There’s more to the Tri-Cities retail story than just the Pinnacle


How many times have you heard someone say, “the Pinnacle is sucking all the oxygen out of retail in the Tri-Cities?”

2015 share

HOW THE 2015 RETAIL PIE WAS DIVIDED. CLICKING ON GRAPHIC RENDERS A LARGER VERSION

There’s little argument that Steve Johnson’s outdoor mall is the region’s hot ticket. It has the best new theater, a growing inventory of stores and restaurants… a Steak and Shake.  And, the Pinnacle is growing Bristol’s retail position by leaps and bounds with a magnetism that some wags predict will pull outlets from other markets to its Bristol campus.

There’s only one problem.  Not all of that common knowledge is accurate.

In fact, if you measure retail power by the share of the region’s total sales things haven’t changed all that much.  And despite the fact that Bristol’s dollar sales have increased 19.4% since 2014, it claimed a slightly smaller share of total retail sales that it did in 2007 or 2008. It also owns a smaller piece of the pie than Johnson City or Kingsport. Those shares are computed from data that was not adjusted for inflation, so there’s some marginal overstatement of growth.

Bottom line: While new store, restaurant and entertainment announcements keep Johnson’s development at the pinnacle of public attention in the Tri-Cities the other markets have also seen robust growth.  Among the region’s three major cities Johnson City still claims the biggest share of retail sales, followed by Kingsport then Bristol. And the largest piece of that retail pie goes to the areas outside those major cities.

Drill down a little deeper and there are more contradictions to some of the common knowledge about the region’s retail growth.

share

DIVIDING THE RETAIL SALES PIE. CLICKING ON GRAPHIC RENDERS LARGER FILE

For example, Kingsport is the only city with a retail sector performing above the pre-recession peak. That happened without major new shopping areas; however, what it does match up with is employment levels that are before pre-recession levels.

Dr. Steb Hipple pointed out in his final Tri-Cities Retail Sales Report, “overall, 2015 was the best year in local retailing since the Great Recession of 2008-09.” He also points out, “the outlook for the future is generally positive, but there are concerns. The slowdown in retail growth in the nation could reflect some consumer exhaustion after six years of higher spending levels. The data for the next few quarters will be critical. The regional economy is now plugged into the national business expansion, and we are seeing strong growth in employment and retail trade. Any slowdown in the growth of the national economy will impact regional business conditions as well.

“The three East Tennessee metro areas show a mixed pattern. Chattanooga’s sales volume is only 0.9% above the 2007 level. Knoxville and the Tri-Cities are still about 4% below their 2007 retail peak. Among the Tri-Cities, Kingsport has matched the national recovery – dollar sales are up 18.9% and real sales are up 4%. Johnson City’s retail volume is down 3.2%, and surprisingly, Bristol’s retail volume is still 8.4% below the pre-recession high point. These regional and local figures suggest there is still ample room for continued retail sales growth.”

That room for growth could mean that future reports will show bigger increases in Bristol and Johnson City as they continue recovering to pre-recession levels. The more interesting thing for folks who like to watch such things is how Kingsport’s retail sector continues to perform since it’s above pre-recession levels and in step with the national retail performance pattern.

MSA share

CLICKING ON GRAPHIC RENDERS LARGER VERSION

 

 

 

Comments

  1. Don:

    Sounds like Bristol is meeting some pent up demand. I’m curious to see where Bristol is in a year or two.

    [image: FTDD]

    Ken Rea

    First Tennessee Development District

    Northeast Tennessee Economic Development Corporation

    3211 N. Roan St.

    Johnson City, TN 37601

    423/722-5098

    *From:* Core Data [mailto:comment-reply@wordpress.com] *Sent:* Saturday, March 12, 2016 8:39 AM *To:* krea@ftdd.org *Subject:* [New post] There’s more to the Tri-Cities retail story than just the Pinnacle

    donfenley.com posted: “How many times have you heard someone say, “the Pinnacle is sucking all the oxygen out of retail in the Tri-Cities?” There’s little argument that Steve Johnson’s outdoor mall is the region’s hot ticket. It has the best new theater, a growing invent”

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