Holiday shoppers let down retailers Lower than expected sales growth reflects economy countywide


The following may surprise anyone who tried to find a parking spot while shopping in Howard County last weekend: Local merchants were not blown away by 1996 holiday sales.

Yes, there was the typical Christmas rush. And yes, sales were up from last year, according to interviews with merchants yesterday.

But overall, the retail sector seems to mirror the broader Howard economy as described in figures released this month by the county government: Things are getting better -- slowly.

"It's just sort of bumping along," Howard County Budget Administrator Raymond S. Wacks said about the overall economy.

Although Maryland as a state lags behind the pace of economic growth nationwide -- due in large part to government downsizing -- Howard merchants had reason to be optimistic when they hung their Christmas decorations. Recent county figures had suggested that for the first time since the recession of the early 1990s, the growth rate for tax revenues was increasing -- an indication of an improving economy.

Optimistic merchants expected an increase of up to 10 percent in sales over last year's holiday season, generally viewed as a poor one. But based on early estimates, the rise appears closer to 3 percent to 4 percent, said Lee Wilhide, owner of Columbia-based Wilhide's Flowers.

"It's a little less than what we hoped for," said Wilhide, who represents retail merchants on the Howard County Economic Indicators Committee, which publishes quarterly reports on the county's economy.

The December report says that Howard County, like other local entities, is starting to feel the overall recovery. But, the report states, "sustained growth still eludes many sectors."

Among other data, the December report analyzed retail figures from October and November. "Consumers are spending cautiously," the report warned.

You don't have to tell that to Antoine Destin, associate manager of The Gap at The Mall in Columbia. "We haven't had such a great month," he said yesterday.

On the eastern edge of Columbia, the manager of a warehouse-style store said that although customers jammed parking lots, they generated sales that probably were only 3 percent to 4 percent better than last year.

"It was better than last year, let's put it that way," said the manager, who asked not to be identified because his store forbids local employees to speak to reporters. "But I didn't see a lot of high-ticket items going out."

At another large east Columbia store -- Bed Bath & Beyond -- operations manager Wayne Ernest said sales were hurt by the relatively short holiday season. The late Thanksgiving cut out a weekend of shopping.

But last-minute shoppers came through for Ernest. "We were hoping it was going to pick up, and it did," he said.

In Ellicott City, Chatham Mall is expecting a 3 percent to 4 percent increase over last year's slow sales -- and merchants will take that even if they were hoping for higher gains.

"I think that after the past couple of years, retailers are happy if it goes up at all," said Natalie Swirdovich, manager of the mall on U.S. 40.

She indicated that the new, Long Gate warehouse-style retail center nearby was drawing some of her customer base. "There is some initial curiosity that hurts at first," she said. "I think it will come back."

At Long Gate, two merchants said they did well, although their stores are too new to have had figures from last year to compare. "We did have some very good sales," said Suzanne Vernetti, merchandising manager at Barnes & Noble Bookstore.

To the north, initial sales reports appear mixed from Main Street in historic Ellicott City. "They were OK," said Jaime Day, a saleswoman at Froogle Fashions. "They could have been a lot better."

Countered Janet Vanderlipp of the Forget-Me-Not store: "We did fine. We did not have to mark things down like we did last year."

At Wilhide's Flowers, which has three Howard County locations, Lee Wilhide said his holiday sales reflected trends in the county.

Businesses are buying fewer flowers for holiday gifts and parties. "I keep hearing it's the easiest thing to cut out of the budgets," he said. "It used to be companies would go big for Christmas [parties]. Now they're interested in food and booze, but they don't go as far as decorating and everything."

But Wilhide said his residential sales were up because Howard's time-strapped residents were looking to buy a quick $25 to $50 gift -- delivered right to someone's door. "We sell service more than we sell product," he said.

As for other parts of the county economy, the Economic Indicators Committee reported this month:

* More people are working. Unemployment rates in the fall of 1996 were 3.4 percent, compared with 4.3 percent in the fall of 1995.

* "Personal services" industries are growing. Companies that have downsized need outside firms to handle accounting, personnel and finance services. "If they're a widget-building company, they're just building widgets," said Wacks, the county budget administrator, who joked, "I'd be out-sourced in private industry."

* Banking jobs have declined because of "mergers, acquisitions and the associated downsizing."

* Commercial real estate vacancy rates continue to fall and are now below 6 percent. Rental rates are rising with the increased demand for space.

* Sales volumes for home construction is outpacing 1995 levels, but profit margins remain thin. Sales are slow for high-priced homes in the $400,000 ballpark. The current inventory of these homes would take nearly eight years to move at the rate such homes are selling now.

* A standard home in Howard County now sells for $230,000. Competition from neighboring counties is fierce because residents are willing to locate in places such as Carroll County and put up with a longer commute.

"People want to get away from the cities," said Harry "Chip" Lundy, chief executive officer of Columbia-based Williamsburg Builders.

He said Howard County's economy suffered from its ties to the overall Maryland economy, which he stressed is not as business-friendly as states like Virginia and North Carolina.

"The economy is not really growing," said Lundy, referring to Maryland as a whole. "There's not a whole lot of jobs being created."

Pub Date: 12/27/96

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