From Sit Down to Take-out: Food Services and Drinking Places 2017 Sales

by Dallas Fridley

June 16, 2020

Oregon’s food services and drinking places (FSDP), as report by the 2017 Economic Census, produced nearly $9 billion in sales. On a per capita basis, Oregon’s sales reached $2,170 in 2017 – providing a benchmark of sorts to consider potential sales, retained sales, and trade area captured at the county level. Not every county in Oregon had a booming tourism draw to lift 2017 sales. Differences in the mix of industries, from agriculture to government, limit the usefulness of comparing food and beverage across Oregon counties solely on the basis of jobs.

The Economic Census identified 10,360 business establishments or units in FSDP (NAICS 722), a ratio of 2.5 establishments per 1,000 population. Oregon’s 2017 FSDP sales totaled $9 billion or nearly $0.9 million per unit on average.

Captured Sales – Oregon’s Leading Counties

Clatsop County’s per capita sales eclipsed its closest rival, Multnomah, by a wide margin. Clatsop County’s $174.7 million in 2017 FSDP sales worked out to $4,500 per capita or a gap of $2,330 per head when compared with Oregon. Multnomah County’s food and beverage sales ranked second, at $3,458 per capita, followed by Lincoln ($3,139), Sherman ($2,683), Deschutes ($2,660), and Hood River ($2,553). All remaining Oregon counties produced per capita sales below Oregon’s $2,170.

At the other end of the spectrum, nine Oregon counties trailed Oregon’s per capita sales by more than $1,000. Morrow County averaged 1.3 food beverage and beverage establishments for every 1,000 residents (15 units total), with sales per unit averaging under $0.3 million. Morrow County’s sales per capita ranked last in Oregon at just $375 annually; Wheeler County’s sales were not disclosed, as were food and beverage sales in Malheur, Marion, and Polk. Other counties trailing Oregon’s per capita food and beverage sales by more than $1,000 included: Lake ($671), Gilliam ($690), Grant ($783), Crook ($1,058), Harney ($1,082), Columbia ($1,129), and Wallowa ($1,161).

Potential Sales

A potential sales analysis for Oregon counties should also include an adjustment for local incomes, with per capita income chosen here. Potential sales reveal the expected sales for FSDP given a county’s population and per capita income or purchasing power. FSDP sales are indexed to the state’s 2017 average of $2,170 per capita. Retained sales are found by comparing actual sales to potential sales, with a score of 100 percent indicating a county is serving its local need or demand. Leakage is indicated when the share falls below 100 percent, while a score above 100 shows that FSDP sales draw customers from outside the county. Excess sales or leakage may also be expressed as the trade area captured in persons. Similarly, a pull factor greater than 1.0 reveals surplus sales and a score under 1.0 indicating lost sales or leakage.
Morrow County’s FSDP sales totaled about $4.5 million in 2017. Using Oregon’s per capita sales as our benchmark, Morrow County left itself about $14 million shy, retaining just a fraction of its $18.4 million in potential sales, with a pull factor of 0.2. Morrow County’s 2017 per capita income was 71 percent of Oregon’s $30,410, trailing the state by almost $8,700. Morrow County captured a trade area equivalent to 2,871 persons, retaining just 24 percent of its potential sales.

Clatsop County’s 2017 FSDP revenue exceeded the $77.9 million in potential sales that its population and local incomes would support with an additional $96.8 million. In other words, the county retained 224 percent of its potential food and beverage sales. Its trade area captured (in persons) reached 87,066, producing a pull factor of 2.2.

Lincoln County produced $150.6 million in 2017 FSDP sales and its per capita income, at $25,782, trailed Oregon’s by about $4,600. Lincoln County retained 171 percent of its potential sales, producing a surplus of $62.3 million. Its trade area captured 81,840 persons with a pull factor of 1.7.

Multnomah County’s per capita income exceeded Oregon’s by about 15 percent in 2017, at $34,266. Multnomah County’s higher per capita income raised its potential FSDP sales to nearly $2.0 billion – revealing a surplus of $780 million, with a pull factor of 1.4.

Sherman County had only four establishments in FSDP to serve its 1,800 residents. Despite having 2.2 establishment per 1,000 residents, each establishment averaged over $1.2 million in sales. Sherman County, and in particular Biggs Junction, is located at the crossroads of I-84 and Highway 97 with a steady flow of traffic and commercial vehicles frequenting its truck stops and dinners. Sherman County exceeded its potential sales of $4.4 million, capturing an additional $0.4 million to produce a pull factor of 1.1.

Deschutes County and Hood River County share some similarities as outdoor recreation and tourism attractions. And note that sales reported for food services and drinking places (NAICS 722) will miss breweries (NAICS 312) that operate under manufacturing but maintain taproom and dining services. Deschutes County had higher per capita FSDP sales than Hood River, at $2,660, while its per capita income of $31,757 exceeded Oregon’s by about 4 percent. Hood River County’s FSDP sales reached $2,553 per capita while its income fell about 3 percent shy of Oregon’s, at $29,595.

Food services and drinking places in Deschutes County produced sales of about $487 million in 2017. The average food and beverage establishment in Deschutes County exceeded $0.9 million in sales, with 2.9 establishments for every 1,000 residents or 525 units. In Hood River County, the industry’s 2017 sales averaged $0.7 million to total $64.2 million, with 3.6 units per 1,000 residents.

Based on its income and population, Deschutes County had the potential for $412.2 million in 2017 sales. Deschutes County exceeded that total, capturing an additional $74.4 million in FSDP sales. Deschutes County’s trade area captured 215,955 persons, with a pull factor of 1.2.

Hood River County could expect sales of $53.1 million based on its per capita income and population. Hood River County captured an additional $11.1 million in FSDP sales, with a trade area of 30,394 persons and a pull factor of 1.2.

Income adjustments for Lane County and Wasco County allowed each to capture slightly more food and beverage sales than their local incomes and population were expected to support. Lane County’s 2017 FSDP sales totaled $752.2 million with 2.4 establishments for every 1,000 residents. Lane County’s 2017 per capita income was 11 percent below Oregon’s, at $27,032, with potential sales of $714.9 million. Lane County captured an additional $37.3 million in sales, with a pull factor of 1.1. Wasco County’s 2017 per capita income, at $24,727, trailed the state by about $5,700 or 19 percent. Based on its income and population, Wasco County captured an additional $0.8 million in sales to total $48.7 million, producing a pull factor of 1.0.

Part 2: Leisure and Hospitality – the Industry Group

The leisure and hospitality group includes these industries: 1) food services and drinking places; 2) accommodation; and, 3) arts, entertainment and recreation. Several Oregon counties produce a pull factor greater than 1.0 once accommodation sales were mingled with food services and drinking places (known as accommodation and food services). Unfortunately, sales in arts, entertainment, and recreation were not disclosed for all Oregon counties. For the counties that did disclose sales across the leisure and hospitality group, six counties captured per capita sales above Oregon’s $3,395. All but two Oregon counties, (Marion and Polk) disclosed sales for accommodation and food services, with eight counties exceeding Oregon’s $2,850 per capita. However, a group of 13 Oregon’s counties fell more than $1,000 per capita shy of Oregon’s accommodation and food services sales.
Accommodation lifted Oregon’s per capita sales by $680, while Clatsop County captured an additional $2,629. Clatsop County maintained its top position in accommodation and food services, producing a pull factor of 2.7 and leading the state with sales of $7,128 per capita, well above Oregon’s $2,850. Clatsop County’s accommodation and food services’ trade area captured 105,021 people, reaching $276.7 million in sales while producing a surplus of $174.4 million.

Vacation properties, and other short-stay accommodations include thousands of income producing homes. However, vacation homes and short-stay accommodations are often managed on a contractual basis by a firm in the rental and leasing services industry, not accommodation. Likewise, an owner could manage and operate a vacation property but contract for cleaning and other services. An establishment managing short-stay accommodations on a contractual basis is classified in accommodation if they both manage the operation and provide the operating staff.

Arts, entertainment, and recreation lifted Clatsop County’s leisure and hospitality group to $297.7 million or $7,669 per capita, an addition of $540 per capita. But Clatsop County’s trade area shrank to 94,843 persons and its pull factor dialed back to 2.4. Oregon’s leisure and hospitality sales, which includes arts, entertainment and recreation, rose to $3,395 per capita, an additional $545.

Accommodation and food services lifted Lincoln County per capita sales to $5,465, with accommodation alone providing an addition of $2,325 per capita. Accommodation and food services produced a surplus of $146.2 million for Lincoln County on total sales of $262.1 million. Lincoln County also reported sales for arts, entertainment and recreation, lifting its leisure and hospitality total to $376.4 million. Lincoln County’s leisure and hospitality group captured a trade area of 130,757 persons.

Unlike Clatsop County, Lincoln’s pull factor rose to a state leading 2.7, with leisure and hospitality sales per capita reaching $7,847, nearly $4,500 above Oregon and about $200 in front of Clatsop.

Multnomah County ranked third for its leisure and hospitality sales per capita, at $5,693, increasing its total to $4.6 billion. Its pull factor rose slightly, to 1.5, with a sales surplus of about $1.4 billion.

Multnomah was one of three counties, including Hood River and Lincoln, to capture more than $1,000 in per capita arts, entertainment, and recreation sales. Lincoln County ranked first in 2017, with sales of $2,383 per capita, followed by Hood River at $1,541 and then Multnomah at $1,204.

Hood River County ranked fourth in Oregon, with leisure and hospitality sales reaching $5,546 per capita on total sales of $139.5 million. Accommodation provided Hood River County with a per capita sales boost of $1,452, ranking fourth in Oregon, while its per capita sales in arts, entertainment, and recreation ranked second ($1,541). Hood River County produced a higher pull factor in leisure and hospitality than Multnomah, at 1.7 (due in part to its lower per capita income), capturing a trade area of 42,208 persons.

Leisure and hospitality as a group produced sales of $832.9 million for Deschutes County or $4,553 per capita, good enough to rank fifth in Oregon with a pull factor of 1.3. Breaking out arts, entertainment, and recreation, its sales reached $125.8 million or $688 per capita, which ranked fourth in Oregon. Deschutes County’s leisure and hospitality trade area captured 236,281 persons, producing surplus sales of $188 million.

The COVID-19 Leisure and Hospitality Experience

Food services and drinking places represented just over 8 percent of Oregon’s 2019 covered employment with about 151,200 jobs. At the county level, food services and drinking places (FSDP) ranged from a low of 1.9 percent in Morrow to a high of 16.6 percent in Clatsop.

Multnomah County was home to more than 44,400 FSDP jobs and the industry’s share of total covered employment was similar to Oregon’s, at 8.6 percent. Washington County, on the other hand, ranked second for jobs, with nearly 21,500, yet its FSDP share was below Oregon’s, at 7.1 percent. The share of total employment in food and beverage is only helpful to a point. Likewise not all food and beverage sales are in FSDP. Breweries and wineries are often found in manufacturing but may include a tap house or tasting room, while lodging and recreational establishments can also have significant food and beverage sales.

The food and beverage experience changed overnight in Oregon as a result of COVID-19. Food services and drinking places have been hard hit during the COVID-19 epidemic, with a one-month loss of 82,300 jobs (53.7%), dropping the industry’s April 2020 total to 70,900. Compared with its total one year ago, food services and drinking places cut 87,500 jobs, a drop of 56.2 percent. Accommodation lost 13,400 jobs in April, falling to 9,500, a drop of 58.5 percent; over the year, accommodation cut 15,700 (-56.2%). Arts, entertainment, and recreation dropped to 13,600 jobs in April – down 48.3 percent over-the-month, with a loss of 50.9 percent over-the-year. Some businesses began to resume COVID-curtailed operations starting May 15th, but at a significantly reduced capacity due to continued social distancing guidelines. It remains to be seen how job losses will impact consumers’ ability to drop in to their favorite local restaurant for takeout or on-site service. If you are able, these businesses that continually cater to our need for good food and company could use your support today.

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