Projections of retail sales growth here next year vary widely, but they likely won't be much better than flat, observers and government budgeters say.

The city of Spokane is budgeting for a 1.5 percent increase in sales-tax collections next year, while Spokane County is budgeting for a nearly 1 percent increase. The city of Spokane Valley, meanwhile, is budgeting for a 14 percent decrease.

Through the first nine months of 2009, the city of Spokane's sales-tax receipts were down 5.35 percent, or $1.4 million, from the year-earlier period, says city spokeswoman Marlene Feist.

"We're anticipating a small recovery in 2010 from the very low year of 2009," she says.

Stephen Pohl, general manager for River Park Square here, says, "The forecast for 2010 will rely heavily on what type of sales performance retailers turn in for this 2009 holiday season."

Pohl says customer traffic at the downtown mall is higher this holiday season than last.

"Our sense is 2010 will be flat during the first two quarters with incremental improvement thereafter," he says.

Nationally, federal statistics show that retail sales in November were up 1.3 percent higher than in October—which is more than double the increase economists had anticipated—and 1.9 percent higher than November 2008.

Randy Barcus, chief economist for Spokane-based Avista Corp., says he expects flat retail sales growth in 2010, and that the aggressive price discounting seen this year likely will continue in 2010. Barcus says he was surprised by the depth of discounting that it took to move products during the recession.

"It's going to be difficult for retailers to return to regular prices because customers have come to expect deep discounts as the norm," he says.

Barcus expects pricing to strengthen in 2011, along with demand.

"We could easily see double-digit retail sales growth in our region in the 2011 period and that should last for several years," he says. "As new-home construction rebounds after 2010 locally, the retail sales boost from appliance purchases, furniture, and other household furnishings will see a strong sector growth."

Barcus adds, "Overall, I see 2010 as the setup year for double-digit retail sales growth each year in the 2011-2015 timeframe."

Meanwhile, the hard-hit retail development and leasing sector here should improve in 2010, with more store openings compared with this year, says longtime developer and broker Marshall Clark, of Clark Pacific Real Estate Co., of Spokane.

"Leasing is going to be the name of the game," with far more leases than purchases of retail property, Clark says.

Still, he says, it's going to remain tough for investors to get commercial loans for building projects, and he adds that trend could be around for some time.