Friday, February 15, 2008

Shopping in Marin – adding up the numbers.

I was curious to know how big the whole retail market is in Marin, or put another way, how much money is available to be spent in stores in the county. This is an important number for retailers and mall owners, because they all want (and need) to grab a slice of it. One way to estimate the market size is to find out how many dollars the average person spends in stores and multiply it by the population. Another way is to track recorded retail sales or multiply average store sales per square foot by the total retail space in the County.

One widely used source for retail spending estimates is the Census Bureau’s Consumer Expenditure Survey, which is produced every few years. I totaled up the retail expenditure items for the San Francisco metro area from the 2006 survey and it appears that average spending per household was $18,111.

As we all know, Marin folks have more cash to spend than the average San Franciscan. According to the Bureau of Economic Analysis, average per capita income in Marin in 2005 was 44% higher than San Francisco. If we assume retail spending was also 44% higher than San Francisco the average Marin household would have spent approx. $26,000 in 2006. Allowing for some additional growth over the last two years bumps this up to $27,600 per household in 2008. With just over 100,000 households in Marin, that adds up to around $2.8 billion this year.

Now let’s add it up the other way. In 2006 taxable sales in retail stores in Marin were just over $3.2 billion, according to the CA Board of Equalization, which monitors such things. Allowing for some market growth, the 2008 total is probably around $3.4 billion. But this total includes non-household sales (i.e. trade sales such as lumber, office supplies etc) and autos, boats etc (which I don’t count as retail). Take these items out and the total reduces to $2.1 billion. Then we have to add in an allowance for sales of goods and services which do not attract sales tax, such as food to take home and prescription drugs. These items account for approx. 25% of household retail spending. Adding them in pushes up total retail sales in the County to $2.8 billion. This just happens to match the amount I calculated above, which is nice.

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