Hanging on for a retail rebound
No part of Aspen’s economy has been under the microscope more than retail sales, and with good reason – sales have been on a slow, steady decline for six years.
Sales were up nearly 7.5 percent in June, a jump that many merchants credited to the fact that the Jazz Aspen Snowmass festival was actually held in Aspen in June.
But for the year to date through June, sales were still down 1.5 percent from the first half of 2002. And 2002 was nothing to write home about.
Records kept by the city of Aspen finance department show that year-to-date sales through June this year were at their lowest level since 1996.
Through June, total taxable sales in the city were $185.29 million. Even during 2002 – when the brunt of the post-September 11 trauma was felt – sales were $188.07 million more than the same period. A record amount of $207.18 million was collected in 2000.
Mike Taets, president of Wells Fargo Bank in Aspen, said he finds it particularly disturbing that there are now signs the patience is wearing thin even for national and international chains. Many chains established shops here just to make sure they had a presence at an exclusive address.
“The last 13 years I thought we were in a retail Disneyland,” said Taets. “The last 12 months we’ve seen we aren’t retail Disneyland.”
It’s been popular to blame the ills of the downtown core, where several storefronts are vacant, on greedy landlords who charge outlandish rents, but Taets cautioned against making them the scapegoat. Many are leveraged to the point where they charge the rent they must to make payments on property they have acquired, he said.
He also discounted the idea of prohibiting real estate companies and other businesses that don’t collect sales tax revenues from ground-floor spots. Doing so, he predicted, will just create more empty spaces.
So what can pull Aspen’s retail sector out of its funk? Special events may be one answer. Many Aspenites observed that town has felt as busy as ever in recent weekends thanks to visitors flocking in for events like an arts and antiques show.
“Right now town looks very busy,” said Howie Mallory, executive vice president of Community Banks of Colorado. “It should be.”
Sales figures for July won’t be available until later this month. The city finance department’s report shows that through June, tourist accommodations in Aspen were still down nearly 3 percent from the prior year with sales of $54.14 million. Clothing stores were off 4.6 percent while sports equipment and clothing stores saw sales sag by 4 percent.
General retail and specialty retail shops, which make up the bulk of the commercial core, were down 16 and 4.5 percent respectively through June.
Bright spots thus far in the year are restaurants and bars, whose sales were up 2.2 percent through June, and food and drug stores, up 6.7 percent.
While the year isn’t great, Mallory’s impression is that many stores are getting by and holding on for better days. “I think the better-run businesses are OK,” he said.
Rick Jones, chairman of the Aspen Chamber Resort Association’s board of directors, said half the merchants say throw more special events and business will be fine. Others disagree.
“For every two questions in Aspen you get three answers,” he said.
He personally believes Aspen must try to pull in more people who want to shop in a variety of stores. Aspen, like many other resorts, isn’t attracting the numbers of tourists necessary to support a healthy tourism-based economy, he said.
Jones said he would rather draw 1,000 people who would buy a $10 T-shirt rather than one person who would buy a $10,000 painting. He views tourists as a renewable resource – “they come to town, spend money and they leave.” Therefore, he’d like to see more of them.
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