For stores, a scant serving of hope for holiday season

By Buck Wargo

Monday, Nov. 22, 2010 | 2 a.m.

Even retail analysts and shop owners are wary of being labeled as Scrooge this year.

They say that although sales will remain weak by historic standards in Las Vegas, the now-underway holiday season will be an improvement over the past two years.

Retail sales across the country will increase 2.3 percent over last year, according to a projection by the National Retail Federation, and local analysts said that’s their expectation as well for Southern Nevada. A national report released last week showed October marked the fourth straight increase in retail sales.

“I think it’s going to be better than 2009, but is not back to a healthy Christmas season,” said John Restrepo, principal at retail consultant Restrepo Consulting Group.

That would be welcome news because taxable sales in November and December 2009 for Clark County were $4.9 billion, down 9.5 percent from $5.4 billion in 2008 and down 22.4 percent from an all-time high of $6.3 billion in the same period in 2007.

Although the recession has officially ended for the rest of the nation, Nevada is still perceived to be in one. For instance, taxable sales in Clark County during the first eight months of 2010 (the only months available so far) fell 1.7 percent compared with the same period in 2009.

On the other hand, taxable sales in July and August were better than the same months a year earlier, boosted especially by increased sales in apparel and electronics, which prove popular holiday gifts as well.

Restrepo said shoppers seem to be purchasing more store-brand names and shopping at value stores rather than paying for big names and more expensive brands.

And in a throwback to the 1960s and 1970s — in the days before mass use of credit cards — shoppers also are laying away more purchases, Restrepo said. Those same consumers are paying down debt.

Restrepo calls it a cultural shift in spending patterns that hasn’t occurred since the Great Depression taught a whole generation the importance of frugality and saving.

“This is our Great Depression, and the impact is going to be long term,” Restrepo said. “People realize the dangers of being overleveraged and are being more conservative in how they spend money and in their Christmas shopping. They may have bought four sweaters, but now they’re only buying two.”

Local storefront retailers are not only being buffeted by the economy but also by the continuing growth in online spending. Two-thirds of retailers surveyed nationally said they expect their company’s online sales to grow by 15 percent, she said.

It’s not only bad news for the local economy but means lost sales tax revenue for local governments, said Alyson Bettelman, a retail analyst with Las Vegas-based Applied Analysis.

Russ Joyner, general manager of the Miracle Mile Shops at Planet Hollywood, said he’d be happy if his tenants make any profit, given the region’s high unemployment rate.

“One percent is a victory when comparing it to previous years,” Joyner said.

The Miracle Mile Shops, which caters to much lower price points than luxury Strip retailers, expects to benefit from the tourist traffic generated by the opening of CityCenter and the Cosmopolitan next month.

Laurie Paquette, vice president of asset management with General Growth Properties, said she remains optimistic that Las Vegas can beat the 2.3 percent national number touted by the National Retail Federation. General Growth owns the Fashion Show, Meadows and Boulevard malls and the Shoppes at the Palazzo and Grand Canal Shoppes at the Venetian.

“We definitely saw the downturn in 2008 and it came back a little in 2009,” Paquette said. “We’re expecting a good holiday season with consumer confidence up and the economic indicators trending upward.

“The last six weeks we’ve had good traffic and sales.”

Paquette said she expects similar increases at all properties whether they cater to tourists on the Strip or locals at the Boulevard and Meadows malls. The Strip shopping centers are busy year-round and don’t see a sales spike during the holidays, she said.