Holiday shopping figures always a plus for NoCo

As you read this, your gift shopping for the 2005 Christmas season should be completed.  As I write it, however, the shopping season has barely begun.

November and December retail sales in Northern Colorado surpassed the $2 billion mark in 2004, increasing 9.63 percent over 2003.  The increase from 2002 to 2003 was a more normal 5.6 percent.  Retail sales each year should increase by at least the rate of inflation plus the rate of population growth.  If we assume a 3 percent rate of inflation and a 2 percent rate of population growth, then sales must increase by about 5 percent per year to avoid losing ground in real terms.

I expect that Christmas season sales this year will increase by close to 10 percent nominally (5 percent real) over the 2004 shopping season.  The new Promenade Shops at Centerra at Interstate 25 and U.S. Highway 34 will attract additional local and non-local shoppers and should increase total retail sales by 2 percent to 3 percent over what they would have been without the new shops.  Recent consumer confidence statistics are very positive and the national economy is still performing very well in spite of a building array of negative factors.  Productivity growth is strong and corporations and households are awash in cash, thanks to low interest rates and refinancing activity.

SPONSORED CONTENT

How Platte River is proactively managing its clean energy transition costs

Learn more about how Platte River Power Authority is proactively managing its clean energy transition costs across the region.

Christmas season retail sales in Larimer County were about $1.3 billion in 2004, approximately 60 percent greater than the $800 million in Weld County.  This gap widened from about 40 percent in 1998 when the outlet shops at I-25 and Highway 34 opened.  Retail sales in December were about $25 million per day in Larimer County in 2004 and $17 million per day in Weld County for a total of more than $40 million per day in Northern Colorado.

Interestingly, between 1998 and 1999 there was a 25 percent increase in sales in Larimer County in December only.  There was a slightly greater rate of growth in Weld County December sales, indicating a weak spillover effect, but nothing close to the rate of increase in Larimer County.

Until 2003, retail sales in November and December in Larimer County both surpassed November and December sales in Weld County.  Beginning in 2001, December retail sales in Weld County started increasing at a much greater rate, increasing 50 percent between 2001 and 2004 so that December sales in 2004 in both counties were higher than November sales in either county.  November sales in Weld County are closing the gap with November sales in Larimer County.  These relationships will change again with the availability of the new retail shops at Highway 34 and I-25.

The annual rates of increase since 1987 between succeeding years have never been negative for November or December retail sales in Larimer County.  Weld County has had only four instances of negative growth since 1987, none since 1997.  Growth in combined November and December sales (nominal, not real) has never been negative in either county and, therefore, neither has Northern Colorado seasonal sales.

So, strongly positive retail sales growth in nominal dollars during the Christmas season is almost a given in Northern Colorado.  Local efforts to plant and grow new businesses, the development of a high-quality health-care sector, the careful maintenance of our highly desirable living environment and our attraction as a regional shopping center should ensure many years of expanding seasonal retail sales.

John W. Green is a regional economist who compiles the Northern Colorado Business Report’s Index of Leading Economic Indicators.