Retail sales in Texas, RGV trend upward
McALLEN — Following a national trend, retail sales in McAllen and across the state increased in August, a positive sign considering retails sales are typically a volatile measurement of the economy.
But the Rio Grande Valley economy is different, as cities such as McAllen and Mercedes rely heavily on retail revenue.
“When you talk about the border, it’s influenced by the national level, but also a good portion of the border economy depends on cross-border shoppers,” said Jesus Canas with the Federal Reserve Bank of Dallas, which has studied the Texas retail trends. “People from Mexico, in the RGV’s case, like Monterrey, and cities across the Rio Grande, spending their money in McAllen.”
The Dallas Fed said retails sales accelerated significantly in Texas from July to August, which also followed a national trend.
McAllen officials have pointed to the $50 million La Plaza Mall expansion as a key factor in the city’s retail sales revenue increasing after two years of negative numbers. However, while retail sales numbers have increased over the last year, they still haven’t recovered from levels of years past. Violence in Tamaulipas has kept many shoppers who once spent their money here at home.
But manufacturing has expanded along the border, Canas said, both in United States and Mexican border cities.
“Maquiladora activity in Reynosa is also growing at a good pace,” Canas said. “That’s reflected in higher employment levels and higher wages for those Reynosa shoppers who are spending some of that money in McAllen.”
Across the nation, shoppers are spending more freely in an economy that has recently grown at the fastest pace in nearly four years. Unemployment is near an 18-year low. Average hourly wages rose 2.7 percent in July from a year earlier.
“There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment, perhaps the strongest I’ve seen in my career,” Target CEO Brian Cornell told investors. Target saw sales at established stores post the strongest growth in 13 years. Customer numbers in stores and online had their best showing since at least 2008.
Walmart similarly posted the largest increase for same-store sales in more than a decade. Best Buy had its biggest second-quarter same-store sales boost in 15 years. These three retailers, along with Home Depot, Lowe’s, Kohl’s and others raised their outlooks.
The Associated Press contributed to this report.