Some local chain stores did OK despite economy

SANDUSKY The year 2009 was a bad one for retailers and restaurant owners, but not everyone felt the
Tom Jackson
May 24, 2010

SANDUSKY

The year 2009 was a bad one for retailers and restaurant owners, but not everyone felt the same amount of pain.

In fact, for some stores last year was pretty good, particularly for companies that stressed value in the midst of hard times, according to public financial data released by companies that have a retail outlet in Erie County.

It wasn't a good year, admittedly, for the Damon's Grill chain, which has a restaurant in a striking location along the Sandusky shore, overlooking Sandusky Bay. The chain filed for bankruptcy Oct. 28 last year.

The local Damon's is owned by the company, not a local franchiser. Officials at the company didn't return calls asking for comment, but Pittsburgh business owner Gary Reinert Sr., who bought Damon's International and the Max and Erma's Restaurant chain in 2008 only to file for bankruptcy for both last year, told Business First Columbus a few weeks ago the two chains are "headed in the right direction."

An article released on Jan. 8 by Morningstar, an independent investment analysis company, says casual dining chains generally have struggled during the recession. Many customers traded down to cheaper restaurants or switched to going to the grocery store.

Sales taxes in Erie County fell 7.8 percent in 2009, according to figures presented this month to the Erie County commissioners.

There's a three-month delay between when sales are rung up at local cash registers and when the tax money is sent back to the counties, so those numbers don't give a complete picture. Sales taxes for October, November and December haven't been posted yet.

Still, the figures show retail sales were up a little in July and September 2009 in Erie County, but were down sharply in January, February, March, April, May, June and August.

December retail sales across the United States were mediocre, the Department of Commerce said Thursday.

On one hand, sales were up 5.4 percent from December 2008, but down 0.3 percent from November 2009, the report says.

Retail outlets that emphasize value tended to do well last year.

Kohl's, which has a local outlet on Milan Road and describes itself as a "family-focused, value-oriented specialty department store," enjoyed a merry Christmas. The company reported Jan. 7 that the five-week period ending Jan. 2 saw a 8.8 percent jump in total sales over the like period a year ago. Comparable store sales were up 4.7 percent, the chain said.

Target reported the same day that its five-week sales for the same period were up 5 percent, with comparable store sales up 1.8 percent.

"December comparable-store sales were much better than expected, as stronger-than-anticipated guest traffic throughout the month drove sales growth in a broad array of merchandise categories, including apparel, electronics, food, and health and beauty," said Target's CEO, Gregg Steinhafel.

Wal-Mart had not issued any financial news releases for 2010 by press time last week, but reported Nov. 12 third quarter net sales worldwide were up 1.1 percent from 2008, and up 3.8 percent when currency fluctuations were taken into account.

Meijer, a discount chain that targets much of the same customers as its Milan Road rivals, is privately held. A company spokesman didn't return a phone call last week.

The Borders bookstore chain hopes to turn the page on last year's results.

The chain gave local bookworms a reason to venture out when it opened a new store at Sandusky Mall in November 2007. The store currently employs 37 people.

Borders Group hasn't released its December sales results yet. It released third-quarter results on Nov. 24, reporting that it lost $39 million, compared to a loss of $39 million in the comparable period of 2008. Total sales were down 12.7 percent. The stock price traded at $1.43 Thursday. It traded as high as $16.62 in October 2007.

Mary Davis, a spokeswoman for Borders, said last week she can't comment on how the Sandusky store is doing.

"We can never guarantee the long-term future of any of our stores," she said.

The downturn in the economy in general and construction in particular hasn't been good for home improvement stores.

Lowe's reported its third quarter sales in 2009 fell 3 percent. Home Depot third quarter sales in 2009 were down 8 percent.

"There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization," said Frank Blake, Home Depot's CEO.