Sales per $1,000 of PY
ECON First believes that business success centers around knowing the economic and demographic characteristics of their primary market area. While business experience, insights and intuition are important, they are substantially advanced by hard data.
Every market area is unique and the data proves it. Among other measures, ECON First tracks industry sales per $1,000 of personal income. This measure is derived from a combination of data from the BLS Quarterly Census of Employment and Wages, the Department of Commerce Census of Business, and the BEA annual income accounts.
The example below evidences how important it is to gather data on each market area.
THE BUCKEYE STATE
ECON First used its proprietary measure to estimate full service restaurant sales per $1,000 of personal income for the state of Ohio and some of its counties. The results are show in the chart below.
Full Service Restaurant Sales per $1,000 of Personal Income
While full service restaurant sales per $1,000 of personal income are similar between the nation and the state of Ohio ($17.18 vs $16.87), there is wide variation among the counties.
Urban Hamilton County encompasses most of the City of Cincinnati. Since 2011 total full service restaurants sales have soared 39% although total personal income has increased only 7%. (Sales per $1,000 of personal income are $25.15.) Obviously, as shown in the chart below, the drivers for full restaurant sales in a primary market area go well beyond personal income. In this instance, important drivers include urban agglomeration economies and Cincinnati as a destination for both business trips and tourism.
Total Growth in Personal Income, 2011-15
Licking County is fringe to the Columbus metropolitan area and has full service restaurant sales of only $10.75 per $1,000 of personal income. Despite high growth in personal income, much of the full restaurant sales leaks out to the urban city.
The more rural Clark County has slow growing personal income and its full service restaurant sales per $1,000 of personal income has fallen since 2011.
Restating the obvious, each primary market area is unique. To fully understand the market health for any particular industry requires a comprehensive analysis of conditions.
ECON First specializes in providing the hard data that allows business owners to make more informed decisions regarding start-ups. expansion, marketing channels, and pricing strategies. It is inappropriate to apply summary measures taken from nation or state level data and assume they apply to specific primary market areas. A more comprehensive analysis is required for business success.
Let ECON First help you to better understand your primary market.
Dr. John E. Stapleford