First-Quarter Sales Fall 8.3% From 1990 Figure : Economy: S.D. decline, worse than state, national retail figures, blamed on aftermath of war and recession.
Smarting from the lingering effects of the Persian Gulf War and the nationwide recession, San Diego County retailers saw first-quarter sales drop 8.3% from the corresponding three months last year. Countywide retail sales plunged by more than 10% during March alone.
The local decline in retail sales, which was even more pronounced when adjusting for a local inflation rate of more than 7%, was worse than the 0.3% decrease in U.S. retail sales overall and the 2.1% drop in California over the quarter, according to data compiled in a monthly survey by the U.S. Bureau of the Census.
A key component of economic health, retail sales growth in the county has been declining for the past year in inflation-adjusted dollars, according to Max Schetter, research director for the Greater San Diego Chamber of Commerce.
Particularly hard-hit this year have been sales of durable goods such as automobiles, furniture, appliances and building materials. Sales of such items were off 16.7% for the quarter and 19.3% for the month of March.
Department stores in the county also have suffered, reporting a 4.4% drop in March sales from March of last year.
The aftermath of the Persian Gulf War continues to hurt local retail sales. Three months after the end of hostilities, about 15,000, or 25%, of the 60,000 local servicemen and women sent to the Mideast theater of operations remain overseas and out of local stores, auto showrooms and other retail outlets.
The war also continues to hurt local merchants, because many of the dependent families who left the area for the war have yet to return.
But local observers say the national recession and the lack of consumer confidence are far larger factors in the sluggish consumer activity. Schetter said the reason the decline in local retail sales is steeper than in the rest of the nation may be because the recession took longer to reach here.
“A drop in retail sales is often the result of a recession, not the cause. People quit buying retail goods when salaries are either reduced or threatened,” said Schetter, adding that the nation as a whole has been officially in a recession since last July.
Retail sales in the county over the year’s first three months totaled $3.9 billion, down from $4.26 billion in the first quarter of 1990. For just the month of March, sales slumped to $1.4 billion, off 10.3% from the $1.57 billion in sales in March, 1990. The Bureau of the Census surveys more than 10,000 retailers nationwide monthly, said survey statistician Nancy Piesto.
Bob Heintz, general manager of De La Fuente Cadillac in El Cajon, blamed a decline in shopper traffic for a year-to-date decline of sales at his dealership of 10% to 15% on a year-to-year basis.
The slump in consumer activity has yet to dramatically affect local retail jobs, however. Jack Nowell, labor market analyst with the state Employment Development Department, said the county’s retail jobs averaged 190,800 over the first quarter, down only slightly from the 191,500 average over first quarter of 1990.
