Report: Texas, Washington DC Areas Poised for Retail Success

Report: Texas, Washington DC Areas Poised for Retail Success
Pitney Bowes Business Insight predicts top 10 metros to see strong sales through 2010
December 09, 2009

By Alex Palmer

The retail stars look big and bright for Texas. Pitney Bowes Business Insight released its list of the top 10 U.S. metropolitan areas most likely to experience retail success, and Texas cities took four of the top spots.

In addition to Austin, Houston, Dallas and San Antonio, the top cities also included Seattle, Baltimore and Washington DC. Pitney Bowes Business Insight drew on data from the past six quarters and used its MarketPulse analysis tool, which uses macroeconomic variables to predict regional store performance.

The company predicted the markets that would have the highest sales growth over the next six quarters in the drug store, high-end, mid-tier and value retail sectors.

The value retail sector played a role in a number of the top 10 markets, including Kansas City, Seattle and San Antonio, where consumers’ tightening budgets have made more value-oriented outlooks a more significant draw.

“Fiscally concerned shoppers have altered their shopping destination to favor value retailers,” said Lynda Bednarczyk, client services manager for retail, restaurants and real estate at Pitney Bowes Business Insight. “The value retailers have not seen the dramatic shifts in comp sales that mid-tier and especially high end have seen this past year.”

But Bednarczyk pointed out that the scoring system, which Pitney Bowes deploys, takes the average score across all sectors for each market, so value retail is not the only thing driving a market's inclusion on the list. Strong performance in high-end retail outlets is expected to buoy markets in Providence, RI, Houston and Baltimore.
 The study looks at a number of economic factors that played a role in the rebound or growth of these markets, such as a burgeoning housing market in Columbus, OH or improving employment in Baltimore and Washington, DC. Bednarczyk pointed out that in a few cases the impact of these factors led to surprising results.

“I don't think Kansas City is normally thought of as a high growth market, but it makes perfect sense given the diversity of jobs in the area that it has faired well.”