Survey shows increase in annual profits for local retailers
By NINA COOLIDGE
Lexington retailers were seeing dollar signs after the 2006 holiday season. And they were not alone.
National retail sales in December beat out economists' predictions, reflecting better-than-expected holiday sales.
The Commerce Department reported last month that national December sales grew 0.9 percent, equaling about $369.9 billion. The increase was higher than the 0.7 percent growth that experts had predicted.
Local retailers reported that their holiday sales followed the positive national trend.
"We finally had a year where sales definitely increased during the holiday season," said Lucia Owens, owner of Sunday's Child, a children’s store located downtown on West Washington Street.
This had not been the trend for Lexington businesses in the past few years, Owens said.
Susan Crawford, who manages Papagallo on North Main Street, said she also saw small increases in sales during the holiday season. According to Crawford, however, her store is busiest in the fall during Washington and Lee University’s Parents’ Weekend.
Nationally, economists noted lower energy prices and increased job creation as factors for this increase in spending. Unseasonably warm weather and heavy discounts at stores brought out more shoppers.
Sammy Moore, executive director of the Lexington-Rockbridge County Chamber of Commerce, noted that warm weather in Lexington definitely encouraged more people to shop.
The Chamber of Commerce hands out a survey to local retailers every winter after the Christmas season, and Moore said this year he was pleasantly surprised by the results. According to the survey, 68 percent of downtown businesses surveyed reported that 2006 holiday sales were up from 2005, while 24 percent reported their sales stayed about the same.
Strong holiday sales were not the only positive results of the Chamber's survey. According to Moore, retailers were very optimistic overall about the coming year. About 38 percent of businesses reported they were "very optimistic" about strong growth for the coming year, and 35 percent were predicting moderate growth.
Overall, businesses downtown reported that their sales were higher in 2006. Nine percent reported "significantly higher" sales and 54 percent reported "higher than normal" sales.
The survey also asked businesses about Internet sales, expected expansions and new business for 2007.
Retail sales are an important indicator of the economy because of the important role consumer spending plays in the general economy, accounting for about two thirds of all economic activity. The holiday season is historically one of the most profitable times for retailers.
One of the Chamber’s highest priorities is attracting new businesses and new customers to the downtown area. Recently, the Chamber hired a new promotions manager to help achieve this goal.
Although businesses in downtown Lexington represent a very diverse range of retail products, they all share a similar small-store appeal. The downtown shopping area is known among residents for its historic feel and unique shops.
According to Moore, finding a balance between new businesses and maintaining this atmosphere is a difficult process.
"If we become Everywhere, USA, we lose that small-town charm," Moore said.
Currently, the Chamber is working on developing a new, more comprehensive survey to get a better idea of trends in the local economy, particularly during the holiday season.
Produced by Washington and Lee journalism students.
Lead supervisor: Prof. Claudette Artwick
Reporting supervisors:
Technical supervisor: Michael Todd