Weak sales notwithstanding, operators of department stores in downtown Washington can take comfort from a report done recently for the Metropolitan Washington Council of Governments.
The report suggests that, had the current recession not occurred, sales at department stores in the central business district probably would have continued to stabilize after declining steadily for more than 20 years.
Although the study offers encouragement for operators of downtown department stores, it suggests that the boom in suburban shopping malls has slowed significantly. What that says about the regional market is unclear.
The study is based on sales information that was gathered along with other regional statistics to ascertain economic trends before and after the start of construction on Metro.
Downtown department store sales, which had been declining "significantly" prior to the opening of Metro, largely have stabilized since the second downtown leg of the rapid rail system opened in 1977, according to COG's Department of Community and Economic Resources.
COG researchers found that, by 1977, annual sales of downtown department stores, expressed in constant dollars, were only 59 percent of the 1971 level.
It should be noted that, in addition to the loss of retail sales to the suburbs, business downtown was affected by the closing of two department stores, Kann's and Lansburgh's. Sales data for more recent years are based on sales at downtown stores of Woodward & Lothrop Inc., The Hecht Co. and Sears, Roebuck & Co.
Although the COG study focuses only on department store sales, it probably is safe to assume that overall retail sales throughout the central business district have developed a similar trend.
Interestingly, regional department store sales have declined slightly in the post-Metro period despite the addition of two suburban shopping malls, the study concludes.
Although COG analysts are reluctant to say conclusively that Metro is reshaping shopping habits in the region, it is clear from the study that trends in department store sales have changed significantly since the system opened.
What's more, the study tends to support the contention of those who warned during the '70s that the population might not be able to support the spate of shopping malls that sprang up around the Capital Beltway.
As the city's population began declining in the 1950s, sales in the central business district also began to decrease. The rate of decline increased in the 1967-77 period as the population and buying power shifted to the suburbs, the COG study notes.
In fact, during the seven years prior to the opening of the first two Metrorail lines in 1977, annual sales at downtown department stores declined by an average of 6 percent. In the post-Metro period, however, the downtown share of the regional retail market remained constant at 6 percent despite the opening of Lakeforest Mall in upper Montgomery County and Fair Oaks Mall in Fairfax County.
In fact, annual sales of regional department stores declined by one-half of 1 percent, compared with a 0.4 percent increase before the coming of Metro.
Meanwhile, downtown department stores accounted for 10 percent of the combined pre-Metro sales during the five years succeeding the opening of rail system in the city.
What's more, department store sales in the central business district actually increased faster than in the region as a whole in 1979 -- after Metrorail service had been extended to suburban points -- when the area faced gasoline shortages and price increases.
The stabilization of department store sales in the downtown shopping district "would, perhaps, help to sustain or even reverse the total retail sales trend," say COG analysts. They see this as a plausible development because merchandise sold in those stores accounts for 18 percent of total retail sales in the downtown shopping area.
Oddly enough, while downtown department store sales are said to be stabilizing in an inflationary period, regional department store sales growth "has been hardly able to keep up with the inflation rate," the COG study concludes.
While the COG report may not be the definitive study of retail sales trends in metropolitan Washington, it might serve as a starting point for a reassessment of the market by retailers, developers and demographers.