• Retail sales will continue moderate growth with a 3 to 4 percent increase.
• Shoppers will continue their frugal spending patterns into the foreseeable future.
• Discounters will see their sales growth flatten or fall unless they can find creative ways to retain their newly acquired customer base.
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Retailers who have struggled through the past three years have done the same thing the consumer has: adjusted inventories or services as necessary, dealt with budgets and cash-flow restrictions, changed suppliers and sought effective merchandising strategies to attract customers. Closures have happened at local and national levels. Hollywood Video has gone out of business and Blockbuster has closed stores and more will close in the coming year. In Clark County, some local and national restaurants have shuttered and some franchisees have thrown in the towel.
In early 2010, however, retail trade sales started to show improvement and all the economic indicators are that the trend will continue, albeit at a slow and steady pace.
Reports from the Washington State Department of Revenue show that retail store sales were down 6.76 percent for 2009 but they were in the positive category during the entire first half of 2010. Washington’s retail sales reports are two quarters behind, but predictions are that store-only sales continued to improve throughout the year, ending with a projected 3 to 4 percent growth over 2009. This is great news for local and national retailers alike.
Through October 2010, total chain-store sales were up 4.6 percent over 2009, according to the International Council of Shopping Centers, or ICSC. Some of the confidence retailers are experiencing was evident in Clark County during 2010, when a new WinCo, Buffalo Wild Wings, Chuck’s Produce and a second Costco store all opened.
The ICSC reported in mid-2010 that 28 percent of consumers are showing an inclination to spend more than in the prior year. However, shoppers are focusing their purchases on needs or replacement items rather than wants. Waiting for sales or coupons, setting budgets and spending limits and limiting time allowed for shopping are all tactics consumers use to control their purchases.
Value is still a strong incentive in the marketplace, and discount stores have benefitted from new consumer habits during the past three years.
Today, discount stores are still seeing sales growth, but it is at a slower rate than other retailers. And the luxury segment showed a 7.5 percent fiscal-year growth as of October 2010, compared to a 9.1 percent average monthly loss in 2009.
A limited survey of local retailers tells a similar story.
Local value-priced grocers, including Grocery Outlet and WinCo, called 2010 sales flat compared to growth in the recessionary years of 2007 through 2009, an indication that shoppers who switched stores due to the economy may be feeling financially able to shop at higher-priced competitors.
Local pizza restaurants Smokey’s Pizza and Blind Onion Pizza said sales were up a bit in 2010, with most of the increases coming after midyear. They expect to trend with state and national sales growth.
Clothing retailers that have been in the community over 10 years say their apparel sales are flat or up just slightly, a welcome trend.
Parkrose Hardware owner Bryan Ableidinger noted that his Vancouver store has aggressively increased its level of service and support, resulting in sales growth in 2010. He said that his customers are using their shopping budgets to purchase higher-quality products and brands.
Westfield Vancouver Mall reported in October that during 2010 it saw an uptick in monthly sales and traffic.
All retailers know that the state of retail sales in 2011 will depend on jobs, consumer confidence and their own ability to understand their customers, providing the right mix of merchandise and service.
The sweetest words in retail this year could be these from Ableidinger: “We’re budgeting for growth in 2011.”