Sales Increase but Not Enough to Cheer About : Trade: County’s retailers say first-quarter improvements simply reflect how bad conditions were at the same time a year ago.
Led by improving auto and building materials sales, retail activity in San Diego County rose nearly 5% the first three months of the year over the corresponding period in 1991.
But the improvement is largely a reflection of how awful sales were during last year’s first quarter, a period that bracketed the Persian Gulf War, when about 80,000 San Diego-based servicemen and women were absent from malls and showrooms.
And so, few local retailers are gushing with optimism these days. Many report that retail sales remain flat to sluggish. “Sales are just OK , not great this year,” said Robert Sorensen, vice president of Hahn Co., the San Diego based owner and manager of 46 regional malls.
According to a regular survey conducted by the U.S. Census Bureau, retail sales in the county were $4.1 billion over the first three months of this year, up 4.8% from about $3.9 billion in January, February and March of 1991.
If employment is any indication, retailing continues to sink in the county. According to the state Employment Development Department, total trade employment in the county, including retail and warehousing, was 223,100 jobs in April, down 6% from the 229,100 jobs as of April 1991.
That San Diego’s first-quarter retail sales improved more than California’s, up only 2.2% statewide, may show that the military is more vital to San Diego’s economy than to the rest of the state’s. Nationwide, retail sales rose 5.2% over the first quarter.
Sales of building materials were up 14.7% over the quarter, a reflection of stronger new home-building and remodeling activity.
Car sales were up 10.7%, an indication that show rooms were relatively deserted for much of 1991’s first quarter with so many potential buyers preparing for battle in the Persian Gulf, said John Hine, owner of Pontiac and Mazda dealerships in Mission Valley.
“I would say business itself is somewhat spotty, not a real consistent marketplace right now. There are good days and poor days, but overall traffic is much better,” Hine said. The car market remains relatively sluggish, despite attractive pricing and financing deals made available by manufacturers to spur the market.
Jon Bilger, a leasing agent who specializes in retail space at CB Commercial brokerage in San Diego, said the consensus among retail tenants with whom he has been in contact is that sales are “about flat, maybe just barely keeping pace with inflation.” Small tenants are especially hurting, Bilger said, with some reporting 10% drops in sales.
Larger specialty warehouse retailers are doing better, Bilger said, with many chains actively scouting for San Diego County locations.
The Hahn Co.’s Sorensen said sales are up about 6% in Hahn-operated malls through April.
“The bright spot is the Gap stores, which have been extremely strong,” Sorensen said. “They have been the leader (among Hahn tenants) for 18 months in terms of percentage of increase in sales. Jewelry is down significantly for last 18 months. Everyone else is doing moderately well. No one category of merchandise is taking off or falling through the floor.”
