Buying recovery
st1\:*{behavior:url(#ieooui) }
/* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-ascii- mso-ascii-theme- mso-fareast- mso-fareast-theme- mso-hansi- mso-hansi-theme- mso-bidi- mso-bidi-theme-}
Despite an increasing number of “for-lease” signs in storefronts, sales tax revenue is up and boulevards are lined with plywood and Tyvek these days amid a mini retail building boom in municipal centers and along busy roads like Route 25 in the eastern part of the county.
The new construction is perhaps surprising, given consumers”™ reduced spending power amid high energy prices and difficulties obtaining home equity loans in the mortgage crisis ”“ not to mention stagnant population growth in Fairfield County and Connecticut.
For the time being, however, Connecticut shoppers still appear to be wielding their wallets. Sales-tax collections were up 5.5 percent in the first half of 2009 compared with the same period a year earlier, according to preliminary estimates by the Connecticut Department of Revenue Services. Also up were taxes on subcategories of consumer goods tracked by DRS such as tobacco, alcohol, cable TV and tourism fees.
Major new shopping centers continue to win approval, including New Milford zoning officials”™ OK of the 280,000-square-foot Litchfield Crossings center, where Target Corp. plans to anchor a store. In an effort to spur development of workers, the Connecticut Retail Merchants Association and the National Retail Federation opened a training facility last year in Milford.
Vacancies at neighborhood shopping centers nationally reached a 13-year high, however, according to Reis Inc., a New York City market research firm that studies retail property trends. The average vacancy rate in strip malls hit 8.2 percent, up from 7.3 percent in June 2007.
Upscale regional malls also saw their vacancy rate worsen from 5.6 percent to 6.3 percent in June, Reis said, the highest rate since 2002.
The vacancy rates are contrasted by retailers nationwide posting surprisingly strong numbers in June that include a 4.3 percent jump of an industry index maintained by the New York City-based International Council of Shopping Centers (ICSC), which said it was the best year-over-year increase in more than 12 months.
Those estimates were vouchsafed locally last month by the Federal Reserve Bank of New York, whose territory includes Fairfield County. In ongoing surveys of retailers, the Fed found retailers had mixed results in April and May but sales on average were running close to plan, with New York City performing particularly well.
ISCS and other analysts attributed the relatively strong performance of retailers to federal tax rebate checks of up to $1,200. New York City also appears to be benefiting from European tourists flush with strong Euros.
“Strip out tax rebates and shoppers are in pretty bad shape,” said Frank Badillo, an economist with TNS Retail Forward, in assessing the latest figures.
As the boomerang effect of the rebate checks fade, retailers are steeling for another blow, after the Connecticut General Assembly overrode Gov. M. Jodi Rell”™s June veto of a bill to increase the state”™s minimum wage ”“ often paid to bottom-tier store employees ”“ from $7.65 to $8 as of January 2009, and to $8.35 in 2010.