Increases in Rural Income May Not Help Smalltown Retailers

Higher incomes and increased consumer spending will not necessarily help small rural communities hang onto their retail stores. Analyzing data from 10 counties in southwest Minnesota, we traced how changes in local income affected retail sales between 1979 and 1986. Increases in income generally led to increased total spending in the larger towns of the area but lower total spending in its smaller towns. Reason? With improved income, consumers seem to be more attracted to the greater selection of goods in the larger towns.