Gas, Energy Prices Hurt Sales
Retailers Thursday reported a drop in nationwide sales during April, and some Brevard County organizations are not faring much better.Analysts blame retail sluggishness on rising consumer costs, such as gas prices, which in Florida are near record highs; and on a weak Florida housing market.
There were bright spots among some Brevard retailers, who have seen small or moderate increases in sales, but attributed it to niche factors, such as moving to high-growth locations, rather than economic strength.
“We still believe that the effects of the downturn in housing here in Florida are far from over,” said Chris McCarty, survey director at the University of Florida’s Bureau of Economic and Business Research.
“We have been expecting a very large effect on consumers for over a year now,” McCarty said. “Our prediction is still that the stalled housing market and the effect it has on the ability to tap Florida home equity loan funds will have far-reaching effects, extending to the retail sector.”
The latest University of Florida survey found that consumer confidence in Florida remained flat in April, compared with March 2007 and April 2006.
Some local retailers, however, said despite a dropoff in Florida mortgage activity, they have been somewhat immune to sluggishness in consumer spending.
Diane Slotnick, general manager of The Avenue Viera outdoor shopping mall in Viera, said sales up were 10 percent in the first quarter of the year among stores that have been around since the beginning of last year.
Bill Hartley, marketing manager at Merritt Square Mall on Merrit Island, said the number of visitors to Merritt Square in the first quarter was about 1.4 million - about the same as the same period last year.
Florida home prices are projected to decline further this year, and as national retailers released their monthly sales figures Thursday, weak performers cut through all segments of the industry.
That included Wal-Mart Stores Inc., which recorded a rare drop in business, as well as Abercrombie & Fitch Co., Federated Department Stores Inc. and J.C. Penney Co.
At Hammond Kitchen & Bath in Melbourne, sales were down in the first quarter, but the company exceeded its sales goal in April, said Scott Whipple, the store’s assistant sales manager.
Whipple attributed the decrease to the slowdown in the Brevard housing market, which has moved the company’s primary business from new-home construction to people remodeling their existing homes.
The nationwide UBS-International Council of Shopping Centers sales tally posted a decline of 2.4 percent, the biggest drop since at least 1970.
The tally is based on same-store sales or sales at stores open at least a year, which are considered a key indicator of retailers’ health.
Michael Niemira, the council’s chief economist, said it was the weakest spring performance since 2003, when the tally registered a 1.5 percent gain for the two-month period.
In Brevard County, total taxable sales fell 4.7 percent to $757.6 million in January, down from $795.2 million in January 2006, according to the Florida Department of Revenue.
It’s too soon to tell for now, but as residents continue to struggle with rising Florida home mortgage costs, the trend of low consumer spending may be just beginning.
SOURCE: Florida Today
