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Feeling the Pinch: Businesses see mixed 2016 sales

Posted 1/18/17

Cathy Parker, Consigning Women owner, left, with Abby, and employee Sonya Hill double check the necklace displays on the store counter at the Sun City resale shop.

By Rusty Bradshaw

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Feeling the Pinch: Businesses see mixed 2016 sales

Cathy Parker, Consigning Women owner, left, with Abby, and employee Sonya Hill double check the necklace displays on the store counter at the Sun City resale shop.

Above average temperatures in the summer and the closure of Bell Road for overpass construction dealt some, but not all, Northwest Valley businesses a losing hand in sales.

Sales were somewhat down compared to 2015 figures, and while there are other factors, some business owners believe the weather and construction were the biggest factors.

“In the eight years I have been open, we had the worst summer ever,” said Cathy Parker, Sun City’s Consigning Women owner.

Bell Road was closed throughout the summer to accommodate construction of a bridge over Grand Avenue. The roadway reopened Nov. 22. During construction, there were detours, but they took drivers blocks away from their normal route along Bell Road.

Ms. Parker said she could point to that as a major factor because a large portion of her regular customers come from west of Grand Avenue.

“I heard the same thing from the other shops in our shopping center (Bell Camino on the northwest corner of Bell Road and Del Webb Boulevard),” she said.

Not all businesses saw a drop in sales. Eugene Gentile, My Daddy’s Bakery & Cafe owner in Surprise, said he expected to see decreased sales in 2016.

“It has been a surprisingly good year for business, even with the slowdown because of the ADOT bridge project at Grand Avenue,” he said.

Bob Riddle at Bob’s Variety Store in Sun City West saw a 10 percent increase in sales for 2016.

“My sales took a real hit in 2008, but each year we have been getting better,” he said.

Part of this year’s increase came because he expanded the store, adding 3,500 square feet and rearranging things inside to provide custmers an easier shopping atmosphere, Mr. Riddle explained. The store also added a fabric shop.

Ms. Parker also said online shopping is also a factor in storefront businesses seeing a drop in sales. That is a nationwide trend, according to information on the website www.franchisehelp.com.

“The increasing strength of online sales is a major driver in the retail industry,” according to a statement on the site. “Retailers that have only online sales or an efficient physical and online sales process can keep overhead costs low and are poised to continue to gain.”

Ms. Parker does have a website for her store, www.consigningwomenaz.com, although there are no direct online sales available. However, she is taking advantage of the social media aspect of sales.

“We have pictures of what we have available on the website and our Facebook page,” she explained. “We have a big Facebook following.”

Mr. Riddle does not have a store website, but said it was on his bucket list. However, he is uncertain whether it will include an online sales options.

“When you have online sales you get a variety of problems, like shipping stuff and it not arriving, things being the wrong size or missing parts,” he said.

In the brick-and-mortar stores, mobile payment options are becoming increasingly important to younger shoppers, as are in-store mobile devices such as mounted iPads helping consumers find what they’re looking for, according to the Franchisehelp site.

With the return of winter vistors, Northwest Valley businesses are seeing sales pick up.

“But it is still a bit lower than last year,” Ms. Parker said.

However, she is seeing more new customers and consigners coming into the shop because of expanded advertising. Ms. Parker said she is also seeing more younger customers in her store.

Mr. Riddle believes businesses will have some difficult times ahead as they adjust to the new minimum wage, now $10 per hour after Arizona voters approved Proposition 206 in the November general election.

“It would have been easier to take if it had been in smaller increments,” he said.

Simply raising prices is not an options for some businesses, he added.

“I have to be careful that I don’t price myself out of business,” Mr. Riddle said.

A smaller sales increased statewide compared to 2015 was expected this year, according to projections by Arizona’s Economy of the Economic and Business Research Center, part of the University of Arizona’s Eller College of Management. Projected sales for 2015 were expected to increase by 4.7 percent, while 2016 predictions forecast only a 2.8 percent sales increase. Arizona’s Economy researchers predict 4.7 percent sales increases in 2017 and 2018, a 5.3 percent jump in 2019 and a slight drop to a 5 percent increase in 2020.

According to the Arizona Department of Revenue annual report for the 2015-16 fiscal year, retail sales jumped 6.2 percent over 2014-15 fiscal year transaction privilege use tax collections in retail sales. The overall increase of all categories was 3.9 percent.

Arizona DOR officials did not respond by press time to phone and email requests for sale figures through the first quarter of the 2016-17 fiscal year.

Smaller retail stores are now shying away from deep inventories with a broad selection of products and are instead focusing on a narrower spread of specialty items, according to information on the Franchisehelp website.

“Since shoppers can access such a wide swath of products online, retailers are finding strength in focus,” the site stated. “Above all, retailers are focusing on a frictionless shopping experience — whether it’s ordering online and picking up in store, easy payment options, a top-notch customer service experience or any number of other strategies.”