The Columbian | Serving Clark County, Washington

Clark County retail sales showed their first year-over-year gain in more than two years at the start of 2010, an upturn local store owners chalk up to renewed consumer optimism.

That could be the best explanation for the 4.4 percent increase in store-only sales in the three months ending in March, compared to the first quarter of 2009.

Sales had been dropping at Clark County retailers since the second half of 2007, according to a state report issued Thursday. The Washington State Department of Revenue reported that store-only retail sales reached $421.6 million in the first three months of 2010 in Clark County. Sales were up from $403.8 million during the same period in 2009.

Shopkeepers see the sales increase as proof that customers still are willing to spend, despite the county’s high rate of unemployment — at 13 percent in May — and falling home values, which are down by more than 17 percent over the last two years.

But shrinking home values and earnings are having an affect on shoppers who insist on rock-bottom prices, said Adam Stites, president of Xtremez, a Vancouver retailer that sells paint ball and sports equipment.

“Before, we could feature items (priced) at or above $250. Now it’s rare that we feature something above $199,” Stites said.

Store sales for Xtremez were flat through 2009 and into the first quarter of 2010, Stites said.

“The offer has to be much more compelling than it was in the past. The challenge for retailers is, how do you accommodate that without sacrificing margin,” he said.

Some retailers have adjusted by keeping a closer eye on store inventory levels, said Pam Lindloff, an associate vice president with NAI Norris Beggs and Simpson in Vancouver.

“That is the big thing, being more careful about understanding who your customer is, and ‘Am I stocking the things most of my customers want?’” said Lindloff, who specializes in the retail real estate market.

Despite the sales increase at the start of the year, Lindloff and others don’t expect a rush by national stores to expand or set up shop in Clark County this year.

However, she has worked with many local retailers who are taking advantage of lower leasing rates to move into more desirable locations. In the meantime, the larger chains are beginning to start expansion projects in Portland, which could mean Vancouver will follow, Lindloff said.

Some are considering moves into Westfield Vancouver mall, according to Paige Allen, general manager. She would not provide further details, saying contracts are still under negotiation.

“We will have some exciting announcements in 2011,” Allen said.

In the meantime, Stites said his company would continue to focus on its online sales, a growing retail market for Xtremez. Web sales accounted for about 98 percent of the company’s sales of more than $10 million in 2009.

“Consumers are getting more and more comfortable with buying online and we’re benefiting with that,” Stites said.

Including nonstore sales categories like construction, manufacturing and services, Clark County saw a 1.05 percent decline in its total first-quarter taxable sales. First-quarter total taxable sales totaled $916.1 million. Sales were down $9.8 million for the period, according to the Department of Revenue.

A drop in construction projects that are subject to sales tax is the primary cause of the overall sales decline. In Clark County, this work fell by 18.9 percent, dropping to $117.9 million worth of projects in the first quarter, down from $145.4 million worth in 2009.

Statewide, taxable retail sales declined 2.9 percent to $22.6 billion during the first quarter of 2010, the revenue department reported. Store-only retail trade statewide increased 1.9 percent to $10.2 billion over the first quarter of 2009.

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