Monday Report - July 07 Retail Sales Rankings October 15th, 2007

Economic Notes:


This Weeks Leads:



Gross Taxable Retail Sales - July 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 +62.6%%
    2. Draper +44.9%
    3. Vernal +24.7
    4. South Jordan +19.6
    5. Price +16.4%
  • The "Bottom 10%" include:
    1. Woods Cross - 12.0%
    2. Lindon -2.5%
    3. Midvale -0.9%
  • The Biggest "Non- Surprise" is Lehi and Draper:
    1. UP +62.6% and 44.9% respectively!
    2. Cabella's and Ikea!
    3. Serving the North Utah County and Southern Salt Lake County Regional Area
    4. Success breeds success - watch for more announcements!

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

Rank CityJuly 2007 (000) % Change 07/06Mkt Share Jul 07 (% of State Total)
1Salt Lake City$411,027+11.3% 11.3%
3West Valley$155,093+0.6% 4.4%
4Orem $154,273+3.0%4.4%
5Murray $141,527+16.1%4.0%
6St George$131,180-0.7% 3.7%
7South Salt Lake$126,857+7.7% 3.6%
8West Jordan$99,824+2.2% 2.8%
9Ogden $98,237+0.5%2.8%
10Layton $97,2865.2%2.8%
11Provo $95,305+11.9%2.7%
12Draper $61,111+44.9% 1.7%
13Logan $56,867+4.7%1.6%
14American Fork$54,913+10.5% 1.6%
15Riverdale$54,506 +3.9%1.5%
16Midvale $47,532-0.9%1.4%
17Vernal $45,864+24.7%1.3%
18Cedar City$45,452+2.6% 1.3%
19South Jordan$45,450+19.6% 1.3%
20Taylorsville $39,775+12.0%1.1%
21Lindon $34,955-2.5%1.0%
22Lehi $34,079+62.6% 1.0%
23Bountiful$33,191 +10.6%0.9%
24Park City$30,133+6.6% 0.9%
25Cottonwood Heights$29,194+na% 0.8%
26Tooele $28,267+9.5%0.8%
27Springville $24,575+7.0%0.7%
28Centerville $23,891+8.2%0.7%
29Spanish Fork$22,195 +7.2%0.6%
30Price $21,927+16.4%0.6%

  • The "Top 5" Major Sectors represent 50% of the market.
  • The "Top 5" gainers include:
    1. Health Care +60.1%
    2. Private Motor Vehicle Sales +21.1%
    3. Ins., & RE +18.3%
    4. Construction +17.1%
    5. Hotel & Lodging +14.8%
  • Categories with declining sales were led by:
    1. Transportation -18.0%
    2. Agri, Forestry & Fishing -39.6%
    3. Occasional Sales -29.5%
    4. Fin.,

Source: Utah State Tax Commission, Oct 2007

Management Notes:

Building an effective change agent team

A carefully constructed change agent program is essential to any successful operational transformation.

Quick Take Notes:

  • Organizations seeking to transform their operations frequently overlook the importance of change agents. These handpicked leaders, spread across an organization, implement processes, train employees, and act as all-around role models within change programs.
  • A successful change agent team requires a clear definition of roles and reporting structures, a mix of skills and experience, and the ability to communicate with and inspire the support of line managers.

Full Article

  • When a company attempts a transformation focused on its operations, a sound plan and a robust execution strategy are not necessarily enough. Another important factor in the success of this type of initiative-involving everything from simplifying processes and improving the efficiency of equipment to modifying an entire supply chain-is the designation of specific employees as "change agents" who lead the organization through the journey.
  • Change agents are leaders who cut across the organization and its business units without regard to the traditional hierarchy. Often these men and women are freed from day-to-day tasks in order to focus solely on leading and driving change. Directly or indirectly, they implement new processes, train employees on new procedures, and act as role models to demonstrate new and better ways to work. For example, change agents might spend more than 50 percent of their time visiting areas undergoing change, auditing progress, or advising managers on how to improve performance.
  • Organizations that overlook the importance of an appropriate change agent program risk paying a high cost. Consider, for example, an Asian pulp and paper company that created a change agent team to drive its lean-operations program. The group reported directly to top management and was staffed with new hires. However, senior executives failed to recognize and combat the tenacity of the operating group's silo mentality and culture. Plant managers, who held the real organizational power, resisted what they saw as intrusion by a team of young outsiders, leaving management with no choice but to abandon the change program after several months. The change agents could not establish themselves as a credible force in an organization that valued experience and seniority over youth and innovation.
  • Our experience suggests that a carefully constructed change agent program is essential to any reorganization effort. Such a program requires three elements: a thoughtful design, the careful recruitment and development of personnel, and close integration between the change agent team and the organizational areas targeted for transformation.

    Designing the program

  • Two of the most important tasks when creating a change agent team are defining the roles of its members and establishing a reporting structure.
  • As in any organization, each individual on the change agent team has a specific role. For example, executers are responsible for implementing solutions, experts use their extensive knowledge to solve difficult problems, coaches train line employees in the new processes, custodians ensure that knowledge is shared across organizational units, and controllers track what's been done and what must still be accomplished. How much emphasis an organization places on each of these roles will depend on the nature of the change program and the existing culture of the organization; for instance, an organization with a weak culture of accountability will need more coaches and controllers in order to ensure consistency.
  • As for reporting structures, there are two possible models. One is to create a centralized change agent team that reports directly to the top team. The other, decentralized option is to keep change agents in their respective groups so that they report through a dotted line to a central change agent leader. In our experience each of these approaches has its advantages and drawbacks, and no one plan will work for everyone. A centralized change agent team encourages new ideas, the thorough development of new thinking, and a standard set of solutions across the organization. Alternatively, the decentralized model tends to foster greater skill building, the quicker dissemination of the program's values, and better customization of solutions for each site or group. Short-term priorities, the long-term rollout plan, and the culture of the existing organization are all factors that must be considered when determining which change agent structure will be most effective. For example, at the Asian pulp and paper company mentioned previously, where plant managers saw the centralized model as an outside intrusion into their operations, a decentralized plan might have been more effective.

    Recruiting and developing the best team

  • With a change agent organizational structure in place, the next step is to identify and recruit the best team possible. A crucial component is spelling out the benefits and opportunities members will receive as a result of moving outside their existing career paths.

    Identify credible candidates

  • A useful litmus test when considering possible change agents is to anticipate the reaction from other staff members when an appointment to the new position is announced. Selecting high-performing people who are already well respected within the company sends a clear signal that management takes the program seriously. Moreover, a credible set of team members will be better able to drive change and implement recommendations.
  • Change agents need more than raw analytical power to solve complex business problems; interpersonal skills are also critical if they are to lead others through change. Important traits for a potential change agent include empathy, strong communication skills, perseverance in the face of challenge or ambiguity, and an ability to deal with conflict constructively.
  • Change agent teams must also make a strong effort to hire people with an appropriate mix of skills. A balance should be struck between young "academic types" who have strong analytical capabilities and seasoned managers who have proven track records within the organization. Working together, these two types of employees complement each other, broadening the team's skill base and providing for the two-way transfer of knowledge and capabilities within the team.

    Develop a compelling case for team members

  • Potential change agents need to understand the explicit benefits and career opportunities that will be open to them as a result of joining the change effort. The best employees often hesitate to take an assignment that may last only 18 months-which is usually the minimum amount of time required for a transformation-fearing that it will damage their careers in the long run.
  • To counter these fears, high-performing organizations tend to develop a formal career plan for change agents. Some make participation a requirement for promotion to senior management; others build a career-development track within the program. Such mechanisms can prove to be highly effective recruiting tools, motivating potential candidates by offering short-term benefits-including opportunities to build new capabilities and exposure to new areas of knowledge-as well as the longer- term payoff of career advancement. Companies with traditionally weak human-resources processes may find it worthwhile to invest in a distinct HR system for change agents, including specific recruiting, development, and compensation schemes.

    Integrating with the front line

  • The third important requirement for a successful change agent program is active support from line management. Time and again, change leaders discover that an "80 percent right" solution embraced and implemented by line managers beats the "100 percent right" solution that fails to win their acceptance. This buy-in rate is a critical indicator of success for a change program. Change agents should typically spend more than half of their time working collaboratively on the "shop floor," maintaining open, two-way communication and keeping abreast of the latest developments on the front line.
  • Line managers need to be actively engaged from the beginning of the change process, and they should participate in problem-solving sessions with change agents, senior managers, and other employees. Such sessions encourage openness and the sharing of ideas, allow difficult issues to be raised early on in the change process, and build personal connections between line staff and change agents. At one oil and gas company, for example, the change agent team created a group of "sparring partners" staffed with midlevel production managers. The team jointly tested proposed ideas, won approval for standardization of tools and processes, and acted as a conduit to the rest of the organization. In such sessions, communication barriers are removed and collaborative teamwork becomes the norm.

    McKinsey & Company - http://www.mckinseyquarterly.com/article_abstract.asp x?ar=2049&l2=18&l3=27&srid=17


  • July '07 Retail Sales Rankings
  • Who's up?
    • Who's down?
    • Who's losing market share?
  • Management notes
  • Grants
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research

  • Economic Notes:
    • International Business Confidence
    • Global business confidence revived a bit in early October. All of the improvement occurred outside of the U.S., however, with Asian sentiment rebounding to its strongest level since April. U.S. business confidence remains consistent with an economy that is not growing. While responses to the survey's broader questions regarding present business conditions and the six-month outlook turned notably less negative last week. Responses to more specific questions regarding investment and payrolls have been and continue to be more positive.
    • International Trade (FT900)
    • The nominal U.S. trade deficit in goods and services narrowed by 2.4% in August. The U.S. trade deficit came in at $57.6 billion, $1.4 billion less than July's revised $59.0 billion, according to the Bureau of Economic Analysis. In August, exports increased and imports decreased. Crude oil prices increased in August, which in turn increased the nation's total import bill for energy-related petroleum products to $29.0 billion.
    • Treasury Budget
    • The unified monthly surplus for September was $112 billion, slightly below the CBO's preliminary estimate of a $113 billion surplus. In fiscal year 2007, which ended on September 30, the federal government ran a deficit of $163 billion. This is 34% smaller than the $248 billion deficit recorded in FY2006, and is the smallest federal deficit since FY2002. Revenue gains and spending restraint led to the smaller deficit in FY2007.
    • ABC News/Washington Post Consumer Comfort Index
    • Chain store sales were essentially unchanged again in the week ending October 6 according to the ICSC. Year-over-year growth fell to 2.1%, the slowest in 15 weeks as sales rose in the comparable week last year. Warm weather was blamed for the weak performance.
    • Wholesale Trade (MWTR)
    • Wholesale inventories rose 0.1% in August, below expectations. July inventories were not revised from the initial estimate of 0.2%. Sales rose in August, increasing by 0.4% over the prior month as compared to July's 0.2% uptick. The inventory-to-sales ratio was unchanged at 1.11 in August.
    • Import Prices
    • The U.S. Import Price Index increased 1.0% in September. The increase followed a 0.3% drop in August and was led by a 5.4% increase in petroleum prices. Export prices rose 0.3% in September, after rising by 0.2% in the previous month.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 2.4% in the week ending October 5. Purchase applications increased 2.1% and refinance applications increased 2.7%. Application activity is relatively quiet and stable, so that the increase in the spread of fixed and adjustable mortgage rates signals expectations of another Fed rate cut.
    • Chain Store Sales
    • Chain store sales rose 1.7% in September, the weakest result in over three years after adjusting for Easter distortions. Some of the weakness was due to warmer than normal temperatures in much of the country. Nonetheless, the vast majority of retailers were disappointed and earnings warnings were numerous.
    • Manufacturers Index
    • The Manufacturers Alliance/MAPI composite index clocked in at 65 for September, unchanged from June. The composite index shows a strong expectation for an increase in manufacturing activity over the next three to six months, and is the first quarter of 2007 to record a higher value than one year ago.
    • Jobless Claims
    • Initial jobless claims decreased by 12,000 to 308,000. This is a move away from expectations, but still generally in line with ongoing trends in the labor market and shows that layoffs are not intensifying.
    • Job Openings and Turnover
    • In August, the job openings rate remained at 2.9%-unchanged for most of the past six months. The hire rate fell slightly-to 3.4% from 3.5%. However, the separations rate also fell-to 3.2%. Therefore, on net the labor market remains fairly healthy.
    • Oil and Gas Inventories
    • Crude oil inventories unexpectedly fell by 1.7 million barrels for the week ending October 5, according to the Energy Information Administration, below expectations of a 1 million barrel build. Distillate supplies declined by 0.6 million barrels, in line with expectations. Gasoline inventories rose strongly by 1.7 million barrels, above expectations. Refinery activity improved for the second consecutive week, increasing to 87.8% from 87.5%, above expectations. Today's report will exert modest upward pressure on oil prices.

    Source: Economy.com, Financial Times 2007

  • Grants
  • The Health Resources and Services Administration (HRSA) recently issued the 2007 New Access Points (NAP) RFP.

    • There is $138,000,000 available over three years (grants to $650,000/year) to support operations at new primary health care delivery sites.

  • This Weeks Leads:
    • Wendy's
    • Wendy's International trades as Wendy's at 6,600 locations nationwide and internationally.
    • The fast- food restaurants occupy spaces of 3,300 sq.ft. in freestanding locations, malls and inline and travel centers, in addition to colleges and universities.
    • Growth opportunities are sought nationwide during the coming 18 months. Typical leases run 20 years.
    • Preferred demographics include a population of 30,000 within three miles.
    • A land area of one acre is required.
    • Send site submittals to:
      • Robin Zelinski,
      • Wendy's International,
      • One Dave Thomas Boulevard,
      • Dublin, OH 43017;
      • Web site: www.wendys.com.
    • Cost Plus World Market
    • Cost Plus World Market operates 282 locations nationwide. The home furnishings stores occupy spaces of 18,300 sq.ft. in power centers.
    • Growth opportunities are sought throughout AZ, southern CA and Las Vegas, NV during the coming 18 months, with representation by Katz & Associates.
    • Typical leases run 10 years.
    • Preferred cotenants include Linens 'N Things, Target and book stores.
    • Preferred demographics include a trade-area population earning a median household income of $75,000.
    • For more information, contact
      • Mike Zoob, Katz & Associates,
      • 21791 Lake Forest Drive, Suite 202,
      • Lake Forest, CA 92630;
      • 949-597-3535,
      • Fax 949-597-3537;
      • Email: mikezoob@dkatz.com;
      • Web site: www.katzassociates.com.
    • Frank & Stein Dogs & Drafts, US Bistro and Baja Bistro Fresh Mex Grill
    • Caldwell Enterprises, Inc. trades as Frank & Stein Dogs & Drafts, US Bistro and Baja Bistro Fresh Mex Grill at 27 locations nationwide.
    • The restaurants occupy spaces of 600 sq.ft. to 2,400 sq.ft.in freestanding locations, airports and lifestyle, power and strip centers, in addition to mall locations.
    • Expansion during the coming 18 months will focus on the Baja Bistro Fresh Mex Grill concept with 20 to 40 openings planned nationwide.
    • For more information, contact
      • Greg Caldwell,
      • Caldwell Enterprises, Inc.,
      • PO Box 20608,
      • Roanoke, VA 24018;
      • 540-774-0300,
      • Fax 540-774-1066.

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