Retail growth signals a strong economy says AEDC
It’s no secret that Alaskans love to shop.
A quick Saturday stroll through one of Anchorage’s many malls verifies that.
“It is very impressive in a $50 billion or so state economy — before the collapse of the price of a barrel of oil — that we see retail is $6.1 billion out of that,” Anchorage Economic Development Corp. President and CEO Bill Popp said at the Jan. 5 Make it Monday forum hosted by the Anchorage Chamber of Commerce.
Direct statewide retail sales totaled just more than $1 billion in 2013, Popp said. Sales in Anchorage accounted for more than half of the state total at nearly $529 million for the last tallied year.
More evidence of the sometimes forgotten industry’s impact on the economy: 8.1 percent of Alaska’s private business earnings in 2013 were in the retail trade, according to AEDC.
Anchorage 5th Avenue Mall General Manager Stephen Welch said overall sales at the popular Downtown center were up 30 percent over 2013 through November.
That enthusiasm for a hot deal is finally translating into retail job growth.
In 2014, the state’s retail industry added approximately 1,300 jobs through November, Popp said. That equates to about 3.5 percent growth in total industry employment.
Retail positions made up roughly 18,000 of the 158,000 jobs in Anchorage last year.
“We were in a great time in terms of retail job growth in what was 2014,” he said.
The growth last year ended a nearly decade-long period of flat employment in the industry.
Statewide, there were 37,200 retail positions in November. Alaska averaged 35,900 such jobs in 2013 and looking back further, average retail employment fluctuated between 35,500 and 36,200 jobs from 2005-12.
Welch noted that nearly 20 percent of jobs in the state are supported in some way by the retail industry.
The job growth is primarily a result of national retail chains entering the Alaska market, according to Popp.
Outdoors sporting goods giants Bass Pro Shops and Cabela’s both opened stores in Anchorage in 2014. Between the two they required about 400 employees when they opened.
With November unemployment at 4.8 percent in Anchorage, Popp said both national and local retailers are complaining about a lack of available workforce.
Unemployment rates in the 5 percent range are typically considered full employment and the sign of a very healthy economy.
“Many of our retailers are bringing in managers from the Lower 48,” Welch said, due to what Popp often refers to as Anchorage’s shrinking available “labor puddle.”
Challenges facing the industry include Alaska’s new minimum wage requirements and, as is the case for many industries, the state’s out-of-the way location.
“One of the biggest challenges for us in brining in national tenants is supply chain logistics,” Welch said.
It’s there where Anchorage’s shopping centers become complimentary and not competitive for business, he said. Supply chain economics become more feasible for retailers that have more than one location in the city or the state.
When it comes to a higher minimum wage, Northway Mall General Manager Mao Tosi said he believes any impact to employers’ bottom lines will be passed along in slightly higher prices.
“It’s just another cost,” he said.
Alaska’s minimum wage increased $1 to $8.75 Jan. 1 and will increase to $9.75 Jan. 1, 2016. Voters approved a ballot measure proposing the minimum wage hikes in the November elections.
Popp said he believes the impact will be minimal because the tight labor market has for the most part driven wages beyond the mandated threshold.
“If you want a good employee you’ve got to pay for it,” he said.
Elwood Brehmer can be reached at [email protected].