THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, January 22, 1996 TAG: 9601200186
SECTION: BUSINESS WEEKLY PAGE: 19 EDITION: FINAL
SERIES: Forecast 1996
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 56 lines
Local economists forecast small to moderate gains in retail sales for Hampton Roads in 1996, saying consumers will be more cautious with their spending in part because of high debt levels.
An economic forecast by Old Dominion University calls for the area's retail sales to rise 5 percent, or 2 to 2.5 percent after adjusting for inflation, to $12.17 billion. That's up from last year's estimate of $11.59 billion.
Economist John W. Whaley, however, thinks regional retail sales will inch up 1.5 percent after adjusting for inflation while auto sales, down about 7 percent in '95, will decline about 1 percent in '96. He points to several signs that the area's economy is slowing down, including an increase in bankruptcies and unemployment claims.
If local residents are uncertain about their futures, they may stay away from the shopping centers.
Still, the negative drag from military downsizing has largely disappeared, which could allow Hampton Roads to grow as fast or faster than the national economy over the next several years, said Whaley, director of economic services for the Hampton Roads Planning District Commission.
``The worst is certainly behind us,'' he said.
The vote is still out on 1995 retail sales. The U.S. Commerce Department's numbers, which are usually available in late January, have been delayed by the federal shutdown. From January to October 1995, total taxable sales in Hampton Roads rose about 5.5 percent, without adjusting for inflation, according to state Department of Taxation numbers.
No one knows what happened over the holidays when retailers reap a substantial portion of their revenues. Some experts say the holiday season was gloomy, while others say shoppers spent enough to finish 1995 on a good note.
The Federal Reserve said that 1995 ended with modest growth in the economy but a sluggish holiday season for many retailers. The Fed survey said sales were below expectations, forcing retailers to discount merchandise.
``I'm more optimistic,'' said Roy Pearson, director of the Bureau of Research at the College of William and Mary. ``Everyone was saying that it was a blue Christmas, but when you see what retailers did as a whole as opposed to a per store basis, it wasn't that gloomy.''
While customers probably opened their purses slightly wider in 1995, they had more places to choose where to spend their money. Newcomers included everyone from Hannaford Bros. supermarkets to discounters Hills Stores.
``With all the new shopping centers and stores in there, I'm sure a lot of individual stores down here did not see gains,'' said Pearson. ILLUSTRATION: File photo
A wave of new merchants built stores in Hampton Roads last year.
by CNB