So far, 21st century unkind to Iowa retailers

Iowa’s retail sales declined by 2.7 percent during the first seven years of the decade, according to a study by an Iowa State University economist.

More than 100 communities experienced sales declines of at least 10 percent from 2000 to 2007, with 59 experiencing more than a 20 percent decline, according to the Retail Sales Analysis & Report by ISU’s Regional Capacity Analysis Program.

Overall, per capita sales in the state have dropped by 6 percent, according the report, which was written by Meghan O’Brien.

Many of the communities found on the report’s list of largest retail sales declines were in rural areas — with Buffalo, down 57.92 percent, and Shenandoah, down 52.9 percent, topping that list.

Des Moines ranked 23rd on the list with a sales decline of 29.1 percent.

O’Brien said Des Moines’ loss has been a product of its suburbs’ gains. Retail sales in Altoona increased 198.5 percent, while sales in Grimes rose 158.2 percent.

Other metro-area communities with increases in sales were Pleasant Hill, which was up 91.2 percent; Waukee, 74.8 percent; Ankeny, 65.2 percent; and Urbandale, 57.9 percent.

“About 20 years ago, it was the major metro areas that saw the growth; now it’s the ancillary cities,” said O’Brien, an ISU Extension program specialist. “Meanwhile, rural towns are seeing rapid, rapid decline.”

O’Brien based the report on data from the Iowa Department of Revenue’s Iowa Retail Sales and Use Tax Report.

O’Brien said retail sales numbers alone can be a misleading measure of a community’s health, since cities that didn’t previously have many businesses can boost their sales dramatically with the addition of a large business or new development.

Because rural communities are losing income because population and corresponding business are being pulled to the larger metropolitan areas, O’Brien said it was time for the leaders of those communities to change the way they do business.

The complete Iowa Community Reports, which includes the retail sales reports, can be found at www.recap.iastate.edu/local/.They also include reports on population trends, child well-being and school district profiles.