Sales sag in city retail centers
Santa Monica’s economy posted gains for the first time in nearly two years, according to sales tax figures released Wednesday.
Compared to third quarter results from 2001, sales at local businesses from June to September 2002 improved citywide by 1.3 percent. Leading the recovery was a 16.1 percent increase in sales at shops along Montana Avenue, a 15.8 percent increase in sales at stores along Wilshire Boulevard and an 8.2 percent improvement along Main Street.
“I think we have turned the corner,” said Gwen Pentecost, a city economic analyst. “Businesses are coming back. It’s not grand and spectacular, but they are more than hanging in there.”
“Businesses are coming back. It’s not grand and spectacular, but they are more than hanging in there.” — — GWEN PENTECOST Santa Monica Economic Analyst
After two straight quarters of losses — 11 percent in the first quarter and more than 6 percent in the second — sales at stores citywide are still down 3.2 percent for the year.
However, 2001 sales were down 3.2 percent for the entire year. And officials point out there is still one more quarter of sales to be reported in 2002, which will possibly help the city to nearly break even. Fourth quarter sales are generally high because of the winter holidays, officials said.
“We’re still down overall,” Pentecost said. “But when you look at the bottom (line), we made more on sales this quarter in 2002 than in any other quarter, except for Christmas, since 2000.”
Sales in the city’s retail centers are still sagging, though.
On the Third Street Promenade, stores saw their sales fall by 3.4 percent last quarter, and they are down 2.7 percent for the year. Meanwhile, sales at shops throughout the city’s downtown remained flat, and the entire district is down 2.7 percent for the year.
And in Santa Monica Place Mall, sales last quarter were down 3.8 percent, and they are down 12.3 percent for the year.
Pentecost said those declines are due mainly to large rental vacancies that have since been filled. New businesses have signed leases that will have a dramatic impact on retail sales citywide, she said.
“Taxable sales is all part of one piece,” Pentecost said. “When you have a generally healthy economy, it shows up in the retail and sales figures.”
Other good economic indicators are appearing. Pentecost said employment is now on the rise and office vacancy rates are coming down. But officials won’t know for sure if vacancy rates and unemployment are improving until April and December, respectively.
Another good sign Pentecost sees is that businesses — especially electronics and technology companies — are investing in themselves again.
“A lot of business put their spending on hold when they weren’t too sure of what was going on,” she said. “Well, now it appears they are starting to take that money and reinvest it. That’s going to be key to a recovery across the country.”
Pentecost also said the confluence of a targeted tourism campaign and a weak dollar have attracted many overseas visitors recently, who have helped drive retail and restaurant sales.
“Once it becomes a good deal to come here, then they come here,” she said.
Originally published in the Santa Monica Daily Press print edition on January 9, 2003. Read the original PDF.