A Closer Look at Retail Growth in New York City
In the August 2012 Economic Snapshot, we looked at the industries driving economic growth in New York City. One of the sectors that showed solid growth from 2010 to 2011 was Retail Trade.
While the number of Retail establishments grew at roughly the same pace as the overall private sector during the year, employment in Retail grew at a faster rate: 3.6 percent from 2010 to 2011, compared with private employment growth of 2.8 percent. When compared with the industry’s performance over the past decade, Retail’s recent boom is even more impressive. Retail businesses only grew about 0.2 percent on average per year in the previous decade, while employment in Retail grew 0.9 percent per year.
StatsBee wanted to take a closer look at growth of Retail Trade in the City. Since a New York City shopping spree is part of many visitors’ agendas, the growth could be related to the greater numbers of visitors to the City (in 2011, for the first time, NYC welcomed more than 50 million international and domestic visitors). So are tourist destination favorites, such as clothing stores, growing quickly? Are visitors’ seemingly insatiable appetites for cupcakes driving an explosion in baked goods?
Tourism is undeniably part of Retail’s success story, but it appears that the residential population is also contributing to the growth. Analyzing the Retail Trade sector at the most detailed NAICS level, StatsBee found that pharmacies and drug stores, convenience stores, and even pet supply stores are among the types of stores that grew the fastest from 2010 to 20111. In other words, many stores that cater more often to residents, rather than tourists, are growing quickly.
Of course, the size of these industries and the number of people they employ vary widely. So what types of stores grew the most in absolute terms? Pharmacies and drug stores added the most new businesses to the City, followed by supermarkets and non-convenience grocery stores.
Another interesting trend to note is the strong growth, both in percentage and absolute terms, of electronic shopping businesses (electronic auctions also had the second-highest growth from 2010 to 2011 in percentage terms, but there are only 13 businesses of this type in the City). Electronic shopping “stores,” which exist solely online without a typical brick-and-mortar storefront, can serve customers not only in the NYC-area, but also nationwide.
In short, tourists have certainly supported retail growth in New York City, but many of the fastest-growing Retail subsectors are actually more focused on residents. Are you a visitor or a resident of NYC? Where do you shop in the City most frequently?