Vehicles, furniture dragging retail sales

Ghost of retail sales past and ghosts of economic changes in the present are combining to put the brakes on retail sales in northern Nevada.

The state's tax department reported last week that taxable sales in Washoe County during August were down a bit 0.1 percent while neighboring counties posted sharper declines. Sales in Carson City were down by 3.3 percent, Douglas County was down by 11 percent, Lyon County fell by nearly 18 percent and Churchill County was off by nearly 5 percent.

Two culprits relatively weak auto sales and the spreading effects of the slowdown in residential sales were cited by the county officials who keep close tabs on sales figures.

Vehicle sales figures suffered in comparison to 2005, when automakers rolled out aggressive promotional pricing such as employee discounts.

"A year ago, they were giving away cars," said Linda Ritter, city manager in Carson City.

Those promotions shifted some car purchases that were planned for 2006 into 2005 and sales at northern Nevada dealerships this summer were relatively slow.

In Washoe County, taxable sales of vehicles and related items fell by 17 percent in August compared with a month earlier. In Carson City, auto sales were down by 9.6 percent. (State tax officials caution that precise comparisons are impossible because of some recent changes in the way that tax categories are defined.)

This summer's weakness in vehicle sales worries officials in Carson City, which draws 45 percent of its budget from sales tax. Vehicle sales, Ritter said, account for about 40 percent of the sales tax revenues.

Troublesome as the 3.3 percent decline in overall sales in August might prove to the city government, Ritter said retail activity in Carson City would have been even weaker without the contributions of a Wal-Mart SuperCenter that opened this year.

"We anticipated that sales would slow down, but we didn't expect an actual decline," she said.

The widening effects of the housing slowdown, meanwhile, also became apparent in last week's report.

In fast-growing Lyon County, taxable sales of home furnishings a common purchase among home buyers in August were off by 33 percent from a year earlier. Douglas County furniture retailers reported a 58.3 percent decline. (Again, state officials note that the changing definition of categories affected the sales reports.)

In Washoe County, the decline in furniture sales was 50 percent year-over-year a figure that translates into $19 million less in furniture retailers' cash registers.

Taxable sales of building materials in Washoe County, meanwhile, fell by 16 percent during the month.

"We saw that coming," said John Sherman, director of finance for Washoe County. "The business cycle does exist, and we saw that we weren't going to get the double-digit growth we've seen the past couple of years."

Still, the county government which draws about 35 percent of its revenue from sales taxes is tracking the slowdown carefully to keep its expenditures in line with the declining flow of tax dollars.

While retailers aren't a primary component of the region's economy unlike manufacturing firms, for instance, that bring new dollars into Nevada from customers elsewhere in the world the retail sector added thousands of new jobs during its boom.

In September, the state estimated there were 26,000 retail jobs in Washoe County up by 4,600 from four years earlier.