Monday Report
Monday Report - City Retail Sales Rankings July 30th, 2007

Monday Report Survey Comments

Economic Notes:

This Weeks Leads



Gross Taxable Retail Sales - April 2007

  • The "Top Ten" represent 45% of the Statewide market.
  • The "Top Twenty-Five" represent 2/3rds of all retail sales.
  • The "Top 20%" gainers include:
    1. Lehi +63.8%%
    2. Draper +31.2% (IKEA opened May 23rd!!)
    3. Midvale +29.6%
    4. South Jordan +26.4
    5. Vernal +17.6%
  • The "Bottom 10%" include:
    1. Taylorsville - 1.2%
    2. West Jordan -0.7%

April 07 Retail Sales - Top 25 Cities (Large Monthly Filers Only)

Rank CityApril 2007 (000) % Change 07/06Mkt Share April 07 (% of State Total)
1Salt Lake City$378,285+10.0% 11.3%
2West Valley$149,580+16.7% 4.5%
3Orem $146,724+11.0 %4.4%
4Sandy $145,618+3. 9%4.3%
5St George$134,472+3.0% 4.0%
6Murray $132,952+9.0%4.0%
7South Salt Lake$120,662+8.9% 3.6%
8Layton $96,920+11.9%2.9%
9Ogden $96,572+11.9%2.9%
10West Jordan$94,049-0.7% 2.8%
11Provo $90,705+14.8 %2.7%
12Logan $51,828+6.4 %1.5%
13Riverdale$50,757 +3.6%1.5%
14Draper $49,218+31. 2%1.5%
15American Fork$49,034+10.9% 1.5%
16Midvale $44,125+ 29.6%1.3%
17Vernal $42,550+17. 6%1.3%
18South Jordan$39,913+24.4% 1.2%
19Cedar City$39,495+6.6% 1.2%
20Lindon $35,597+14.3 %1.1%
21Taylorsville$35,30 6 -1.2%1.1%
22Lehi $33,319+63.8 %1.0%
23Bountiful$29,927 +6 .5%0.9%
24Tooele $27,823+8.2%0.8%
25Cottonwood Heights$27,817+4.4% 0.8%

The "Top 5" Major Sectors represent 50% of the market.
  • The "Top 5" gainers include:
    1. Construction +67.4%
    2. Public Admin +28.6%
    3. Manufacturing +26.6%
    4. Fin, Ins, & Real Estate +24.7%
    5. Retail - Misc. +22.9%
  • Categories with declining sales were led by:
    1. Electric & Gas -19.9%
    2. Occasional Sales -4.4%
    3. Apparel & Acc -3.3%
    4. Transportation -1.5%
    5. Food Stores -1.4%

Source: Utah State Tax Commission, June 2007

Is Your Workforce Strange Enough to Guarantee Competitive Advantage?

What characterizes successful companies these days?

"A strikingly different, obsessively focused" workforce, one that -- compared to competitors' workforces -- is "downright strange."

To get the best results, companies have to build a workforce "that is extraordinary in a way that customers care about."

Performance Drivers: What Must Customers Notice About Us So That We Win?

  • Performance Drivers are what cause your Organizational Outcomes to move; they specify what customers need to notice and think about your organization in order to make them choose you over your competition. You should literally build your organization around measuring and gaming your Performance Drivers, which results in a strange workforce. Developing, measuring, and enacting your Performance Drivers will not be easy (fortunately!), but it will give you incredible insight into what your organization is creating and not creating in order to differentiate you, attract customers, and win. It will bring discipline to the words and ideas that are your strategy, and you will be able to track and manage the extent to which your strategy is being enacted. You know you want this; the only question is how hard are you willing to work to get it?

    Games People Play

  • As the Dean of a business school, you decide that the best reflection of winning is BusinessWeek's rankings. These are prominent reputation scores created by a third party that directly pits business schools against each other every two years. Essentially all MBA applicants know about the BusinessWeek rankings, and the smartest MBA applicants with highest motivation try to go to the best- ranked schools. If you attract really smart, motivated people to your school and simply don't mess them up too bad, there is a very good chance they will go out and succeed in their careers. And then guess where they will want to hire their future MBAs? In fact, loyalty aside, most successful companies want to recruit MBA students from schools with the best public reputations. And who can command the highest salaries and the best jobs from these great companies? You've got it: MBAs graduating from the top-ranked programs. These virtuous cycles are why you picked BusinessWeek's rankings as your primary Organizational Outcome.
  • Do you want to know what your Performance Drivers are? Then you need to call BusinessWeek. Because once you selected these particular rankings as the evidence that will let you know that you are winning, the only way to learn your Performance Drivers is to figure out how BusinesWeek creates the rankings. So you call up BusinessWeek and learn the formula. Forty-five percent of the ranking is based on what your MBAs say about your school after they have been in the program a year. Forty-five percent of the ranking is based on what the companies that hire your MBA students say about your school. That leaves 10% -- what is that extra 10%? That's just a little remainder, hardly worth thinking about too much, but that is your school's "Intellectual Capital." But Intellectual Capital sounds sort of important for a university, right? How is that measured? There is a list of 18 business publications that are considered important by BusinessWeek, and each time one of your faculty members publishes a paper in one of those, your school gets a point.
  • So now that you know the determinants of winning, how do you want to go about gaming these Performance Drivers? One thing is sure: You have little need to worry about the intellectual contribution of your professors. Even though intellectual contribution and academic publishing is the coin of the academic market, and it's what most of your workforce currently is chasing, it just doesn't move the needle. If you are going to try to tweak performance through intellectual contribution, you should steer faculty toward those 18 journals.
  • To really affect your Organizational Outcome, you need to make students and recruiters really happy with your school. The question is what you are willing and able to do to satisfy these customers that other business schools are not? For student satisfaction, you might achieve good scores through compelling teaching, but all your competitors are doing this too. Could you differentiate by building a strange workforce that truly pushes the MBA teaching envelope? Hire professors who skip the research since it's not important to winning anyway, and instead use their time networking with industry leaders who they can bring into the classroom? Maybe you could hire professors who really show students the love by inviting them over to their houses for picnics and volleyball, or meeting them out at the bars. This workforce might just be strange enough that other schools wouldn't imitate it and MBA students would view it as remarkable, giving you the highest marks on the BusinessWeek survey.
  • What about the recruiter evaluations of your MBA program? How can you drive those numbers? You could produce well-trained grads who have the basics down cold and are confident but not pushy. Sounds just like what the competition is trying to do -- good luck displacing schools ranked better than you with six times your endowment. What could you do that would be strangely and noticeably valuable? What if you got your faculty members to wine and dine company recruiters when they come in for interviewing? On one hand, it's blatant gaming because you're just creating interpersonal goodwill so that recruiters rate your school higher when they get surveyed by BusinessWeek. On the other hand, professors might just learn what recruiters are looking for in MBA students that they aren't currently getting and then build this into their classes. For example, recruiters want more statistics and analytic ability from MBAs, and professors could add cases with datasets and make students run regressions and interpret output. Professors could make the cases and the classes compelling to MBAs by saying, "This is what Goldman Sachs told me they are looking for in job applicants." This could differentiate your school, and it would game your two most important metrics simultaneously. Sure, lots of professors wouldn't like the idea of using their personal time wining and dining recruiters; they might say that's not why they got a Ph.D. But what if you located and hired a strange breed of professor who liked hobnobbing with recruiters and building what they learned from recruiters into their classes?
  • In developing this example, I'm not actually suggesting that BusinessWeek rankings provide a valid reflection of business school success. For example, what would happen if BusinessWeek suddenly increased the weight on intellectual contribution for ranking schools? What if BusinessWeek loses relevance in ten years because the world really thinks universities should be judged by their intellectual contribution? Then your school could be in trouble because you built a strange schmoozing-type organization that was not equipped to contribute in intellectual ways. Listen, choosing a strategy is risky (it better be!), and my point here is not to suggest good versus bad strategies.
  • My point here is that if you want to know what your organization's Performance Drivers are, you need to first identity Organizational Outcome metrics that provide a valid reflection of what you think your organization exists to create. Then, literally find a way to make these metrics move in a way that your competitors are not willing or able to pursue. That's why we started with making sure your Organizational Outcomes were strategic and reflected what winning truly means to you. Once you choose Organizational Outcomes and begin to take them seriously, they will affect everything you do as an organization. They will affect what seems reasonable and what seems valuable. In the MBA school example, if you as Dean had chosen a slightly different metric -- say the U.S. News and World Report's rankings -- you would be placing your emphasis on MBA admissions because entering-class GMAT scores drive this metric, but student and recruiter opinions are not included in these rankings. Organizational Outcomes help expose and pinpoint your Performance Drivers. By building an organization around gaming and measuring your Performance Drivers, you can build a strange, noticeable organization.
  • So here is what you need to do to figure out your own organization's Performance Drivers:
    • Hold your Organizational Outcomes meeting, described in the last chapter. You and your top leadership team distill your strategy into three to four antagonistic metrics that let you know that you are winning in the way you want to win. Remember, each of your Organizational Outcomes must be a metric -- actual numbers that you collect and store in a spreadsheet.
    • Soon after your Organizational Outcomes event, hold another meeting with the same group. This second meeting, or series of meetings, is going to be at least as long as the first one, probably much longer. The timing of this second meeting is important but difficult. You want to meet as soon as possible after the first one so that people still remember the Organizational Outcomes conversations and there is some momentum left. On the other hand, the second meeting can't be so soon that people are burnt out and frustrated and feel the need to "get back to their real work." They need to believe that this is their real work. These discussions and decisions will determine whether or not your organization wins over the next three years and whether it is still alive in ten.
      • For each of the Organizational Outcomes that you have developed, build consensus about three sets of questions:
      • What produces this Organizational Outcome number? Literally, what makes it go up or down?
      • What are the two most important things our customers have to believe about us relative to our competition in order to affect this Organizational Outcome? How do we measure our progress toward creating these beliefs in our customers' heads?
      • How can we influence this Organizational Outcome in a way that is valuable, rare, and hard to imitate? What are we willing and able to do that the competition is not in order to drive this Organization Outcome?
    • Let's dig deeper into these questions so that you know what you are looking for when you meet again as a leadership team.

Continued Next Week


  • City Retail Sales Rankings
  • Is Your Workforce Strange Enough
  • Monday Report Survey Comments
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research

  • Monday Report Survey Comments
  • Thanks to all of you who participated.

    #9 What can we do to improve the Monday Report to make it more useful to you?

    • Tidy it up. Make it printable. The tax data (scorecard) is excellent. Featured articles are too long. Thanks for sending it each week.
    • nothing that I can think of right off
    • Resume city rankings on retail sales.
    • just keep it going
    • Change the layout to make it easier to read.
    • I'm interested in reading more about retail. Our Mayor and Council focus on retail/sales tax. We have a strong industrial/job base but could always use more. I'd like to see what individual cities in Utah are doing to attract business. Are they keeping current city profiles, what does their website look life for business, things like that.
    • I appreciate being able to scan one source for information on the Utah economy as well as trends in business or business management. You provide a good service.
    • Not much, I really enjoy it.
    • Add more Utah economic data
    • It is already very useful to me.
    • Perhaps have a summary index with links to articles to make it easier to scan for relevant information.

    What would you like to see in future Monday Reports?

    • Demographic info. is great and very useful. Retail and business trends, notice of upcoming issues relating to doing business in Utah.
    • more housing information more general information (what cities are doing what studies....what are the big events that everyone is talking about and get some general details for each)
    • The scorecard information on sales, growth, demographics, etc. is very interesting and useful.
    • continued current local trends
    • Continued benefits from great information collection. I enjoy and use your data frequently.
    • More of the same great information
    • Completed deals
    • Utah economy and demographic info...
    • As much local or regional news about the local consumers and real estate market as possible. economic information about what is happening. Information about cities and counties in the state, IE demographics, building, happenings, comparison summaries, etc.
    • The great information you include each issue.
    • Reporting on the nonprofit sector.
    • Great work. Thanks for providing this service.

  • Economic Notes:
    • Global Business Confidence
    • Global business sentiment edged up across the globe last week, although it remains within a narrow range that has prevailed since mid-April. Weighing on sentiment are lackluster sales, but businesses are feeling better about the outlook. Financial services firms and South American businesses are the most upbeat, while construction and real estate firms and European businesses are the most nervous. Business confidence is consistent with an economy that is expanding at the low end of its potential, and there is no indication in the survey results that the stronger global growth experienced in the second quarter of 2007 will accelerate further during this quarter.
    • Investor Optimism
    • Investor optimism edged slightly lower in July. The UBS Index of Investor Optimism slipped two points to 87. Despite this month's modest decline, investor optimism remains within the range that has prevailed since the beginning of this year. Weakening housing markets and rising energy costs took a bite out of investor confidence in July. The key supports are tight labor markets and rising equity prices.
    • US home resales lowest in nearly 5 years
    • Sales by Americans of their homes declined to the lowest level in nearly five years last month amid fresh signs of a two-speed economy as household activity moderated and business expansion picked up. The National Association of Realtors said sales of existing homes dropped for the fourth straight month in a row with a slide of 3.8 per cent as purchases fell fastest in former bubble markets in the west and south of the country.
    • MBA Mortgage Applications Survey
    • Mortgage demand decreased 3.6% in the week ending July 20. Purchase applications decreased 5.0% and refinance applications decreased 1.4%. The fact that the index is down this week and down from one month ago is clearly a negative signal, particularly in the current climate where increases in applications do not necessarily translate into sales, but declines surely indicate less activity.
    • Existing Home Sales
    • The housing market remains mired in weakness, with June's existing home sales numbers coming in even worse than expected. Sales declined 3.8% from May to 5.75 million annualized units. The inventory-to- sales ratio remains high at 8.8 months. The one bright spot is an uptick in the median existing price, although this may result from a shift in the mix of homes being sold. There is little good news for financial markets with this report.
    • New Home Sales (C25)
    • The new home sales data further confirm that the housing market is stuck in a downturn. June sales of new homes declined to 834,000 annualized units, 6.6% below May, a larger than expected decline. Moreover, May data were revised downward. Months of supply moved up to 7.8, while the median sales price is down by 2% from one year ago.
    • Apartment Vacancy Spiking
    • The nation's multifamily vacancy rate shot up in the second quarter to an estimated 5.1%, 110 basis points higher than a year ago, according to preliminary survey results published this month by Torto Wheaton Research. The Boston-based research subsidiary of CB Richard Ellis will revise its conclusions with further data in August, but a researcher says vacancies are clearly climbing quicker than expected in many cities.
    • Chain Store Sales
    • Chain store sales fell 0.2% in the week ending July 21, ending a string of three consecutive small gains. Year-over-year growth dipped to 3.0% as sales rose modestly in the comparable week last year.
    • Durable Goods (Advance)
    • New orders for manufactured durable goods rose a less than expected 1.4% in June following an upwardly revised 2.3% decline in May (previously - 2.4%). Shipments fell 1.1% in June, more than reversing the 0.6% increase seen in the prior month. Durable goods inventories were up 0.2% in June.
    • Oil and Gas Inventories
    • Crude oil inventories fell by 1.1 million barrels for the week ending July 20, according to the Energy Information Administration, in line with expectations. Gasoline inventories increased by 0.8 million barrels, slightly above expectations. Refinery activity improved for a fifth consecutive week, increasing 0.7 percentage points to 91.7%. Distillate supplies rose more than expected. This report will have little impact on oil prices.
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas increased by 71 billion cubic feet during the week ending July 20. Underground natural gas inventories currently stand 16.1% above the five-year average. This report is likely to have a slightly bearish effect on natural gas prices.
    • Jobless Claims
    • U.S. initial jobless claims fell slightly, dropping 2,000 to 301,000. Given the recent volatility in the data due to auto-related shutdowns, this was not wholly unanticipated.

  • This Weeks Leads
    • Dippin' Dots
    • Dippin' Dots Franchising, Inc. trades as Dippin' Dots at 300 locations nationwide.
    • The ice cream shops occupy spaces of 100 sq.ft. to 1,500 sq.ft. in freestanding locations, malls, lifestyle, outlet, specialty, strip and tourist centers.
    • Plans call for 90 openings nationwide during the coming 18 months.
    • Preferred cotenants include Abercrombie & Fitch, Gap, Limited, Limited Too and Old Navy.
    • For more information, contact
      • Jamie Ehling,
      • Dippin Dots Franchising, Inc.,
      • 1640 McCracken Boulevard, Suite 100,
      • Paducah, KY 42001;
      • Web site: www.dippindots.com.
    • The Vitamin Shop
    • The Vitamin Shop, a 291-unit chain, operates locations nationwide.
    • The stores, offering vitamins, minerals and supplements, occupy spaces of 3,000 sq.ft. to 4,000 sq.ft. in freestanding locations, endcaps and pad sites.
    • Plans call for 50 openings nationwide during the coming 18 months, with representation by Bialow Real Estate.
    • For details, contact
      • Corey Bialow,
      • c/o Bialow Real Estate,
      • 60 Wells Avenue,
      • Newtown, MA 02459;
      • Web site: www.bialow.com
    • Slim and Tone
    • Slim and Tone, a 150-unit chain, operates locations nationwide in 31 states.
    • The fitness centers occupy spaces of 1,500 sq.ft. to 2,000 sq.ft. in specialty and strip centers.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • Typical leases run five years with a five-year option.
    • A vanilla shell and specific improvements are required.
    • Preferred cotenants include grocery anchors.
    • Competition is cited as Curves.
    • Preferred demographics include a population of 40,000 within five miles earning $60,000 as the average household income.
    • The chain targets women between 25 and 64 years of age.
    • The company is franchising.
    • For details, contact
      • Mark Camara, c/o Ape Realty, Inc.,
      • 4491 West Whitewater Avenue,
      • Weston, FL 33332;
      • Web site: www.slimandtone.com
    • James Avery Craftsman
    • James Avery Craftsman, Inc. trades as James Avery Craftsman.
    • The 44-unit chain operates locations throughout CO, GA, LA, OK and TX.
    • The jewelry shops occupy spaces of 2,600 sq.ft. in malls, lifestyle and strip centers.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months.
    • Typical leases run 10 years.
    • A vanilla shell is required.
    • Preferred cotenants include Ann Taylor, Chico's, Jos. A. Bank, Neiman Marcus, Nordstrom and Talbots.
    • Preferred demographics include a population of 300,000 within 20 miles earning $70,000 as the average household income.
    • Competition is cited as David Yurman and Tiffany's.
    • For details, contact
      • Tim Ashmore,
      • James Avery Craftsman, Inc.,
      • PO Box 291367,
      • Kerrville, TX 78029;
      • Web site: www.jamesavery.com

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