An Iowa State University retail specialist says recent information on the industry shows discount store giant Walmart remained on top for retail sales at $316-billion, and only one Iowa-based store showed up in the top 100. Economist Ron Prescott says Walmart and other big box stores are hard to catch because of the sheer number of stores they have.
Prescott says overall the retail market is still making its way out of the recession. “I guess we’re probably going to be right about four percent probably this year, we’re hoping for a little bit better than that, but it just seems like we’re on a slow climb in retail sales and everybody senses it. That’s certainly better than were we came from in 2008 and nine,” Prescott says.
He says it’s conservative growth that is going to take longer. Two home improvement chain stores are in the top 10 for retail sales for 2011, which might indicate that more people are fixing up their homes than buying something else. Prescott doesn’t think that’s the major driver in the category.
“You know the whole area of home repair and people trying to do things themselves, that’s been growing for number of years, I mean that’s why you have Menards, Home Depot and Lowes in the position that they are. I just think that’s going to continue,” Prescott says. “I think during a recession you have a tendency to try and save some money and do a lot of the home repairs yourself. I you’re seeing some of that, but I don’t think that’s the major contributing factor.”
West Des Moines-based grocery chain Hy-Vee, had over seven billion dollars in sales for 2011. Prescott says Hy-Vee at 54, was the only Iowa company to show up in the top 100 retail stores. “Seven billion in sales, that’s nothing to sneeze at and four-point-two percent in growth out of 251 stores, that’s still some pretty good statistics and something to be pretty proud of,” he says.
Overall, Prescott says the top company for new growth was the Sprouts Farmers Market, headquartered in Phoenix, Arizona at nearly 72%. He says it’s part of one of the hottest trends. Prescott says there’s been a lot of discussion among economists on this natural, organic grocery store ending up the fasted growing retail store in the U.S.
He says a number of other such stores, such as Whole Foods, are also growing. “That also points to the trend that this natural organic foods (movement) is actually getting some traction behind it and is really becoming formidable as far as the market is concerned.”
Whole Foods recently opened a store in central Iowa, and Prescott says from what he’s seen, these stores can become a challenge to the traditional food stores. “A lot of people think the organic prices are outrageously high, but if you really look at them, that gap is narrowing and they are becoming more affordable, so people say ‘why not’ you know what’s the downside to this,” according to Prescott.
“And so I think you’re seeing people starting to change their diet. We have a lot of folks on medications, a lot of folks who are obese with type two diabetes in the United States, and they’re are looking at alternative ways to manage their health,” Prescott says.
He says fast food chains are even making changes in their menus to try and take advantage of the desire for people to eat healthier, but Prescott says the fast food companies can be limited in how much that can change their menu.