After the closure of local department stores Herberger’s and JCPenney in 2018 in Alexandria, Nicole Fernholz was nervous. The city and surrounding Douglas County were the subject of a University of Minnesota Extension retail analysis. She knew the loss would hurt.
Fortunately, the news was better than expected. “Retailing has declined overall, but not significantly,” said Fernholz, director of the Alexandria Region Economic Development Commission.
Other findings in the report showed that the sale of building materials increased by 144%. This happened before the recent price increases and has more likely shown strength in local housing and second homes in the area, says Ryan Pesch, community economy extension educator.
However, not all the news was positive. Fernholz says sales of entertainment and recreation have fallen 35%. “For a community that depends on tourism, it’s not something you want to see,” she says.
Even disappointing trends, however, can inform economic development decisions. “We are very diverse in business and tourism, and it is important to look at our performance and the opportunities we have to grow,” says Fernholz.
The idea of performing Retail Analysis by Extension began in 2002 when Liz Templin, a community economics teacher (now retired), explored the possibility. In partnership with the State of Iowa, Extension’s first retail reports were released in 2004.
A year later, Bruce Schwartau, Manager of the Community Economics Program, began creating the reports internally. “Others might get the data from the Department of Revenue,” says Schwartau, “but we’ve created ways to make the data useful to communities. ”
Extension recently compiled retail savings reports for each of Minnesota’s 87 counties. The reports include information on 13 retail sectors in 2018, the most recent year for which data from the Ministry of Revenue is available. Community leaders can use the data to see the performance of each area in their county.
For busy business developers, having this kind of information at their fingertips is a godsend. “Every community wants to know ‘What drives our economy?’ Says Pesch.
The Andria Theater at Dusk marquee promotes the play “Grease”. Activity has picked up in entertainment businesses as more and more people feel comfortable congregating indoors. Contribution photo
Seemingly dry sales data can also tell a story. “There’s a narrative that’s going to help make sense of the numbers,” says Pesch, “and community leaders and local business owners usually have the best ideas.”
The owner of the lumberyard, for example, may know why sales of building materials have increased. Or the owner of a local clothing store may be able to explain why retail sales in the area have suddenly plummeted. This type of specific knowledge can help provide the color and context needed to make data actionable for decision makers.
As cities in Minnesota recover from the COVID-19 pandemic, retail sales appear brighter. The adaptability of retailers – especially those that can pivot quickly to deliver quality online shopping and safe in-person experiences – will help communities revitalize themselves, Pesch says.
In Alexandria, retail sales are on the rise after a substantial drop last year. “We are doing a lot better than a couple of months ago,” says Fernholz.
The city plans to request another analysis of Extension’s retail business this fall. “These results help us determine what our shortcomings are as a regional center,” says Fernholz. “The information is critical in determining where we will focus to place new retailers, restaurants and service providers. “