The problem with spreadsheets and charts is that they present only the pure mathematical facts. But the reasons for the ups and downs in the numbers on a screen are often hard to disentangle from the broader economic picture. What can feel like progress in local economic finances can just as easily be a mirage of economic growth rather than the real thing.
Thankfully, retail economic growth in Custer County appears robust, as evidenced by data from the Custer County 2% sales tax over the past decade. During that period, the economy went from a slow recovery after the 2008 financial crisis to working through the COVID pandemic, then inflation, and, most recently, tariffs.
Using the data from the Custer County yearly budget reports on sales taxes collected is useful because it provides a snapshot of how the retail sector of the economy has fared over a longer timeline (and the math is easy to work with, being able to multiply the sales tax number by 50 to get a total for retail sales in all of Custer County). This means that around $85 million in retail sales occurred in the Valley in 2025.
Yet knowing that number is only useful if we consider the inflation rate over that time. Inflation is the general, sustained increase in prices for goods and services across an economy over time, which reduces the purchasing power of money. As the chart the Tribune created shows, in 2015, Custer County collected $567,482 in sales taxes. This would equate to $28 million in retail activity.
Yet, as most know, inflation rates exploded higher due to the breakdown of global trade caused by the pandemic. Retail product prices rose, and so did the sales taxes collected. So, the trick is to separate out the national expected rate of inflation and compare the expected number with the actual number collected, starting from a previous point in time.
According to the U.S. Bureau of Labor Statistics, the total inflation rate from 2015 to 2025 was 35%. Starting in 2015, we would expect that same number to be $771,850. In other words, if retail sales were actually flat, we would expect sales tax revenue to be $771,850.
Instead, the unaudited sales tax figure for 2025 is around 1 million dollars above what we would expect from no growth in retail sales.
Most retail activity in Custer happens in the two towns of Silver Cliff and Westcliffe. Unlike other urban regions, such as Cañon City, the Valley does not have many large corporate box stores. For example, Wal-Mart in Fremont County alone accounts for $100 million in retail sales out of an estimated total of $600 million. However, we do have a few box stores, and they have a meaningful impact on the local economy. While the revenue numbers of local stores are not available, we can estimate some of the sales from national averages with public information.
• Ace Hardware (Locally owned franchise) – $8.5 million
• Dollar General – $2 Million
• Family Dollar (now closed) – $1.5 million
• Lowe’s Market – $4.5 Million
• Total – $16.5 million
This makes the Valley’s economy unique, as national brands have a smaller impact on net retail sales. Of course, a lot of people go “down the hill” to shop at Costco, Wal-Mart, and others. Plus, online orders incur sales taxes collected by the state and distributed to local governments. Even with these inclusions, we can see that increased retail spending in this region is an encouraging sign for local small businesses.
This chart and article are better understood as an attempt to separate the growth we have had from inflation. In 2021, the region saw a significant increase in homebuilding, and the prices of construction materials rose considerably in lockstep. In data science, there is a saying, “Be careful when particularizing from the general.” Meaning that the inflation rate for locally-sold building products was above the national average over the time frame we have been looking at. Home building products sold locally were clearly above the national average of 35%. But the increased demand for homes in the region was real and has allowed more retail sales from locally-owned companies, driving more income in the region. Builders in the Valley have specialized in luxury custom homes, with consistent demand that has weathered the national homebuilding slump. The skill sets and products sold by local companies specializing in custom homes have also enabled the export of these services to neighboring areas such as Cañon City, Salida, and Buena Vista.
Surges in tourism have also boosted retail sales, and next week we will examine this by looking at increases in lodging taxes.
– Jordan Hedberg
