Flat sales equals a good year.
That sums up the mood of retailers in Wichita going into 2010, a mood that's far more cautious than national projections of modest retail growth this year.
In a year when national economists are forecasting 2.5 percent retail growth, Wichita retailers say they'd be thrilled if 2010 just stops the bleeding from last year. Any sales gains would be gravy.
"If you didn't lose your shirt last year, then we're all jumping for joy," said Kelsey Metzinger, who runs Bungalow 26, a boutique in Delano.
"Kind of sad, but it's true. If sales were flat this year from last, that would be a good thing."
That's the outlook across the service sector as Wichita battles aviation job losses, said Jeremy Hill, director of Wichita State's Center for Economic Development and Business Research.
The city's middle class, with a high per capita income fueled by economic expansion in the mid-2000s, has been hit hard by the crash, Hill said.
"I really don't see our retail situation improving," Hill said. "Flat is going to be pretty good."
National outlook: Growth
The national retail outlook is beginning to brighten, National Retail Federation chief economist Rosalind Wells said this week.
NRF is forecasting a 2.5 percent growth in retail sales, up from last year's 2.5 percent decline.
"In 2010, the retail environment will remain challenging, but the improving economy will result in positive sales gain," Wells said. "Household wealth has begun to recoup its losses, but frugal consumers continue to seek out value."
Wells said she expects discounters and warehouse clubs to continue prospering in 2010, and luxury retailers are experiencing better demand for their merchandise.
Still, automotive sales were down 12.6 percent, with housing-related retailers, building materials and furniture suffering double-digit declines.
Nonetheless, the recession ended in mid-2009 and the national economy has turned the corner, Wells said.
"We expect the economy to keep expanding at a moderate rate this year of 2.5 to 3 percent," she said. "Consumer spending, a sign of overall economic growth, will continue to expand by 2 to 2.5 percent.
"The employment picture is still poor, but the size of monthly job losses is dimming. As the labor market improves, so will consumer income."
Later improvement?
Wichitans are pessimistic about any immediate improvement in the local labor market.
"Not a lot of people in our industry feel like they're seeing the sunlight," said Jon Rolph, executive vice president of Sasnak Management, which runs Carlos O'Kelly's and Applebee's restaurants.
"So we're trying to deliver a consistent customer experience and reinvesting in ourselves."
Metzinger and Lacey Vess, a co-owner of Uptown Paws in Tallgrass, say they think the Wichita economy will perk up later this year.
"Retail-wise, everyone says we're a year behind the recovery," Metzinger said. "While I feel that could be true, I don't think we were hit nearly as hard, and I don't think it'll be the whole year. Hopefully the third and fourth quarters, things will start coming around."
Vess said her pet shop business has tailed off in January, like many retailers.
But spring — dog-walking season — is annually a boon, she said.
"We're feeling pretty optimistic," she said.
There's reason for that optimism nationally, Wells said: The housing market has turned the corner, giving lift to economic growth and consumer confidence.
And consumer price inflation should remain low, with the Federal Reserve expected to keep rates low.
Print edition: 


