Minnesota’s Changing Consumer Economy

Abstract

Minnesota’s economy recovered well from the Great Recession of 2007–2009. Based on an analysis of 2015 Minnesota Department of Revenue (MDOR) sales tax receipts from retail and consumer service businesses, the Twin Cities and Greater Minnesota show consumer spending at prerecession levels. Or nearly so. Today, retail sales are shifting from Main Street to Internet, catalog, and phone sales. For every $10 of taxable sales, at least $1 goes to retailers based outside Minnesota. In 2015, those external sales reached $3 billion, more than any Minnesota county, save Hennepin. During that period, Minnesota lost more than 5,000 retail businesses. Fortunately, surviving businesses are healthier than ever. Sales recovery has been particularly strong in sectors selling upscale, discretionary goods. Individual trade centers across the state show similar patterns. This study is based on current data from 47 cities in greater Minnesota, the same cities included in a 2011 Reporter article. In most of these cities, retail and consumer sales increased. Despite losing retailers they show growth in total retail sales. Notable exceptions exist as cities compete for consumers and some cities actually lose sales.