One of the ongoing discussions amongst economic developers is the question of whether retail is considered a primary industry, because the industry doesn’t export the majority of its products or services to markets outside the local region and infuse new dollars into the local economy.
But wait…doesn’t sales/tax from retail stores infuse new dollars into the local economy? Shopping in local retail stores could help pay a local teacher’s salary.
Historically, the retail industry was known to be a provider of lower- wage jobs. But in more recent times and with the rise in minimum wage, full-time retail jobs pay more than non-retail jobs.
With more than 1 in 4 businesses categorized in the retail sector, these industries collectively help build a large tax base as well as add jobs at every level – from entry level to manager/VP jobs.
While we won’t see the full residual effects of the COVID pandemic for some time, we already feel the struggle with retail during a pandemic. There seemed to be a flip in needs where COVID-resistance retail trended toward grocery, pet care and home improvement purchases while restaurants, clothing stores, sports stores and gas stations seemed to the most affected by the pandemic.
The COVID pandemic seems to serve as an accelerant for online retail. In the 4th Quarter of 2019, online retail sales stopped at 11% of the market share. In the last 12 months, online retail climbed to 17% - a greater acceleration than the sum total in the last decade. Of the top 25 growing brands, the top 10 are e-commerce based.
The mentality tide is shifting for retail. The industry sector influence executives to locate their families where they want to shop and enhances the quality of life that brings high school/college graduates back home to work. As we look to the future of retail, expect more services – on demand. Expect to see more delivery options for health food and drive throughs – event from higher-end restaurants.