Retail Trade

McAllen is the retail center of South Texas and Northern Mexico, drawing from a consumer base of over 10 million people within a 200-mile radius.

In the bi-national metropolitan area, McAllen retailers serve a market population of 1.8 million. McAllen is represented by 40 of America’s top 100 retailers and is ranked 4th in Texas in per capita sales tax receipts.

La Plaza remains one of the Simon Properties highest grossing retail malls (per square foot) in the United States, boasting average sales of over $650 per square foot. Many national retailers located there are among the most profitable stores in their chains. The mall is known to generate more than 18 million visitors annually.

The ACCRA Cost of Living Index measures relative price levels for consumer goods and services in participating areas. The average for all participating places equals 100, and each participant’s index is read as the percentage of the average for all places. The summary below places McAllen MSA very favorably on the composite index.

On a monthly basis the Chamber publishes the McAllen Area Economic Pulse. The Pulse measures the economic activity for McAllen, Mission, Pharr and Edinburg in the following areas: retail sales, motor vehicle sales, lodging tax receipts, airline boarding’s, construction permits, new home permits, home sales, average home sale price, Hidalgo bridge crossings, peso exchange rate, wage and salary employment and unemployment numbers. This chart is a graphic representation of the dynamic changes in the economic index January 1996-December 2007.

Business & Community " Retail Trade "

It is an undisputed fact that McAllen is the retail center of South Texas and Northern Mexico, drawing from a consumer base of over 10 million people within a 200-mile radius. In the bi-national metropolitan area, McAllen retailers serve an immediate market population of 1.8 million. McAllen is represented by 40 of America’s top 100 retailers. The Texas Comptroller tracks the Top 20 Cities in Texas on a regular basis.

Retail sales tax collections provide the clearest illustration of McAllen’s retail sales phenomenon. The table below presents the top 20 Cities in Texas in terms of the Sales Tax Collections for 2007. It also presents the most recent Census population estimates for 2006. By dividing Sales Tax collections by Population, the Sales Tax Per Capita is revealed. However, by including per capita income, number of households and total retail sales in each city, a whole new set of conclusions can be made . While McAllen is 19th in Per capita Income, 16th in the number of Households, 15th in Population, and 11th in Sales Tax Collections, among the top 20 cities on the Comptrollers list, McAllen is ranked:

• 3rd in total Retail Sales Per Household ($ 84,701)
• 1st in Retails Sales Per Capita ($ 27,395)
• 4rd in Per Capita Sales Tax Collections ($439.69)

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Considering that the State’s population is almost 24 million and statewide retail sales were approximately $350billion, per capita retail sales statewide amounts to $14,580 while McAllen’s is almost two times the state average and 142% of the average of the top 20. The following table summarizes data obtained from the Texas Comptroller and presents the Gross Retail Sales by Category for selected cities in Hidalgo County. While it takes some time to fully understand all of the data several items are indisputable.

• In 2007 the City of McAllen achieved over $3.58 Billion in total retail sales.
• This represents 46% of all retail sales in Hidalgo County and 103% of all retail sales in Cameron County
• According to the US Census Bureau, in 2006 McAllen had only 18.7% of Hidalgo County population,
• McAllen’s share of 2007 retail sales were follows:
  • 51.1% of Motor Vehicle and Parts Dealers,
  • 68.2% of Furniture and Home Furnishings Stores,
  • 79.9% of Electronic and Appliance Stores,
  • 32.7% of Building Material and Garden Equipment and Supplies Dealers,
  • 26.6% of Food and Beverage Stores,
  • 43.6% of Health and Personal Care Stores,
  • 20.8% of Gasoline Stations,
  • 71.0% of Clothing and Clothing Accessories stores,
  • 65.8% of Sporting Goods, Hobby, Book, and Music Stores,
  • and 54.6% of General Merchandise Stores.

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The Charts that follow present the dollar amount of retail sales by category that occurred in cities in Hidalgo County (in million $).

The Chart on the left compares 2002 vs. 2007 data for the County and each of the identified cities in the County. Because of McAllen’s market dominance, it is shown in the orange column separately from the other cities which are shown individually in the stacked column.

The Chart on the right illustrates: -the percent change between 2002 and 2007 of each cities share of the category, -their percent of total sales within that category, -and the relative change in population of that city between 2000 and 2006 By doing this, one can begin to understand the dynamic shifting of retail activity that is occurring within the region. It foreshadows coming shifts as well.

CHART 1 illustrates that Hidalgo County retail sales of the category of Motor Vehicle and Parts Dealers between 2002 and 2007 increased from $1,180.6 million to $1,595.7 million. During the same period McAllen’s portion increased from $557.7 million to $815 million.

CHART 2 While McAllen achieved 51.1% of the County Automotive Sales category with only an 18.8% change in the population, there was a 31.6% change in the amount of sales in McAllen as compared to to 23.3% in Mission, and 11.2% in Weslaco

CHART 3 tells a great deal about growth in Hidalgo County. Between 2002 and 2007 Buildings Material, Garden Equipment and Supplies Sales increase from $359.9 million to $584.6 million.

CHART 4 shows that Building Material sales increase 38.4% County wide during the reporting period, but Mission and McAllen saw the greatest increase in market share.

CHART 5 Reports on Clothing and Clothing Accessories category. During the reporting period, sales increased from $416.5 million to $650 million. But 71% of those sales occurred in McAllen…over $461 million. La Plaza Mall, Las Tiendas, the Pavilion and Downtown McAllen lay claim to the primary locations for this category of sales.

CHART 6 Indicates that while several Hidalgo County communities are experiencing a slight decline in this sales category, McAllen sales are still very strong and driving the growth for the general county total. Part of the county’s growth is driven by the Chelsea Outlet Mall in Mercedes, and new retail projects in Mission and Edinburg, which should further improve the numbers in the coming years.

CHART 7 Reports on Food and Beverage category. During the reporting period, sales increased from $805.4 million to $1,077.3 million. But unlike the other categories, McAllen’s share is more inline with its share of population. This is not unusual as most people shop for groceries where they live. As new HEBs are built in adjacent cites, McAllen’s share is likely to diminish.

CHART 8 reveals that the percent of growth in this category was very similar in each of the markets studies, with the exception of Pharr. There, the shift in sales to the new HEB in San Juan is clearly identifiable.

CHART 9 Reports on General Merchandise Sales. During the reporting period, sales increased from $988.5 million to to $1,638.4 million. But unlike the others, McAllen’s share is more than 55% of this category among the selected cities. That market dominance will shift during the balance of this decade as major retail centers open in Mission, Edinburg, and Mercedes.

CHART 10 reveals that the percent of change in this category was centered in Weslaco and Edinburg during this reporting period.

CHART 11 Reports on Home Furniture Sales. During the reporting period, sales increased from $127.7 million to $205.9. This increase is directly related to increases in housing starts during the same period. McAllen’s share is 68% of this category with more than $140 million in 2007.

CHART 12 reveals that the percent of change in this category was centered in Pharr and McAllen during this reporting period.

CHART 13 Reports on Miscellaneous Sales. During the reporting period, sales increased from $291.9 million to $415.1. This increase is directly related to overall increases in all retail sales during the same period. McAllen’s share is 39% of this category with more than $161 million in 2007.

CHART 14 reveals that, with the exception of Weslaco, all of the major cities in Hidalgo County experienced substantial increases in this category.

The table below reveals the historical growth in retails sales tax collections in McAllen since 1997, when the voters approved a 0.5 percent increase in retail sale tax rate taking it to 2%. The red columns represent history and the green are projections based on that history. Only time will tell the economic impact on this projection of projects like Chelsea Outlet Mall in Mercedes, the Sharyland HEB/Target Center and the future US 281/Trenton retail center