November 24, 2024
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Car deals boost state’s retail sales

BANGOR – Maine’s auto industry experienced one of its biggest percentage sales gains ever in October as consumers, motivated by zero percent financing, purchased 33 percent more cars than during the same month last year.

It was a boost the industry – and the state – needed after an already bad retail sales year grew worse in the weeks after the Sept. 11 terrorist attacks. Overall, consumer sales were up by 9 percent in October and appeared to be staying that way, according to final numbers just released by the Maine Revenue Services.

At the Bangor Mall, manager Bruce Soper said Monday that retail sales between Thanksgiving and Monday were up 9.1 percent over the same period last year. At least 10 percent more people shopped at the mall last weekend than the same weekend last year, and figures indicate consumers are spending more time shopping than they did during the 2000 holiday season.

“We’re doing banner business,” Soper said Monday. “Merchants are happy because they are selling.”

If the state’s revenue figures for November and December are as good, it certainly would give businesses worried about the recession a ray of hope going into next year.

Even with the banner month, auto sales for the year ending Oct. 31 are up only 3 percent. Overall, consumer sales during that time were up 1 percent – 4 percent off the target of a 5 percent gain the state likes to realize each year.

“I think it’s pretty clear,” said Jerry Stanhope, a financial analyst with Maine Revenue Services. “I think we’ve got a weak economy.”

Even though Maine’s numbers are not stellar, they seem to be bucking the national trend. The recession took hold in Maine, but not to the extent it did in other areas of the country, said Janet Waldron, commissioner of the state Department of Administrative and Financial Services. Some states are experiencing shortfalls of 10 percent or more, she said.

“Even when you adjust out for auto sales, we’re still ahead,” Waldron said. “That’s a good signal, a powerful signal. We certainly appear to be affected less than other locations.”

“We’re thumbing our nose at the rest of the country,” Soper said. “There are malls that are experiencing those [10 percent] decreases.”

At Quirk Auto Park, the zero percent financing offers from the manufacturers were beneficial not only to buyers but to the dealers as well, owner Jack Quirk Jr. said. Dealerships were able to clear their 2001 models earlier this year compared to last year, and now they can order more 2002 models to replace them.

The deals – which some manufacturers still are pushing – are bringing in buyers at a time when most people normally wouldn’t be thinking about buying a car, Quirk said.

“Typically, this time of year things slow down because we’re competing with Santa Claus,” he said. “And actually the warm weather hurts us. We don’t sell as many trucks or snowplows.”

While not anticipating a repeat of the impressive October sales numbers, officials with Maine Revenue Services are concerned about auto sales remaining strong in coming months, Stanhope said.

“Our concern going forward is … are we just buying this from future months,” he said.

Quirk said that is something he also thinks about, but his concern isn’t as great as that of the state. He said that even if there were no special financing offers, interest rates are low and people will continue to be in the market for a new car. Some buyers, he said, may be waiting as long as they can before taking out a car loan. Eventually, they’ll be in the market.

“I don’t think things will slow down,” Quirk said. “I look for things to continue. But we’ll keep our fingers crossed.”

Another sales sector that experienced phenomenal growth in October was building supplies, which includes all materials for building and renovations. According to state figures, sales were up 23 percent, which, like auto sales, was one of the biggest gains the industry has ever experienced.

Nick Jennings, manager of Granville Lumber in Hampden, said he disagrees with that figure.

“It seems to be out of whack with the number of building permits that were issued,” Jennings said. “That’s an alarming increase to have in any segment of the economy.”

Waldron also said she couldn’t explain why building supply sales were so high. It’s better, she said, to look at a three-month running total of sales instead of just one month because some businesses may have filed two months’ worth of tax reports in October.

“That’s certainly an anomaly,” Waldron said of the 23 percent increase.

In the last three months, building supply sales have been up 6 percent over the same period last year, and 3 percent in the 12 months up to Oct. 31.

“That would make sense,” Jennings said. “I don’t get the 23 percent.”

Like the auto sector, Jennings said he expects building supply sales to continue to grow but not at the extraordinary double-digit gains listed in the state’s October sales figures.

“There’s never been a better time in 40 years to do a building project,” Jennings said. “If anyone’s ever had an inkling to build or do a renovation, this is an unprecedented good time in the economy to get that done.”

One sector that saw a decline in business was the restaurant and lodging industry. In October, sales were down 8 percent, and in September they were down 1 percent.

Vaughn Stinson, director of the Maine Tourism Association, said that throughout the summer tourist season, businesses were experiencing a slowdown in sales because of the national recession. The terrorist attacks on Sept. 11 slowed sales even more.

But, he said, the state now is getting more inquiries and advanced bookings from tourists for next year’s season. The number of calls coming in are greater than those received this time last year, he said.

“People still will take vacations,” he said.

Correction: A story on retail sales in Tuesday’s edition incorrectly listed the name of the owner of Granville Lumber in Holden. He is Ned Jennings.

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