Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, August 15, 1993 TAG: 9308190053
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: Sandra Brown Kelly
DATELINE: LENGTH: Medium
But sales figures need mor than a comparison against a year ago to be meaningful because there are so many things that can mess with peoples' buying habits. Weather, for one.
For example, an ice cream store on Roanoke's City Market actually had less lunchtime business than usual during the recent 90-plus days. Downtown workers stayed holed up in their air conditioned offices instead of venturing onto hot sidewalks.
Other things that put people out of the buying mood include layoffs and elections. Consumer confidence is affected when events make people worry if their income will continue to grow or keep coming in at all.
For example, when Dominion Bank announced job cutbacks, owners of a men's shop and of a book store in downtown Roanoke said sales dropped. If you don't know wheter you're likely to have a job for long, you aren't as inclined to buy the latest best-seller or a new suit.
When money gets tight, consumers tend to look for little ways to cut corners first. Depending on priorities, we might merely stretch the time between visits to the hair salon. Or decide not to buy the new sofa - furniture manufacturers and retailers live by this sad truth: People can live without new furniture.
In fact, we can live without much more of what we buy so we only buy volume when life looks stable.
That might be what happened in January, February and March. The presidential election was over and we knew what we were getting, sort of. Also, companies had cut so many jobs that surely there couldn't be many more to cut. Plus, in Roanoke, First Union Corp. has announced new jobs that almost offset the cuts by the bank it bought, Dominion.
Anyway, the people who lost jobs appear to be surviving. We all know some lucky sucker who was just at the right age to take early retirement, so now he's sailing off the Eastern Shore and, even with less income, getting by just fine.
So considering all of that, what should we make out of the Roanoke Valley's big leap in retail sales from a year ago?
If you look at the $689 million in sales in the first quarter of 1993 along with figures from first quarters when the good old days of the 1980s were just starting to fade, the results are less impressive.
First quarter 1987 sales for the Roanoke Valley were some $401.1 million. The next year's first quarter _ 1988 _ was less, $387.7 million. In the first quarter 1989, sales were back up, to $408.9 million, but nothing to jump up and down about except that it was a gain when the previous year's first quarter had been a loss.
And if you look at 1990 and 1991, the story is similar: Sales of about $441 million in the first quarter '90; $422.1 in the first quarter '91. Then sales were down in the first quarter '92 to $421 million.> This likely means the 1993 first quarter is more WHEW! than WOW! Shoppers have less anxiety and, at least in the first quarter showed that with their spending.
However, the comeback pattern seems to be national in scope.
The international Council of Shopping Centers reported last month that sales per square foot at shopping malls and centers were up 1.2 percent against the same period in 1992. And 1992 was an increas of nearly 3 percent over the previous year.
The Institute of Real Estate Management has a new study that also supports the optimistic trend.
That study is based on 1992 figures. It found that median income for shopping centers, based on average actual occupancy, was $8.27 per square foot for open centers, about the same in 1991.
Enclosed malls reported a 4.7 percent increase per square foot, from $10.32 in 1991 to $10.89.
But what looks like extraordinarily good news will only be extraordinary if it holds for the rest of the year, and, wouldn't you know it, the growth rate in retail sales in the state slowed just after the first quarter.
Based on preliminary second quarter figures, it appears this year will be closed to second quarter '92. But it's not to be taken as a Cassandra that more doldrums are coming.
Roy Pearson, director of the Bureau of Business Research and author of the Virginia Business Report from the College of William and Mary, predicts a surge of sales in the third quarter.
Don't worry about April, he said. Pearson said a cooling of the growth rate is expected.
`We do not regard the present slakening in retail sales growth as either alarming or likely to endure.' Pearson said.
by CNB