Tuesday, October 19, 2010

Retail sales track 2009, but some cities doing better than others

Sales tax distributions for October indicate that the volume of retail sales in Marin County continues to track that achieved in 2009. Total distributions reported by the State Board of Equalization this month were $1.9m, a slight 1.8% drop from October 2009.

This month, we take a look back to see how much retail sales have fallen over the course of the recession, and how far they have to rise to reach pre-recession levels.

The chart below shows the change in sales tax distributions since June 2008, using a 12-month rolling average index to remove monthly variability. Overall, the County is pulling in just 85% of the sales tax it was generating in 2008. However, there are some notable differences between cities:
  • Fairfax lives up to its reputation as being somewhat disconnected from the rest of the county, having maintained higher levels of sales tax revenues over the last two years, albeit with a decline over recent months at a time when other towns are recovering.
  • Corte Madera was hit quite hard at the beginning of the recession, but has shown the strongest recovery this year, and is my bet for being the first city to break back through 100 on the index. Novato has followed a similar path and is not far behind.
  • Sausalito, Larkspur and San Anselmo were more resilient at the start of the recession, possibly because of their reliance on eateries and local services, but were hit hard in 2009 as residents were hit with job losses and house price declines.
  • San Rafael and Mill Valley are each still below 80% of their pre-recession retail sales. San Rafael accounts for approximately 1/3 of Marin retail sales but has been hit with 1/2 of the county's sales decline. Mill Valley's acute decline is likely connected to its population base, which includes larger numbers of workers in finance, business and other sectors hit with job losses.
  • That leaves Tiburon in last place. Despite being the County's wealthiest town, its retail sector has imploded in the last few years, with sales now at just 66% of their 2008 level. A small retail sector, with a heavy reliance on tourist spending, is likely the reason behind the poor performance.

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