First quarter retail sales are strong. Here’s why Pasco’s jumped by almost $200 million
Retail sales for the first quarter of the year are in, and show the economy remains strong in the Tri-Cities.
In fact, Franklin County saw one of the largest increases in the state thanks to a boom in Pasco. The county was up 37% thanks to the city’s nearly $200 million increase.
Not only did Pasco see a huge benefit from construction projects, it also boasted the biggest retail sales increase in the Tri-Cities, according to data from the Washington Department of Revenue.
Franklin County’s increase was the largest percentage increase in the state aside from Skamania and Pend Orielle counties, which each have populations of less than 15,000.
The city of Pasco’s increase was 44% year over year, jumping from $425 million in taxable sales in the first quarter of 2021 to $610 million.
It was almost enough to match Kennewick’s $646 million.
Pasco growth
Two major factors came into play for Pasco to reach that number, and both suggest it could be sustainable over the next few years.
The first factor is a strong retail sales increase. While retail trade remained flat in Kennewick and Richland, Pasco saw an increase of about $25 million, or 10.2%. Retail trade includes automobile sales, furniture, electronics, clothing and other items.
Renee Sunde, president of the Washington Retail Association, said even with inflation, they’re still seeing customers spending money.
Sunde said the transition back to in-person shopping began last holiday season and has only continued through the year.
“About 70% of retail sales happen in brick and mortar stores,” she said. “It’s truly about hybrid (models). Even small businesses have learned what it looks like to kind of meet the consumer where they are.”
The second factor, and the largest area of increase, came from construction.
Pasco saw their taxable construction skyrocket from $50 million to $182 million thanks to progress on several high profile businesses expanding or moving into Pasco.
While many of those projects, such as Amazon’s massive new warehouses and the Reser’s Fine Foods expansion will wrap up late this year or early 2023, many new high profile projects are in the works and should help keep those construction dollars high.
The Port of Pasco’s 300-acre Reimann Industrial Center is in the early stages of development, with a new $500 million Darigold plant set to serve as its first major tenant.
Tarragon, a Seattle-based developer, hopes to begin construction on a warehouse park next to Amazon in spring. Once finished that warehouse park will rival Amazon’s footprint at more than two million square feet.
And across town the Broadmoor development will be seeing significant progress on a project that will bring more than 10,000 new rooftops to Pasco, as well as huge new retail opportunities.
Other areas with strong showings in Pasco came from the wholesale industry, which saw a $6.5 million increase, and restaurants and accommodations.
Accommodations, which is typically hotels and short-term rentals, nearly doubled from $2.4 million to $4.7 million in the first quarter year over year. Restaurants, food services and drinking places saw a $4.5 million increase, representing a 17% jump.
The increases Pasco saw in restaurants and accommodations are indicative of a larger pattern of consumers beginning to get out of the house, have some fun and travel again.
Kennewick and Richland
Those were the strongest points of growth in Kennewick and Richland. Kennewick saw a 29% increase, and Richland 26%.
Where Pasco saw a major win in retail trade, Kennewick and Richland managed to remain even with respective totals of $372 million and $192 million.
In construction, Richland saw an $11 million increase and Kennewick $1.3 million. In the wholesale sector, Richland saw an increase of about $4.5 million and Kennewick managed a $9.5 million increase.
All those increases mean that local governments are also getting a larger slice of the pie. In 2021, nearly $130 million from sales taxes came back to budgets in Benton and Franklin counties.
Back to school, holiday shopping
Sund said that back to school and then holiday shopping are going to be big predictors of how sustainable these increases are.
Mark Johnson, head of government affairs for the retail association, said there has been pent up demand for travel and entertainment, and that in turn has also boosted retail sales for items such as clothing, cosmetics and travel needs. At some point, that post-pandemic restriction demand could slow down.
Johnson said that for back to school shopping, parents are expected to spend the same amount of money as last year, but they’re going to try to make their dollars go further.
He said retailers can expect shoppers to be focusing more on great deals than name brands.
“The shoppers have shifted. They’re looking for sales now, bargains,” he said. “I think families are being forced to look very carefully at their household budgets and they’re spending very intentionally and wisely.”
Each of the Tri-Cities can expect to see significant retail and construction growth in the near future.
Some areas to watch include: Vista Field and the Southridge area in Kennewick, Badger Mountain South in Richland, and the Broadmoor development in Pasco.
All are expected to bring in thousands of new homes and apartments, as well as strong retail development.
