Retail sales in Spokane had a sluggish start through the first half of the year ahead of what's expected to be flat or slightly higher revenue for the last two quarters of 2024 compared with prior-year sales, says Patrick Jones, executive director of Eastern Washington University's Institute for Public Policy and Economic Analysis.

Some retailers, however, are expecting improved sales activity in 2025 as a new administration gives hope for improved economic conditions and retailers find new ways to draw in shoppers, according to some market observers. 

Modest gains in household income and reduced federal stimulus spending have softened retail sales growth in the city of Spokane after a strong upswing in 2022, says Jones.

The most recent available retail sales figures from the Washington state Department of Revenue show Spokane County's taxable retail sales totaled $3.88 billion in Q2 2024, a decline of 0.3% compared with the year-earlier quarter.

First-quarter taxable retail sales data for the city of Spokane declined about 1.5%, compared to the first quarter of 2023, Jones says, adding that no growth is expected for second-quarter sales, which haven't been released yet.

"It's a little bit of a surprise that it's as weak as it has been," Jones says. "But it's important to remember that ... those federal dollars went away, and some analysts say a lot of the big-ticket items have been purchased."

Third-quarter sales figures for the city of Spokane are expected to be flat or decline, followed by a slight uptick projected for the fourth quarter based on Washington state trends, says Jones, who adds that a strong correlation exists between state retail and the city of Spokane's taxable retail sales. 

Projected tax revenue for Washington state has been adjusted downward and now is expected to leave the state with a $10 billion to $12 billion revenue shortfall through 2030.

Bryn West, vice president of leasing and operations at Cowles Real Estate, says retail sales growth for 2025 is slightly optimistic at River Park Square and is projected to grow by 2.2% despite state projections, federal policy changes regarding tariffs and immigration, and varied consumer behavior.

River Park Square currently has high retailer occupancy of 98% and retail sales appear promising for the 2024 holiday shopping season due to increased foot traffic, deals on merchandise, and more consumer experiences being offered by vendors compared to last year, she says.

In preparation for the 2024 holiday shopping season, which has been condensed by nearly a week compared with last year, retailers appear to be generally well-stocked with merchandise and have the needed workforce available.

Holiday events, including photos with Santa; Christmas Tree Elegance; and Terrain's winter art market Brrrzaar; strong movie releases; and postelection "revenge buying" are driving retail sales at the downtown Spokane shopping mall, West explains.

She expects in the new year to see retailers continue creating shopping experiences for consumers and incentivizing in-store shopping trips to help provide relief from the high cost of online returns. 

Across the Washington-Idaho border at Silver Lake Mall, in Coeur d'Alene, Brian Knoll, head of operations at Black Sheep Sporting Goods, says the mall is 100% occupied, which has helped attract shoppers this year.

Several new brands have joined the property over the last two years, and Knoll says the mall offers an "endless aisle experience," which is similar to online shopping in terms of selection. 

Retail sales at Black Sheep Sporting Goods this year have exceeded expectations and are on track for double-digit growth, says Knoll.

Knoll says he expects in 2025 to see some price reductions from merchandise suppliers that will be passed along as savings for shoppers. A strong economic outlook, along with the potential for reduced cost of living expenses, is giving hope for retail sales in the new year.

Black Sheep Sporting Goods also will focus on maintaining customer service and providing consumers with shopping experiences to encourage in-store sales.

"We want to give people a reason to put down the laptop and ... bring back the entertainment experience to brick-and-mortar retail," says Knoll.