A market research firm projects Wyoming to be the worst-performing state when it comes to holiday retail sales this year, and state business leaders say there’s some truth to the analysis.
DesignRush, a resource site for businesses with reviews, rankings and recommendations, said Thursday that it projects Wyoming’s holiday retail sales to fall 3.2% compared with last year. The forecast is especially striking considering the state’s per capita income of $68,457 is among the highest in the United States, with residents spending an average of $48,911 annually.
But much of that spending is being done online and not through in-state retail stores, the firm said.
Part of the reason is the country’s least populated state also has the fewest number of retail stores per capita.
“This lack of local options means residents may be relying heavily on out-of-state retailers and eCommerce stores for their shopping needs, depriving Wyoming’s economy of critical holiday revenue,” the study says.
Wyoming Chief Economist Wenlin Liu said the findings are “probably somewhat true.”
“We’re a small state with a small population,” he told Cowboy State Daily.
Online Growth
Liu said many residents make big purchases on items such as cars or furniture in more populous states because they’re more likely to have a greater selection. Online sales, like much of the nation, also are growing in Wyoming.
It’s not a trend Liu said the state views as a bad thing since a 2018 U.S. Supreme Court ruling eliminated the requirement that businesses have to be located physically in a state for that state to collect sales tax.
Online sales in Wyoming now make up about 7.5% of the state’s total sales tax collection, Liu said. The amount collected from online sales is up 20% this year compared to last year.
“The younger generation, they purchase everything online,” Liu said.
While the economist saw some validity to the research, he said he was skeptical of the state’s ranking.
“I’m not sure we’re the worst,” he said. “Wyoming’s economy, while somewhat slower, keeps growing.”
DesignRush’s projections are based on sales data from October to December between 2018 and 2023 with an emphasis on clothing and accessories, the firm stated.
Mark Moser, executive director of the Wyoming State Liquor Association, said it’s no secret that many Wyomingites shop online.
“Remote sales do have a direct impact on Wyoming retailers,” he said.
They have less of an impact on liquor sales since online purchases of spirits are restricted. That makes alcohol sales a good barometer on whether the holiday retail season is up or down, at least when it comes to booze.
Moser’s view is that liquor sales seem down this year, but he said it’s a trend that extends across the nation.
“This year, nationally, sales have been pretty stagnant,” he said.
Buyers are being more discerning, choosing more expensive specialty alcohol, but purchasing less of it, he said.
Hawaii Leads Nation
Another reason the study claims Wyoming’s retail sales lags is that retailers spend “significantly” less on advertising than other states with similar income levels.
“This lack of visibility prevents local retailers from effectively engaging with their audience and capturing potential sales,” the study says.
While Wyoming’s sales tax rate is one of the lowest in the nation, “a clear competitive advantage for local businesses,” retailers are not letting consumers know of the potential savings available shopping locally, the study says.
“Businesses that recognize and act on this potential stand to gain from a market ripe for development, while residents benefit from improved shopping access and options in their own state,” it continues.
On the other end of the spectrum, Hawaii leads the nation in projected holiday retail sales, according to DesignRush’s forecast. The state is expected to see retail sales grow by 11.7% compared with last year. Growth in tourism was a major factor driving the increase.
Nationally, the National Retail Federation expects retail sales during the November and December holiday season to grow between 2.5% and 3.5% over last year.
A near record 197 million people shopped during the Thanksgiving weekend through Cyber Monday, the Federation said.
“Based on data seen so far, conditions are shaping up for a successful holiday retail season,” National Retail Federation Chief Economist Jack Kleinhenz said in a statement released this week.
Justin George can be reached at justin@cowboystatedaily.com.
