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Retail analysis: Use it or lose it

By Sara QuamRock County businesses aren’t keeping as many local shoppers as they would like, but a few are doing that and then some. Automotive retailers, for example, have a combined 15,000 to 20,000 people buying from them.University of Minnesota Extension Educator David Nelson completed the retail trade analysis and presented the findings Monday. He said, "That means that four times the population of Luverne are buying automobiles in Luverne. So, you all have four-car garages, right?"Based on standard spending expectations, Luverne’s auto businesses should have sold about $10 million in 2003. But auto businesses did 270 percent better than that with a total of $37.7 million in sales.Nelson said, "I’ve not seen this before, not 270 percent more than expected."The automotive category includes items such as motorcycles, snowmobiles and new parts and accessories.Luverne Area Chamber of Commerce Director Dave Smith pointed out that there are as many used car dealers as there are beauticians in Luverne.Nelson used state sales tax data from 1996 to the latest figures from 2003 for his analysis.If three or fewer businesses file under a sales tax category, the state doesn’t release the data in order to protect the privacy of those businesses.So there was no data available on apparel or electronics, for example, because not enough businesses file under that category.Overall, the city of Luverne gets 450 more shoppers than the number of people who live in Luverne. Even so, people from Luverne are leaving town for food, general merchandise and gasoline.People spent more than expected in Luverne on building materials, automobiles, eating and drinking, hotels, repair and maintenance service and amusement and recreation. Shoppers in Luverne spent $6.11 million on building materials in 2003; $37.71 million on automobiles; $6.05 million on eating and drinking; $1.97 million on hotels; $3.45 million on repair and maintenance service, and $0.86 million on amusement and recreation.Food, which includes five businesses, had an increase of 40 percent between 1998 and 2000. So, sales may have increased in certain years, but that doesn’t mean retailers are meeting their full potential.Rock County overall sold less than expected in several categories.Food (groceries) sold 17 percent less than expected; building materials sold 33 percent less than expected; general merchandise sold 43 percent less than expected; furniture stores sold 71 percent less than expected and eating and drinking establishments sold 20 percent less than expected.Essentially, Nelson said, "Half of the population is leaving the county to shop elsewhere."Taking study to heartChamber Director Smith said, "There just isn’t the community loyalty that there used to be."People work outside of their community, maybe for better wages, Nelson said. As they are gone so much, they probably also shop away from home.Some retailers at the meeting said they feel the pull from Sioux Falls, but hope their service and unique offerings keep shoppers with them."Now we need to develop a plan to enhance the areas that have the potential to attract more consumers and to capture the markets that are already shopping here," said Luverne Economic Development Director Jill Wolf .The LEDA sponsored the $650 study."From this study, you’ll be able to make informed, strategic decisions using this factual information," Nelson said.Often, retail businesses want to relocate to Luverne or start here with the help of public funds. With this information, the city will be able to better gauge what type of business the community needs.The Extension study was for retail. It didn’t include manufacturing or industrial businesses that make wholesale sales. It also didn’t include medical care, lawyers, accountants, dentists or similar services. If people are interested, Wolf has a video copy and printed information from the Extension presentation available to the public.

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