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ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR
DOUGHERTY, DAVIS AND SULPHUR IN MURRAY COUNTY




            Suzette Barta, Extension Assistant, OSU, Stillwater
                              (405) 744-6186

          Susan Trzebiatowski, Student Assistant, OSU, Stillwater
                             (405) 744-6186

             Deborah Sharp, FCS/4-H & CED, OSU, Sulphur
                            (580) 927-2262

       Jack Frye, Area Community Development Specialist, OSU, Ada
                            (580) 332-4100

          Mike D. Woods, Extension Economist, OSU, Stillwater
                           (405) 744-9837




         OKLAHOMA COOPERATIVE EXTENSION SERVICE
               OKLAHOMA STATE UNIVERSITY




                              October 2002
                      Analysis Of Retail Trends And Taxable Sales For
                      Dougherty, Davis and Sulphur in Murray County


Suzette Barta                  Susan Trzebiatowski              Mike Woods
Extension Assistant            Student Assistant                Extension Economist
Room 527, Ag. Hall             Room 527, Ag. Hall               Room 514, Ag. Hall
Oklahoma State University      Oklahoma State University        Oklahoma State University
Stillwater, OK 74078-6026      Stillwater, OK 74078-6026        Stillwater, OK 74078-6026
sdb1113@okstate.edu            susanft@okstate.edu              mdwoods@okstate.edu



Deborah Sharp                                                   Jack Frye
FCS/4-H & CED                                                   Area Ext. Comm. Dev. Specialist
1117 W. 2nd St. Room A                                          PO Box 1378
Sulphur, OK 73086-3801                                          Ada, OK 74821-1378
sharpd@okstate.edu                                              jfrye@okstate.edu




                                           ABSTRACT

        The goal of this paper is to provide an analysis of taxable sales for Dougherty, Davis and
Sulphur in Murray County. Basic data is used to provide estimates of trade area capture and pull
factors. Reported sales tax data is also used to analyze trends in the county and area.




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             ANALYSIS OF RETAIL TRENDS AND TAXABLE SALES FOR
             DOUGHERTY, DAVIS, AND SULPHUR IN MURRAY COUNTY

                                        INTRODUCTION

       Oklahoma communities have been concerned with all aspects of economic development

for the past several years. Creating new jobs and additional income is of concern to rural

communities and urban areas alike. Often, retailing is viewed as a "service" sector dependent on

the "basic" sectors such as oil, manufacturing, and agriculture. Export sectors produce goods and

services sold outside the local or regional economy. Service sectors tend to circulate existing

local dollars rather than attracting "new" outside dollars. The retail sector is important, though,

as retail activity reflects the general health of a local economy. Retail sales also produce sales

tax dollars which support municipal service provision. Many local communities are promoting a

"shop at home" campaign to keep local retail dollars in the community. It will not be possible to

stop all out-of-town spending or sales leakage’s for a local economy. Opportunities for

improvement do frequently exist, however. Murray County is involved in the Initiative for Rural

Oklahoma leadership program, and Dougherty, Davis, and Sulphur are the three communities in

the county that collect a city sales tax. The information in this study may help these

communities identify key areas for improvement. Specifically, the objectives of this study are:

       1.   Utilize reported sales tax data to analyze trends in the county and area,

       2.   Provide estimates of trade area capture and market attraction.

       3.   Provide estimates of market attraction, broken out by SIC code.




                                                  1
                            METHODOLOGY AND DATA SOURCES
         A trade area analysis model frequently used is "trade area capture." Trade area capture is

calculated by dividing the city's retail sales by state per capita retail sales. The figure is adjusted

by income differences between the state and relevant local area. The specific equation utilized

is:


                                                       RS C
                                         TACC =
                                                  RS S X PCI C
                                                  PS     PCI S
Where:
         TACc=Trade Area Capture by city,
         RSc=Retail Sales by city,
         RSs=Retail Sales for the state,
         Ps=State Population,
         PCIc=Per Capita Income by county, and
         PCIs=Per Capita Income for the state.

         Trade area capture figures incorporate both income and expenditure factors, which may
be influencing retail trade trends. An underlying assumption of the trade area capture estimate is
that local tastes and preferences are similar to that of the state as a whole. If a trade area capture
estimate is larger than city population then two explanations are possible: 1) the city is attracting
customers outside its boundaries or 2) residents of the city are spending more than the state
average.
         Trade area capture figures can be utilized to estimate the amount of sales going to outside
consumers. To do this a pull factor , which is a measure of an economy's retail sales gap, is
derived using trade area capture figures and city population:

                                                     TAC C
                                            PF C =
                                                      PC
Where:
         PFc=City Pull Factor, and
         Pc=City Population.




                                                     2
       A pull factor of 1.0 means the city is drawing all its customers from within its boundaries

but none from the outside. A pull factor of 1.50 means the city is drawing non-local customers

equal to 50 percent of the city population. A pull factor of less than one means the city is not

capturing the shoppers within its boundaries or they are spending relatively less than the state

average. This is considered leakage of retail sales or a retail sales gap. Additional discussion of

trade area capture and pull factors can be found in the references cited in this report (Barta and

Woods; Harris; Stone and McConnon; Hustedde, Shatter, and Pulver). The Oklahoma

Cooperative Extension Service has been conducting pull factor/gap analysis and sales tax

analysis since 1991 (Woods, 1991).

       City pull factors and trade area capture figures are calculated for fiscal years 1980

through 2001. Data used were sales tax returns as reported by the Oklahoma Tax Commission.

These figures do not include all retail sales (only taxable sales) in an area but provide a proxy.

Population data were obtained from the Oklahoma State Data Center and were consistent with

figures from the1980, 1990, and 2000 Census. Income figures were taken from Bureau of

Economic Analysis estimates for counties. Similar income data for cities were not available so

county income was used as a proxy.




                                                  3
                                 TAXABLE SALES ANALYSIS


       Sales tax returns as reported by the Oklahoma Tax Commission for Dougherty, Davis and

Sulphur are listed in Table 1 for the fiscal years 1980 to 2001. Sales tax returns are important to

a city because they reflect the general health of a local economy and also represent significant

revenue for the city budget. In FY 2001, Dougherty collected over $10,600 in sales tax at a tax

rate of 2.00%, while Davis collected nearly $463,000 at a rate of 2.0%. Sulphur collected over

$1.3 million in fiscal 2001 at a rate of 3.0%.

       Figure 1 plots estimated taxable sales for the same time period in both actual dollars and

inflation-adjusted dollars for the cities of Sulphur and Davis. Sales are estimated from the sales

tax returns and the sales tax rate that is reported. The Consumer Price Index is used to adjust for

inflation. When taxable sales have been adjusted for inflation, Figure 1 shows that “real” sales

for Sulphur have grown, albeit slowly, since 1989. Inflation-adjusted (or “real”) sales have also

grown for Davis since about 1991. The small town of Dougherty (not pictured in Figure 1)

began collecting sales tax in 1994. From 1994 to 1997 “real” retail sales declined, but have been

on the rise since that time--increasing from about $153,000 in 1997 to $249,000 in 2001.

       Table 2 lists trade area capture figures for Sulphur, Davis, and Dougherty from 1980 to

2001. The trade area capture for Sulphur was at a maximum of 6,886 occurring in 2001. Davis’

maximum was 3,637 also occurring in 2001, and Dougherty’s maximum was 84, occurring in

2001. This means, for example, that in 1986 Sulphur “captured” the retail sales of 6,886

persons. Figure 2 presents a graphic of these same trade area capture figures for Sulphur and

Davis. Davis’ trade area has tended to rise since about 1994. Sulphur’s trade area has tended to

stay at or around the 6,500 level but did increase to its highest value of 6,886 in 2001.

       Table 3 lists pull factors for Sulphur, Davis, and Dougherty for the years 1980 to 2001.

The pull factor for Sulphur ranges from 0.969 to 1.436. If Sulphur’s pull factor is currently

                                                 4
about 1.44, the interpretation is that Sulphur is capturing the sales from all the residents of

Sulphur, plus is attracting another 44% more non-local shoppers. The 2001 pull factor for Davis

was 1.39, indicating that Davis also captured both local and non-local shoppers. Dougherty’s

pull factor in 2001 was 0.37. The implication is that Dougherty is not attracting any non-local

shoppers. (This may not be exactly true. It is possible that some rural residents travel to

Dougherty to shop for some items; however, this activity is more than offset by the out-shopping

by local residents. It is likely that residents of Dougherty shop in Sulphur, Davis and Ardmore.)

       Figure 3 shows pull factors for cities and towns in Murray County with a reported sales

tax. Since 1985, Sulphur has had a pull factor consistently greater than 1.0. Davis has also had a

pull factor greater than 1.0 since at least 1990. Davis’ pull factor has grown faster over the last

few years and is now almost even with that of Sulphur. It is difficult for an outsider to point to

one city or the other as the center of trade for the county. Both have strong pull.

       Figure 4 shows pull factors for 461 cities that have sales tax return information available.

The pull factors are presented as a group average by city size. The highest pull factors fall in the

size categories 5,001 to 10,000 and 10,001 to 25,000 and 25,001 to 50,000 in population. The

smallest pull factors fall in the range for cities less than 1,000 in population. Figure 5 plots

Sulphur and Davis’ pull factors compared to other cities with population 1,000-5,000, and

Dougherty’s pull factors compared to other towns with a population less than 1,000. Both

Sulphur and Davis have consistently posted pull factors that are well above the average for other

cities of similar size. Dougherty started off at about even keel with the average for other towns

of similar size, but has dropped significantly below the average in recent years.




                                                  5
                                                       Table 1
                       Sales Tax Collections for Dougherty, Davis, and Sulphur in Murray County
                                                      1980-2001


                Dougherty                                  Davis                                     Sulphur
Year   Months    Rate       Collections    Months         Rate       Collections      Months         Rate       Collections
1980    ---       ---           ---         4/8        1.0%/2.0%     $156,152.13        12          2.00%        $407,421.60
1981    ---       ---           ---         12           2.00%       $208,057.28        12          2.00%        $444,825.06
1982    ---       ---           ---         12           2.00%       $264,432.16        12          2.00%        $537,774.86
1983    ---       ---           ---         12           2.00%       $253,379.63        12          2.00%        $530,567.86
1984    ---       ---           ---         12           2.00%       $256,237.74       2/10       2.0%/3.0%      $660,981.92
1985    ---       ---           ---         12           2.00%       $287,823.27        12          3.00%        $796,481.99
1986    ---       ---           ---         12           2.00%       $269,592.79        12          3.00%        $804,446.66
1987    ---       ---           ---         12           2.00%       $244,019.39        12          3.00%        $810,617.17
1988    ---       ---           ---         12           2.00%       $234,800.31        12          3.00%        $831,590.52
1989    ---       ---           ---         12           2.00%       $245,090.66        12          3.00%        $832,700.97
1990    ---       ---           ---         12           2.00%       $253,458.23        12          3.00%        $899,601.62
1991    ---       ---           ---         12           2.00%       $257,364.10        12          3.00%        $946,654.54
1992    ---       ---           ---         12           2.00%       $270,048.61        12          3.00%        $958,233.69
1993    ---       ---           ---         9/3        2.0%/3.0%     $311,424.11        12          3.00%      $1,001,225.23
1994    12      2.00%         $8,578.67     12           3.00%       $437,821.71        12          3.00%      $1,021,495.39
1995    12      2.00%         $8,021.39     12           3.00%       $447,917.25        12          3.00%      $1,076,820.70
1996    12      2.00%         $8,682.20     12           3.00%       $478,864.58        12          3.00%      $1,132,999.28
1997    12      2.00%         $5,989.57     12           3.00%       $510,374.82        12          3.00%      $1,143,101.37
1998    12      2.00%         $6,775.42     9/3        3.0%/2.0%     $469,998.05        12          3.00%      $1,154,570.86
1999    12      2.00%         $7,759.24     12           2.00%       $375,025.33        12          3.00%      $1,248,602.10
2000    12      2.00%         $8,579.21     12           2.00%       $451,822.25        12          3.00%      $1,250,625.69
2001    12      2.00%        $10,633.31     12           2.00%       $462,957.87        12          3.00%      $1,314,841.56




                                                          6
                 Figure 1. Estimated Retail Sales for Sulphur and Davis,
                        1980-2001, Actual and Inflation-Adjusted

$50,000,000.00

$45,000,000.00

$40,000,000.00

$35,000,000.00

$30,000,000.00

$25,000,000.00

$20,000,000.00

$15,000,000.00

$10,000,000.00

 $5,000,000.00

        $0.00
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                                 Sulphur-Actual          Sulphur-Adjusted           Davis-Actual        Davis-Adjusted



                                                                7
                                     Table 2
               Trade Area Capture for Sulphur, Davis, & Dougherty
                                   1980-2001

        Sulphur                     Davis                  Dougherty
       Trade Area    Sulphur      Trade Area      Davis    Trade Area Dougherty
Year    Capture     Population     Capture      Population  Capture Population
1980     6,164        5,516         2,884         2,782        ---       ---
1981     5,525        5,700         2,584         2,900        ---       ---
1982     6,502        5,750         3,197         3,100        ---       ---
1983     6,532        5,700         3,119         3,200        ---       ---
1984     5,504        5,600         3,003         3,200        ---       ---
1985     6,079        5,500         3,295         3,200        ---       ---
1986     6,564        5,550         3,300         3,150        ---       ---
1987     6,746        5,400         3,046         3,150        ---       ---
1988     6,734        5,300         2,852         3,050        ---       ---
1989     6,510        5,100         2,874         3,100        ---       ---
1990     6,765        4,926         2,859         2,650        ---       ---
1991     6,710        4,945         2,736         2,661        ---       ---
1992     6,518        4,979         2,755         2,685        ---       ---
1993     6,466        4,922         2,711         2,656        ---       ---
1994     6,279        4,908         2,691         2,652        79       132
1995     6,595        4,984         2,743         2,696        74       135
1996     6,718        5,091         2,839         2,749        77       137
1997     6,649        5,055         2,969         2,738        52       136
1998     6,478        5,012         2,881         2,731        57       136
1999     6,786        5,054         3,057         2,769        63       137
2000     6,328        4,794         3,429         2,610        65       224
2001     6,886        4,794         3,637         2,610        84       224




                                       8
        Figure 2. Trade Area Capture for Sulphur and Davis,
                            1980-2001

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

   0
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                              Sulphur    Davis




                                 9
                 Table 3
  Pull Factors for Sulphur, Davis, and
Dougherty in Murray County, 1980-2001


         Sulphur        Davis   Dougherty
  1980    1.117         1.037      ---
  1981    0.969         0.891      ---
  1982    1.131         1.031      ---
  1983    1.146         0.975      ---
  1984    0.983         0.938      ---
  1985    1.105         1.030      ---
  1986    1.183         1.048      ---
  1987    1.249         0.967      ---
  1988    1.270         0.935      ---
  1989    1.276         0.927      ---
  1990    1.373         1.079      ---
  1991    1.357         1.028      ---
  1992    1.309         1.026      ---
  1993    1.314         1.021      ---
  1994    1.279         1.015     0.599
  1995    1.323         1.018     0.546
  1996    1.319         1.033     0.564
  1997    1.315         1.084     0.384
  1998    1.292         1.055     0.419
  1999    1.343         1.104     0.462
  2000    1.320         1.314     0.291
  2001    1.436         1.393     0.373




                   10
              Figure 3. Pull Factors for Cities and Towns in Murray County,
                                         1980-2001

1.600

1.400

1.200

1.000

0.800

0.600

0.400

0.200

0.000
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                                                         Sulphur          Dougherty      Davis


                                                                     11
                     Figure 4. Average Pull Factor by City Size,
                                     1980-2001

1.60

1.40

1.20
                                                                                                                                                                  Less 1000
1.00
                                                                                                                                                                  1-5
                                                                                                                                                                  5-10
0.80                                                                                                                                                              10-25
                                                                                                                                                                  25-50
0.60                                                                                                                                                              Grtr 50

0.40

0.20

0.00
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                                                                                           12
                  Figure 5. Pull Factors for Sulphur, Davis, and Dougherty
                             versus Other Towns of Similar Size

1.600


1.400                                                                                    Sulphur


1.200
                                                                                                   Davis

1.000                                                                                                                Sulphur
                                                                                                                     Davis
0.800                                                                                                                1,000-5,000
                                                                                                                     Dougherty
0.600                                                                                                                Less 1,000


0.400


0.200


0.000
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                                                                    13
                 SALES GAP ANALYSIS FOR SULPHUR AND DOUGHERTY, OK

      For purposes of this study, a sales gap analysis refers to a pull factor study that has been analyzed

by SIC code for the 8 retail sectors. Sales gap coefficients may be interpreted in exactly the same

manner as are pull factors. See Table 4 for sales gap analyses for Sulphur and Davis. Data for Davis

first became available for FY 1999. Sales tax data by SIC code is not available for Dougherty; thus a

gap analysis could not be performed for that community. Community leaders in Dougherty should

consider requesting sales tax data by SIC code from the Oklahoma Tax Commission. (Local requests

determine the availability of the data to other sources such as the Oklahoma Cooperative Extension

Service.) Table 5 provides a detailed description of the 8 retail SIC categories.

      For Sulphur’s Building and Gardening Materials, the number of shoppers has decreased from

2,892 in FY 1998 to 2,277in FY 2001. Sulphur's population is about 5,000; thus, in 2001, this sector of

the Sulphur economy was only capturing about 48% of the local residents. For Davis, this sector

remained fairly stable from 1999-2001. In 2001, Davis captured about 74% of its local population.

      The category of General Merchandise tends to be dominated by Wal-Mart. Wal-Mart reports all

its sales under this category (even though it sells clothing, grocery items, etc. as well). In general, towns

that have a Wal-Mart will post sales gap coefficients that are greater than 1.0 for this category. Those

without a Wal-Mart will have pull factors less than 1.0. Sulphur and Davis fit this rule quite well.

Davis does not have a Wal-Mart, and their gap coefficient in this category was 0.426 in FY 2001.

Sulphur does have a Wal-Mart and their gap coefficient in 2001 was 2.181. This value has been steadily

rising since 1998.

      Grocery stores in both Sulphur and Davis had high gap coefficients in 2001. The value for Davis

was 1.949 and for Sulphur it was 2.003. Consumers tend to appreciate the convenience of shopping for

groceries close to home. In addition, most residents outside of the city limits will travel into the small



                                                     14
town grocery store to shop; consequently, it is common to find that even very small towns post high gap

coefficients for this sector.

      SIC category 55 is difficult to interpret because motor vehicle and gasoline sales are exempt from

municipal sales tax in Oklahoma. Most of the sales tax collection reported under this category appears

to stem from auto parts stores and other retail sales from gas stations. For instance, most gas stations

sell snack items, tires, some auto parts, oil, anti-freeze, etc. Sales tax collections for Sulphur and Davis

in this category indicate that both communities did well, attracting their own population plus attracting

non-local customers. The success in this category for both towns probably stems from their locations—

Davis near I-35 and Sulphur right off the Chickasaw Turnpike.

      Apparel sales are reported under SIC 56. It is very difficult for small to medium sized towns to

post high sales coefficients in the category of apparel. Many small towns have nearly zero sales in this

category, and it is common to see sales gap coefficients that are less than 0.10 in these towns. Cities

with large malls tend to be the most successful at capturing the market. Sulphur’s apparel stores

captured a total of 458 shoppers in FY 2001 for a gap coefficient of 0.095. Davis attracted 8 shoppers in

2001 for gap coefficient of .003. This category has been consistently dropping for Davis.

      SIC 57 reports Furniture and Home Furnishings. Also included are appliance and electronics

stores, drapery and floor covering stores, and music stores. This category is generally viewed from the

perspective that most furniture purchases are made in either Tulsa or Oklahoma City. Oklahoma City,

for example, has a large cluster of retail furniture stores centralized in one geographic area. Murray

County residents may also travel to Ada or Ardmore for furniture. The number of annual shoppers in

this category in 2001 for Sulphur was 2,849 for a gap coefficient of 0.594. Davis’ gap coefficient was

0.137.




                                                     15
      Eating and Drinking Places, SIC 58, is one of the most straightforward retail sectors. It contains

restaurants and bars. Restaurants and bars in Sulphur captured 5,268 customers in FY 2001.

Restaurants in Sulphur tend to attract a total number of shoppers that is equal to the town’s population—

plus a few more. The same was true for Davis in 2001 attracting 2,697 shoppers for a gap coefficient of

1.033.

      SIC 59, or Miscellaneous Retail, contains a host of retail activity, including pharmacies, florists,

liquor stores, and antique stores. Sulphur's pull factor in this category increased somewhat from 0.452

in 1998 to 0.509 in 2001. Davis’ gap coefficient in this category was a bit higher than Sulphur’s in 2001

at 0.613.




                                                     16
                                                          Table 4
                                     Retail Sales Gap Analysis by Standard Industrial
                                        Classification (SIC) Code Fiscal 1998-2001
                                                          Sulphur
                                                 Trade Area Capture                             Sales Gap Coefficient*
                                         FY 1998 FY 1999 FY 2000 FY 2001            FY 1998      FY 1999     FY 2000 FY 2001
Building, Gardening & Merchandise (52)      2,892     3,003       3,169     2,277       0.577        0.594     0.661     0.475
General Merchandise (53)                    9,224     9,749       9,597    10,457       1.840        1.929     2.002     2.181
Food Stores (54)                            9,544     9,752       9,515     9,600       1.904        1.930     1.985     2.003
Automobile Dealers & Gas Stations (55)      5,929     6,861       6,992     7,084       1.183        1.357     1.458     1.478
Apparel & Accessory Stores (56)               265       360        321       458        0.053        0.071     0.067     0.095
Furniture & Home Furnishings (57)           2,530     2,401       2,260     2,849       0.505        0.475     0.471     0.594
Eating & Drinking Places (58)               5,569     5,301       4,890     5,268       1.111        1.049     1.020     1.099
Miscellaneous Retail (59)                   2,265     2,325       2,472     2,441       0.452        0.460     0.516     0.509

                                                          Davis
                                                 Trade Area Capture                             Sales Gap Coefficient*
                                         FY 1998 FY 1999 FY 2000 FY 2001            FY 1998      FY 1999     FY 2000 FY 2001
Building, Gardening & Merchandise (52)      ---       1,905       2,102     1,929       ---          0.688     0.805     0.739
General Merchandise (53)                    ---       1,109       1,028     1,112       ---          0.401     0.394     0.426
Food Stores (54)                            ---       4,786       5,078     5,087       ---          1.728     1.946     1.949
Automobile Dealers & Gas Stations (55)      ---       4,464       4,127     4,357       ---          1.612     1.581     1.669
Apparel & Accessory Stores (56)             ---         105         45          8       ---          0.038     0.017     0.003
Furniture & Home Furnishings (57)           ---         427        445       357        ---          0.154     0.170     0.137
Eating & Drinking Places (58)               ---       2,455       2,565     2,697       ---          0.886     0.983     1.033
Miscellaneous Retail (59)                   ---       1,568       1,657     1,601       ---          0.566     0.635     0.613

                                                           17
                                           TABLE 5
                                     TYPES OF BUSINESSES
                              DESCRIBED BY THE RETAIL SIC CODES

52 Building Materials                                          58 Eating and Drinking Places
       Lumber yards including home centers
       Paint and wallpaper stores
       Glass stores                                            59 Miscellaneous Retail
       Hardware stores                                               Drug and proprietary stores
       Retail Nurseries                                              Liquor Stores
       Lawn and garden supply stores                                 Used merchandise stores including antique
       Mobile Home dealers                                           stores and pawn shops
                                                                     Sporting goods stores
53 General Merchandise Stores                                        Book stores
      Variety stores                                                 Stationary stores
      Department stores                                              Jewelry stores
      Warehouse clubs                                                Hobby, toy, and game shops
      General combination merchandise stores                         Camera and photographic supplies stores
                                                                     Gifts, novelties and souvenirs
54 Food Stores                                                       Luggage and leather goods stores
      Grocery stores (Supermarkets)                                  Sewing, needlework, and piece goods stores
      Convenience stores both with and without gasoline              Catalog and mail order sales (includes e-
      Meat and fish markets                                          commerce stores)
      Fruit and vegetable markets                                    Vending machine operators and direct selling
      Candy, nut and confectionery stores                            establishments
      Dairy stores                                                   Fuel oil dealers
      Retail Bakeries                                                Bottled gas dealers
                                                                     Florists
55 Automotive Dealers and Gasoline Service Stations                  Tobacco Stores
      Motor vehicle dealers (new and used)                           Newsstands
      Tire stores                                                    Optical goods stores
      Auto supply stores                                             Cosmetic stores
      Gasoline stations                                              Pet and pet supply stores
      Boat dealers                                                   Hearing aid and artificial limb stores
      RV dealers                                                     Art dealers
      Motorcycle dealers                                             Telephone and typewriter stores

56 Apparel and Accessory Stores
      Men and boys apparel
      Women’s apparel and accessories
      Children and infant’s wear
      Family apparel
      Shoe stores
      Custom tailor and seamstresses

57 Furniture and Home Furnishings Stores
      Furniture stores
      Floor covering stores
      Drapery, curtains and upholstery stores
      Pottery and crafts made and sold on site
      Household appliance stores
      Radio and TV and consumer electronics stores
      Computer and computer software stores
      Record and prerecorded tapes stores
      Musical instruments stores

.

                                                          18
                         BUSINESS DEVELOPMENT STRATEGIES

      Retail trade trends reflect the overall health of a local economy. All out shopping or sales

leakage cannot be stopped. Often, larger economic trends (State-National-Global) overwhelm

retail opportunities. There are programs and actions which can assist retail trade activities,

however.

      Concerned leaders and business persons can focus on business development by forming a

business assistance committee to begin implementing some of the assistance activities or

working with the existing chamber of commerce. The following activities were in part of a retail

trade improvement program. These activities can improve the climate for business and show the

community's commitment to support local business.

1.   Analyze the local business sector to identify needs and opportunities to be pursued by the

     program. Businesses often do not have the resources to study the economy (local, regional,

     and national) and how they fit in. They need practical data and analysis that will help in

     their individual business decision making. In particular, economic analysis can identify

     voids in the local or regional market that can possibly be filled by expanding or new

     business. Examples of analysis include the pull factor analysis reported here and consumer

     surveys to identify needs and opportunities.

            In addition to economic analysis, information is needed on the needs or problems of

     individual businesses and of the business district as a whole. As needs are identified, action

     can be taken to improve the situation. For example, a business may need help in preparing a

     business plan to qualify for financing. Perhaps the appearance of buildings and vacant lots

     is detrimental to attracting people to be business district, or perhaps poorly coordinated store

     hours are a hindrance. Once these needs are identified, a business development program can




                                                 19
     initiate action. A periodic survey of local business needs can form the basis of a business

     development program's work plan.



2.   Provide management assistance and counseling to improve the efficiency and profitability of

     local businesses. Many local businesses are owner-operated, earn low profits, and have

     difficulty obtaining financing. Businessmen often need additional education and training in

     improving business management skills like accounting, finance, planning, marketing,

     customer, relations, merchandising, personnel management, or tax procedures. This

     assistance and counseling can be provided through seminars and one-to-one aid. Sources of

     assistance include the Service Corps of Retired Executives (SCORE), Small Business

     Development Center program sponsored by the Small Business Administration,

     Universities, Technology Centers, Oklahoma Department of Commerce, and the

     Cooperative Extension Service. The intent is to aid small businesses in becoming more

     competitive.



3.   Assist new business start-up and entrepreneurial activity by analyzing potential markets and

     local skills and matching entrepreneurs with technical and financial resources. Establishing

     a business incubator is another way to assist new businesses. An incubator is a building

     with shed space or service requirements that reduce start-up costs for new businesses.

     Incubators have been successful in many locations but are not the right answer for every

     town. A successful incubator must have long-range planning, specific goals, and good

     management in order to identify markets and entrepreneurs.



4.   Promote the development of home-based enterprises. Home-based work by individuals is

     increasing because of the flexibility offered and because in some areas, it may be the most
                                                20
     realistic alternative. Home-based enterprises can include a great variety of full or part-time

     occupations such as food processing, quilting, weaving, crafts, clothing assembly, mail order

     processing, or assembling various goods.



5.   Provide assistance in identifying and obtaining financing. Small businesses often have

     difficulty obtaining long-term bank financing for expansion because they lack assets to

     mortgage, cannot obtain affordable terms or rates, or cannot present a strong business plan.

     A business development program can identify public loan programs and package them with

     private loans to make projects feasible.



6.   Provide assistance in undertaking joint projects such as:

           improved appearance

           improved management of the commercial area

           building renovation

           preparation of design standards

           joint promotions and marketing

           organizing independent merchants

           special activities and events

           fund raising

           improved customer relations

           uniform hours of operation



     Undertaking these projects requires cooperation, good organization, and efficient

     management. These projects can improve a business district's competitive position and


                                                 21
     attract new customers. The Oklahoma Main Street Program provides many good examples

     of towns working together for economic revitalization. The Main Street Program developed

     by the National Trust for Historic Preservation, is built around the four points of

     organization, design, promotion, and economic restructuring.



7.   Develop a one-stop permit center. There is great deal of red tape involved in starting a

     business including registering a name, choosing a legal form, and determining what licenses,

     permits, or bonds are needed. Other concerns include internal revenue service requirements,

     unemployment insurance, sales tax permits, and state withholding taxes. Having this type of

     information available in one location will make life easier for potential businesses.



8.   Involve active organizations and the media. Groups such as the chamber of commerce, civic

     clubs, etc. can encourage a healthy business climate. The local media can also support small

     business and aid in developing awareness of the importance of local business.




                                                 22
                                           SUMMARY

    This report has analyzed taxable sales trends for the communities of Sulphur, Dougherty, and Davis

in Murray County. The town of Dougherty is very small with a population of 224. Its performance in

terms of pull factors has fallen somewhat below the average for other communities with a population

below 1,000. Residents of Dougherty probably shop in Sulphur and Davis as well as some of the other

regional trade centers such as Ardmore and Ada.

    Sulphur, the county seat of Murray County, tends to post higher pull factors than most cities of

similar size. Because it is larger than Davis and because it does have a Wal-Mart, it is most likely the

trade center of the county. Even so, the smaller town of Davis does quite well in terms of retail pull and

has a pull factor that is very close to that for Sulphur. Despite their strengths, Sulphur and Davis

certainly suffer from out-shopping by its residents. According to the store locator at www.walmart.com,

the closest Wal-Mart Supercenter is just 21 miles away in Ardmore; furthermore, the very large city of

Norman, home of Sooner Mall, is just 50 miles away.




                                                    23
                                           REFERENCES

Barta, S.D. and M.D. Woods. Gap Analysis as a Tool for Community Economic Development.
    WF 917, Oklahoma Cooperative Extension Service, Oklahoma State University,
    <http://agweb.okstate.edu/pearl/agecon/resource/wf-917.pdf>, 2000.

Harris, Thomas R. "Commercial Sector Development in Rural Communities: Trade Area Analysis."
    Hard Times: Communities in Transition. Western Rural Development Center, WREP 90,
    September 1985.

Hustedde, R., R. Shatter, and G. Pulver, Community Economic Analysis: A How To Manual. Ames,
    Iowa. North Central Regional Center for Rural Development, 1984.

Oklahoma Department of Commerce, Research and Planning Division. Population Estimates for State,
    Counties, and Cities, Oklahoma: April 1, 1980-July 1, 1989. December 1990.

Oklahoma Tax Commission City Sales Tax Collections Returned to Cities and Towns in Fiscal, 1980 to
    2001. (Fiscal Year End-June 30).

Stone, K. and J.C. McConnon, Jr. "Trade Area Analysis Extension Program: A Catalyst for
    Community Development," Proceedings of Realizing Your Potential as an Agricultural Economist
    in Extension. Ithaca, New York, August 1984.

Tennessee Valley Authority. "Focus on the Future," Workbook provided at RedArk Development
    Authority Symposium on Economic Development Leadership, Shawnee, Oklahoma, June 1986.

U.S. Department of Commerce Bureau of The Census. Resident Population by County, 1990 to 2001.
    http://www.census.gov/populations/extimates/county/ (June 2002).

U.S. Department of Commerce, Bureau of Economic Analysis. "Personal Income by Major Source and
    Earnings by Major Industry," Regional Economic Information System, 1980 to 2000.

Woods, Mike D. Retail Sales Analysis in Oklahoma By County, 1977, 1982, 1987. Bulletin B-801,
   Agricultural Experiment Station, Oklahoma State University, October 1991.




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