Consumers are even more cautious

Shoppers are reining in spending even more across Richmond, but the slowdown is less severe than in 2009. And several surprising categories, such as auto sales, are rebounding.

Shoppers in Richmond, Henrico and Chesterfield spent $120 million less in the first quarter of 2010 than the same quarter last year, a decrease of 4.6 percent. Combined, businesses in the three localities generated $2.47 billion in sales. Overall spending for the region is down 10.5 percent compared with the first quarter of 2008.
But there is a silver lining. Although most retail categories continue to post declines compared with the same time last year, the extent of the damage is less severe than the drop from 2008 to 2009. For example, this year sales at furniture stores totaled $54.8 million, a decrease of 9.6 percent. That is an improvement from last year’s quarter to quarter slide of more than 20 percent.

The same trend applied to building supply and garden stores, electronics stores, clothing stores and sports and hobby stores, all of which declined by about 5 percent or less compared with double digit drops in 2009.

Perhaps the most surprising trend is that other categories that increased first quarter sales in 2009 have posted declines this time around. Food and beverage stores, which include supermarkets but not restaurants, lost $20 million in sales. Sales at those establishments fell 4.7 percent to $397 million for the first quarter of 2010.

Sales at health and beauty stores, which include pharmacies, fell 2 percent compared to an 11 percent boost last year.

Only three retail categories saw increased sales.

General merchandise stores such as Wal-Mart and Target increased sales by $6 million to a total of $456 million, a 1.3 percent increase. That is a bit below the 5 percent gain such stores made last year.

Motor vehicle and parts dealers brought in $57.23 million during the most recent quarter, an increase of 1.47 percent from the previous year. That is a turn from a roughly 6 percent quarter to quarter decrease in 2009.

Mike Allen, spokesman for the Virginia Automobile Dealers Association, said new vehicle sales statewide have increased on a month-to-month basis for the past six months.

“One reason is the breaking up of pent-up demand,” said Allen. “The average age of a new passenger car on Virginia roads is 10 years old. We haven’t seen that since World War II.”

Allen also attributes the increase to improved consumer confidence in the auto industry. He also said the rising price of used cars has contributed to an increase in sale totals.

Also turning a corner are area restaurants, which brought in $278.85 million, about $2 million more than last year for a gain of less than one percent. But that is still better than the 1.6 percent decrease they experienced the year before. Although it should be noted that Henrico and Chesterfield restaurants take all the credit for the increase. Restaurants in the city experienced a 3 percent drop in sales.

Al Harris is a BizSense reporter. Please send news tips to [email protected]

Shoppers are reining in spending even more across Richmond, but the slowdown is less severe than in 2009. And several surprising categories, such as auto sales, are rebounding.

Shoppers in Richmond, Henrico and Chesterfield spent $120 million less in the first quarter of 2010 than the same quarter last year, a decrease of 4.6 percent. Combined, businesses in the three localities generated $2.47 billion in sales. Overall spending for the region is down 10.5 percent compared with the first quarter of 2008.
But there is a silver lining. Although most retail categories continue to post declines compared with the same time last year, the extent of the damage is less severe than the drop from 2008 to 2009. For example, this year sales at furniture stores totaled $54.8 million, a decrease of 9.6 percent. That is an improvement from last year’s quarter to quarter slide of more than 20 percent.

The same trend applied to building supply and garden stores, electronics stores, clothing stores and sports and hobby stores, all of which declined by about 5 percent or less compared with double digit drops in 2009.

Perhaps the most surprising trend is that other categories that increased first quarter sales in 2009 have posted declines this time around. Food and beverage stores, which include supermarkets but not restaurants, lost $20 million in sales. Sales at those establishments fell 4.7 percent to $397 million for the first quarter of 2010.

Sales at health and beauty stores, which include pharmacies, fell 2 percent compared to an 11 percent boost last year.

Only three retail categories saw increased sales.

General merchandise stores such as Wal-Mart and Target increased sales by $6 million to a total of $456 million, a 1.3 percent increase. That is a bit below the 5 percent gain such stores made last year.

Motor vehicle and parts dealers brought in $57.23 million during the most recent quarter, an increase of 1.47 percent from the previous year. That is a turn from a roughly 6 percent quarter to quarter decrease in 2009.

Mike Allen, spokesman for the Virginia Automobile Dealers Association, said new vehicle sales statewide have increased on a month-to-month basis for the past six months.

“One reason is the breaking up of pent-up demand,” said Allen. “The average age of a new passenger car on Virginia roads is 10 years old. We haven’t seen that since World War II.”

Allen also attributes the increase to improved consumer confidence in the auto industry. He also said the rising price of used cars has contributed to an increase in sale totals.

Also turning a corner are area restaurants, which brought in $278.85 million, about $2 million more than last year for a gain of less than one percent. But that is still better than the 1.6 percent decrease they experienced the year before. Although it should be noted that Henrico and Chesterfield restaurants take all the credit for the increase. Restaurants in the city experienced a 3 percent drop in sales.

Al Harris is a BizSense reporter. Please send news tips to [email protected]

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