural residents travel to Boise City to shop for some items; however, this activity is nearly exactly offset by the out-shopping by Boise City residents who purchase many items in Guymon or even Dumas and Amarillo, TX.) The pull factor for Keyes ranges from 0.343 to 0.713. It is currently about 0.36, implying that Keyes is capturing the sales from 36% of the residents of the community and is not attracting non-local shoppers.
Figure 3 shows pull factors for cities and towns in Cimarron County with a reported sales tax—Boise City and Keyes. It is interesting that the pull factors for the two communities seem to move in opposite directions until about 1993 or 1994. For example, Boise City reaches a low in 1988, while Keyes reaches a peak and actually has a higher pull factor than Boise City does. In 1990, however, Keyes’ pull factor goes down and Boise City’s goes up and then pulls away substantially from Keyes. From that point on the pull factors for the two communities seem to move together—indicating some dependencies between the two economies.
Figure 4 shows pull factors for 461 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 5,001 to 10,000 and 10,001 to 25,000 and 25,001 to 50,000 in population. The smallest pull factors fall in the range for cities less than 1,000 in population. Figure 5 plots Boise City’ and Keyes’s pull factors compared to other cities with population 1,000-5,000 as well as to towns with population less than 1,000. Since 1994, Boise City has posted pull factors greater than the average for other cities of similar size. Keyes, on the other hand, seems to swirl around the average for other towns with less than 1,000 population.
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Table 1
Sales Tax Collections for Boise City and Keyes in Cimarron County
1980-2003
BOISE CITY / KEYESYear / Months / Rate / Collections / Months / Rate / Collections
1980 / 12 / 1.0% / $78,681.43 / 12 / 2.0% / $22,782.44
1981 / 12 / 1.0% / $86,193.43 / 12 / 2.0% / $24,837.93
1982 / 12 / 1.0% / $89,673.77 / 12 / 2.0% / $26,629.94
1983 / 12 / 1.0% / $92,569.29 / 12 / 2.0% / $32,891.30
1984 / 3/9 / 1.0%/3.0% / $219,534.56 / 12 / 2.0% / $35,941.12
1985 / 12 / 3.0% / $287,874.24 / 12 / 2.0% / $40,794.95
1986 / 12 / 3.0% / $270,677.86 / 12 / 2.0% / $40,405.88
1987 / 12 / 3.0% / $246,981.54 / 12 / 2.0% / $36,590.08
1988 / 12 / 3.0% / $256,231.21 / 12 / 2.0% / $39,157.56
1989 / 12 / 3.0% / $269,288.47 / 12 / 2.0% / $35,141.20
1990 / 12 / 3.0% / $275,587.59 / 12 / 2.0% / $31,746.35
1991 / 12 / 3.0% / $273,533.18 / 12 / 2.0% / $31,191.36
1992 / 12 / 3.0% / $284,390.28 / 12 / 2.0% / $31,403.83
1993 / 12 / 3.0% / $282,270.73 / 12 / 2.0% / $29,712.01
1994 / 12 / 3.0% / $337,100.98 / 12 / 2.0% / $34,706.97
1995 / 12 / 3.0% / $324,019.49 / 12 / 2.0% / $28,215.95
1996 / 12 / 3.0% / $307,749.93 / 12 / 2.0% / $33,430.55
1997 / 12 / 3.0% / $319,747.06 / 12 / 2.0% / $32,738.51
1998 / 12 / 3.0% / $318,979.10 / 12 / 2.0% / $31,322.48
1999 / 12 / 3.0% / $334,272.29 / 12 / 2.0% / $28,931.24
2000 / 12 / 3.0% / $338,840.31 / 12 / 2.0% / $29,821.97
2001 / 12 / 3.0% / $334,721.90 / 12 / 2.0% / $37,256.79
2002 / 12 / 3.0% / $344,361.55 / 12 / 2.0% / $35,338.86
2003 / 12 / 3.0% / $319,656.94 / 12 / 2.0% / $21,323.38
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Year / Boise CityTrade Area Capture / Boise City Population / Keyes
Trade Area Capture / Keyes Population
1980 / 2,333 / 1,761 / 338 / 557
1981 / 1,662 / 1,900 / 239 / 550
1982 / 1,272 / 2,000 / 189 / 550
1983 / 1,496 / 2,150 / 266 / 550
1984 / 1,358 / 2,300 / 272 / 500
1985 / 1,245 / 2,250 / 265 / 500
1986 / 1,349 / 2,350 / 302 / 450
1987 / 1,397 / 2,300 / 310 / 450
1988 / 1,245 / 2,200 / 285 / 400
1989 / 1,394 / 2,300 / 273 / 400
1990 / 1,255 / 1,507 / 217 / 452
1991 / 1,171 / 1,471 / 200 / 442
1992 / 1,311 / 1,461 / 217 / 439
1993 / 1,187 / 1,448 / 187 / 434
1994 / 1,818 / 1,434 / 281 / 430
1995 / 1,947 / 1,393 / 254 / 420
1996 / 1,721 / 1,397 / 280 / 420
1997 / 1,575 / 1,411 / 242 / 424
1998 / 1,520 / 1,376 / 224 / 413
1999 / 1,232 / 1,345 / 160 / 404
2000 / 1,407 / 1,483 / 186 / 410
2001 / 1,477 / 1,437 / 247 / 399
2002 / 1,532 / 1,406 / 236 / 393
2003 / 1,416 / 1,406 / 142 / 393
Table 2
Trade Area Capture for Boise City & Keyes
1980-2003
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Table 3Pull Factors, Boise City & Keyes in Cimarron County
1980-2003
Boise City / Keyes
1980 / 1.325 / 0.606
1981 / 0.875 / 0.435
1982 / 0.636 / 0.343
1983 / 0.696 / 0.483
1984 / 0.591 / 0.544
1985 / 0.553 / 0.529
1986 / 0.574 / 0.671
1987 / 0.607 / 0.690
1988 / 0.566 / 0.713
1989 / 0.606 / 0.682
1990 / 0.833 / 0.480
1991 / 0.796 / 0.453
1992 / 0.897 / 0.495
1993 / 0.820 / 0.432
1994 / 1.268 / 0.653
1995 / 1.398 / 0.606
1996 / 1.232 / 0.668
1997 / 1.116 / 0.571
1998 / 1.105 / 0.542
1999 / 0.916 / 0.396
2000 / 0.949 / 0.453
2001 / 1.028 / 0.618
2002 / 1.089 / 0.600
2003 / 1.007 / 0.360
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SALES GAP ANALYSIS FOR BOISE CITY AND KEYES, 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. See Table 4 for Boise City’s sales gap analysis and Table 5 for Keyes’ analysis. Sales tax data by SIC code is only available for Keyes for FY 2003. Table 6 provides a detailed description of the 8 retail SIC categories.
For Boise City’s Building and Gardening Materials, the number of shoppers has decreased from 1,173 in FY 1998 to 962 in FY 2003. Boise City's population is about 1,400; thus, in 2003, this sector of the Boise City economy was capturing a number of local shoppers that was equal to about 68% of the town’s population. In Keyes, these stores captured the equivalent of 13 shopper in FY 2003, which is equal to about 3.5% of the town’s population.
The category of General Merchandise 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 will post sales gap coefficients that are greater than 1.0 for this category. Those without a Wal-Mart will have pull factors less than 1.0. Boise City is no exception to this rule. Boise City does not have a Wal-Mart, and their gap coefficient in this category was 0.01 in FY 2003. The Wal-Mart store locator at indicates that the closest Wal-Mart to Boise City is 57 miles away in Guymon and the closest Wal-Mart Supercenter is 94 miles away in Lamar, CO. Subsequently, there is no Wal-Mart in Keyes either and their gap coefficient is also about 0.01.
Grocery stores in Boise City had a gap coefficient of 2.37 in 2003. Consumers tend to appreciate the convenience of shopping for groceries close to home. In addition, most residents outside of the city limits will travel into the small town grocery store to shop; consequently, it is common to find that even very small towns post high gap coefficients for this sector. Keyes is an exception and has a negligible gap coefficient in this category. One might assume that residents of Keyes shop for groceries in Boise City.
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 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 Boise City in this category indicate that these types of businesses did very well, attracting local customers plus about 53% more non-local shoppers. Keyes also does well in this category. In fact, this is Keyes’ highest trade area capture by far—attracting 682 shoppers.
Apparel sales are reported under SIC 56. It is very difficult for small to medium sized towns to post high sales coefficients in the category of apparel. 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. Boise City’s apparel stores captured a total of 467 shoppers in FY 2003 for a gap coefficient of 0.33. These numbers have been falling in recent years. Keyes’ values are more typical in this category—attracting the equivalent of 7 shoppers for a gap coefficient of about 0.02.
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 generally viewed from the perspective that most 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. Residents of Boise City and Keyes may also consider the furniture market in Amarillo, TX. The number of annual shoppers in this category in 2003 was 614 in Boise City and 186 in Keyes.
Eating and Drinking Places, SIC 58, is one of the most straightforward retail sectors. It contains restaurants and bars. Restaurants and bars in Boise City captured 1,271 customers in FY 2003. This number has decreased a bit from previous years when the gap coefficient was above 1.0. Restaurants in Keyes tend to attract a total number of shoppers that is equal to about 41% of that town’s population.
SIC 59, or Miscellaneous Retail, contains a host of retail activity, including pharmacies, florists, liquor stores, and antique stores. These are often thought of as the Main Street or downtown merchants. Boise City's pull factor in this category has fallen from 0.69 in 2001 to 0.57 in 2003. Keyes’ pull factor in this category for 2003 is about 0.29.
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TRADE AREA CAPTURE / FY 1998 / FY 1999 / FY 2000 / FY 2001 / FY 2002 / FY 2003Building, Gardening & Merchandise (52) / 1,173 / 1,038 / 1,129 / 1,138 / 1,088 / 962
General Merchandise (53) / 17 / 6 / 11 / 15 / 9 / 10
Food Stores (54) / 2,974 / 2,487 / 2,951 / 3,262 / 3,432 / 3,335
Automobile Dealers & Gas Stations (55) / 2,737 / 2,339 / 2,492 / 2,384 / 2,569 / 2,158
Apparel & Accessory Stores (56) / 816 / 633 / 752 / 687 / 482 / 467
Furniture & Home Furnishings (57) / 892 / 659 / 550 / 700 / 612 / 614
Eating & Drinking Places (58) / 1,600 / 1,361 / 1,627 / 1,626 / 1,593 / 1,271
Miscellaneous Retail (59) / 769 / 776 / 974 / 1,000 / 911 / 803
SALES GAP COEFFICIENT * / FY 1998 / FY 1999 / FY 2000 / FY 2001 / FY 2002 / FY 2003
Building, Gardening & Merchandise (52) / 0.85 / 0.77 / 0.76 / 0.79 / 0.77 / 0.68
General Merchandise (53) / 0.01 / 0.00 / 0.01 / 0.01 / 0.01 / 0.01
Food Stores (54) / 2.16 / 1.85 / 1.99 / 2.27 / 2.43 / 2.37
Automobile Dealers & Gas Stations (55) / 1.99 / 1.74 / 1.68 / 1.66 / 1.82 / 1.53
Apparel & Accessory Stores (56) / 0.59 / 0.47 / 0.51 / 0.48 / 0.34 / 0.33
Furniture & Home Furnishings (57) / 0.65 / 0.49 / 0.37 / 0.49 / 0.43 / 0.44
Eating & Drinking Places (58) / 1.16 / 1.01 / 1.10 / 1.13 / 1.13 / 0.90
Miscellaneous Retail (59) / 0.56 / 0.58 / 0.66 / 0.69 / 0.65 / 0.57
Table 4
Retail Sales Gap Analysis by Standard Industrial
Classification (SIC) Code, Boise City: Fiscal 1998-2003
* For purposes of this paper, when analyzed by SIC code, the pull factor is referred to as the sales gap coefficient
Table 5
Retail Sales Gap Analysis by Standard Industrial
Classification (SIC) Code, Keyes: Fiscal 2003
Category / Trade Area Capture2003 /
Sales Gap Coefficient
2003*Building, Gardening & Merchandise (52) / 13 / 0.035
General Merchandise (53) / 6 / 0.014
Food Stores (54) / 1 / 0.003
Automobile Dealers & Gas Stations (55) / 682 / 1.749
Apparel & Accessory Stores (56) / 7 / 0.019
Furniture & Home Furnishings (57) / 186 / 0.477
Eating & Drinking Places (58) / 160 / 0.410
Miscellaneous Retail (59) / 114 / 0.292
* 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 6
TYPES OF BUSINESSES
DESCRIBED BY THE RETAIL SIC CODES
52 Building Materials58 Eating and Drinking Places
Lumber yards including home centers
Paint and wallpaper stores
Glass stores59 Miscellaneous Retail
Hardware storesDrug and proprietary stores
Retail NurseriesLiquor Stores
Lawn and garden supply storesUsed merchandise stores including antique
Mobile Home dealersstores and pawn shops
Sporting goods stores
53 General Merchandise StoresBook stores
Variety storesStationary stores
Department storesJewelry stores
Warehouse clubsHobby, toy, and game shops
General combination merchandise storesCamera and photographic supplies stores
Gifts, novelties and souvenirs
54 Food StoresLuggage and leather goods stores