Spokane-area retail sales outpace income—for now
-December 21st, 2017
Following the trend of recent years, retailers here are again predicting sales growth for 2018. However, with income growth for the region remaining low, some industry representatives and observers remain skeptical as to how long this period of gains will continue.
Grant Forsyth, chief economist for Spokane-based Avista Corp., says retail sales growth here in recent years has been stronger than expected due to an environment of low interest rates and increased job growth offsetting the area’s more modest income growth.
Although official Washington state Department of Revenue figures aren’t yet available, Forsyth says he estimates retail sales for Spokane County have grown by between 6 and 7 percent this year.
Looking ahead to 2018, he says retail sales likely will remain stronger than what would normally be expected in relation to income growth for the region, although he doesn’t expect that trend to last much longer.
“Personal income is expected to grow by 4 percent in the next few years, and based on historic norms, we’d expect retail sales to grow by about the same amount,” he says. “We’ve been seeing retail sales growth in excess of that due to the low interest rate environment, but as interest rates start to creep up, I’d expect taxable sales growth to begin to more closely mirror income growth for Spokane County.”
Bryn West, general manager of River Park Square mall downtown, says sales there are up this year by about 2 percent over last year.
“People are still looking to meet up with friends and have a social experience in addition to shopping, which is something you can’t buy online,” she says.
She says the mall also is looking forward to the opening of several downtown attractions that likely will add to shopping traffic in the coming year, including The M redevelopment and additions to nearby Riverfront Park.
“Ideally, 2018 would bring similar sales growth to this year, perhaps even a bit more, with added residential and retail options planned downtown,” she says.
Jason Moran, sales manager for Gus Johnson Ford, at 8300 E. Sprague in Spokane Valley, says vehicle sales this year saw similar increases to last year.
“There wasn’t much difference that I noticed, other than good sales months seemed a bit better and low sale months a bit worse,” he says. “Sales for new cars were up, while used cars seemed down a bit.”
Moran says the biggest factors bolstering new-car sales involve stronger incentives and a lack of newer used-model product availability.
He says he expects continued growth in new car sales, and perhaps an increase in used car sales as well in 2018.
For 2017, Spokane County adopted a budget that factored in $26 million in local retail sales tax revenue, which actually has increased by nearly 3 percent to what’s expected to be $26.8 million by the end of the year.
In 2018, the county estimates local retail sales tax revenue will increase by 5 percent to about $28.2 million.