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December 30, 2003

Purdue institute releases reports on Indiana retail business

WEST LAFAYETTE, Ind. – The state of Indiana ranks No. 3 nationally in best states for e-commerce. That's the most surprising finding in the Purdue University Retail Institute's three reports on the 2003 state of retailing in Indiana.

The reports, released today, cover the general state of Indiana's retailing, shopping center retailing and e-retailing.

Richard Feinberg, a professor in the consumer sciences and retailing department in Purdue's School of Consumer and Family Sciences, said the reports respond to questions addressed to his department about retailing in the state. Graduate student Adam Hagen contributed research to the reports.

"We get 10s of questions about issues of retailing in the state from both the media and the general public, and no one has the data to answer the questions," said Feinberg.

"Retailing is a big, but ignored arena of commerce in the state. It employs a lot of people and is responsible for a lot of tax revenue," he said. Feinberg describes retailing as "the unrecognized giant of the state's economy," where retailing is growing on all fronts, particularly the Internet.

Feinberg reports that Hoosiers like using the Internet for shopping, with 69 percent of Indiana households making regular online purchases. The Progressive Policy Institute ranks Indiana No. 3 nationally in the list of best states for e-commerce in 2002. Indiana manufacturers are also heavy e-commerce participants, with 89 percent of companies online, fourth in the nation.

Feinberg describes Indiana as "an attractive hub for e-retailing because its central location makes it advantageous for distribution. While e-retailers can have offices anywhere in the world, ultimately, they still have to deliver products to customers."

The report on the 2003 state of retailing in Indiana includes figures on sales, taxes and employment. All three of the reports include national figures to put Indiana retailing in context.

Following are some highlights from the reports.

Retail sales in Indiana in 2002 totaled $77.7 billion. In 2000, retail employment accounted for 18.7 percent of Indiana's non-agricultural employment and contributed $4.68 billion in sales tax revenues to the state. Annual wages in Indiana retailing, including food service and drinking establishments, in 2001 were $8.49 billion. (All annual numbers are the latest years for which information is available.)

Indiana, with 6.18 million residents and 2.3 million households is 26th nationally out of the 50 states and the District of Columbia in retail spending at $12,965 per resident in 2000.

The retailing report breaks down 2000 retail sales by groups, such as motor vehicle and parts dealers and general merchandise stores, No. 1 and No. 2 respectively, in total sales. It also details the nature and scope of buying power in metropolitan areas. Indianapolis tops that list with Gary and Fort Wayne coming in at No. 2 and No. 3, respectively.

There are also 2003 in-state and national rankings of metropolitan median household buying income, number of business establishments, households with buying income of more than $150,000, total retail sales, total households and population, and sales of food service and drinking establishments, food and beverage stores, building material and supply stores and other merchandise categories.

The report on shopping center, or mall, retailing in 2002 shows a total of 952 shopping centers in Indiana, a 5.8 percent increase from the 900 in 1998. Total shopping center leaseable space rose 5.8 percent from 1998 to 2002. Retail sales in shopping centers in 2002 were $28 billion, 51 percent of total state retail sales, and an increase of 19.7 percent over 1998. Malls account for 51 percent of Indiana retail shopping sales.

In an average month, 4.3 million – 94.4 percent – of adult (over 18-year-old) Hoosiers shop in shopping centers. Malls employ 253,700 people, about 9 percent of the state's non-agricultural employment. Shopping center sales account for 11.4 percent of total state tax dollars and 28.7 percent of sales tax dollars.

Because the states are prohibited by federal law from collecting sales tax on Internet sales, e-retailing costs the states money. Feinberg estimates Indiana lost $146 million in sales tax money to e-retailing. In 2001, California lost the most – $1.75 billion – in 2001 and Vermont the least – $21 million. Projected Indiana e-commerce sales in 2011 will result in a loss of $216 million, Feinberg said.

Writer: Mike Lillich, (765) 494-2077,

Source: Richard Feinberg, (765) 491-5583,

Purdue News Service: (765) 494-2096;

Note to Journalists: Reporters wishing access to the three reports on Indiana retailing in 2003 should contact Professor Richard Feinberg at (765) 491-5583,

Related web site:
PDF versions of 2003 retail reports

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