Economy puts pinch on county retail sales

Lacey one bright spot in economic downturn

By Rolf Boone | The Olympian • Published October 15, 2008

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Taxable retail sales in Thurston County dropped nearly 6 percent in the second quarter compared with 2007, another blow to South Sound's economy at a time when some local governments are considering layoffs to offset lost revenue.

Signs of a slower economy appeared in the first quarter of the year, when the county's taxable retail sales fell 1.3 percent, according to state Department of Revenue data. It was the first decline in 13 years.

In the second quarter, taxable retail sales in the county fell 5.61 percent to $1.01 billion from $1.07 billion in the same period in 2007.

Big items

Sales of "big-ticket" items such as cars, recreational vehicles and boats were down in the county and statewide, said Department of Revenue spokesman Mike Gowrylow.

The same was true of furniture, building materials and gardening equipment, Gowrylow said.

"Definitely car sales were very, very weak," he said.

In Olympia, home to the Olympia Auto Mall, taxable retail sales generated by motor vehicle and parts dealers fell 15.6 percent and building materials fell 22.8 percent, the second-quarter data show.

A spokeswoman for the auto mall could not be reached.

In Tumwater, taxable retail sales generated by furniture and home furnishings stores fell 25.8 percent, the data show. Tumwater Finance Director Jim Hendrickson acknowledged the slower pace of sales-tax revenue for the city but also said some retail activity in the city has picked up, citing a busy Pilot truck stop off Interstate 5 at Exit 93.

Retail sales generated by gasoline stations in Tumwater jumped 19.3 percent to $2.36 million from $1.98 million, the second-quarter data show.

Hendrickson said that the city's preliminary 2009 budget does not call for any city staff reductions.

Other local governments have not been so lucky. Olympia and Thurston County officials have proposed layoffs because of a drop in tax revenue.

Meanwhile, Lacey and Yelm continue to benefit from growth and new retail stores.

Although the Department of Revenue is prohibited from identifying specific stores, retail sales in Lacey generated by "sporting goods" soared 246 percent to $16.2 million from $4.68 million. Clothing and clothing accessory retail sales also jumped more than 220 percent in the second quarter.

The outdoors store Cabela's and department store Kohl's opened in Lacey last fall.

Grocery Outlet co-owner Russ Noski, who operates discount stores in Olympia and Lacey, said sales at his nearly two-year-old Lacey store are up 20 percent over last year. At first, higher gasoline prices drove sales, and now it's the overall economy, Noski said.

"People are trying to stretch that food dollar a little bit further," he said.

In Yelm, the site of a new Wal-Mart, retail sales generated by general merchandise stores shot up 391 percent to $9.62 million from $1.95 million, according to the second-quarter data.

Rolf Boone covers business for The Olympian. He can be reached at 360-754-5403 or rboone@theolympian.com.