Ailing economy slows pulse of East Tennessee retailers

KNOXVILLE, Tenn. (WVLT) -- We're seeing it everywhere -- Goody's laying off 5 percent of its corporate workforce, Dillards closing its department store in Knoxville center, and Dawhares closing nine of its stores in Kentucky. But how much do those headlines reflect the bottom lines of most stores in our tightening economy?

There are a lot of ads out there from stores begging for our stimulus checks, but how big a booster shot will those checks be?

For businesses hardest hit, such as car dealers or home improvement stores, that check should shake some fence-sitters loose.

For everybody else, other factors come into play.

Mast General Store Manager Michael Johnson says, “There's a challenge of trying to get people to come back to the downtown area.”

From comfortable rockers, to barrels overflowing with candy, Mast General Store welcomes warmly.

But even at such a downtown showplace, Johnson says, “The economy definitely affects us. As a company our sales are down slightly last year. This year, they're starting to bounce back a little bit.”

Were but the picture as bright at other stores.

Dr. Bill Fox with UT’s Center for Business and Economic Research says, “One thing we do have is sales tax collection data.”

Crunching those numbers, feels more like a vice.

Roane County had a better winter and early spring this year compared to last, but Knox County sales taxes shrunk.

Statewide, April was Tennessee's worst in 47 years.

Dr. Fox says, “What retailers are hoping is that retailers are getting
those tax rebates will go out and spend them.”

UT's Center for Business and Economic Research figures Uncle Sam's stimulus checks will put about two and a quarter billion new dollars into Tennessee. But if the last stimulus checks were a clue, only about half the spending will be new, “...and the other half pays bills, particularly pays down the credit card bill a little bit,” according to Dr. Fox.

Garrett Wagley with the Knoxville Chamber of Commerce says, “Not only do our retailers not so much depends on the stimulus, but the economy here is generally a little bit better than everybody else’s.”

Translation: the Knoxville' Chamber’s Garrett Wagley says, technology and government jobs spell more stability.

Johnson figures service and TLC will be key to giving Mast General's niche offerings mass appeal.

Johnson says, “We feel you're really probably a year or two away before you really start seeing it take off like it could.”

Part of that is figuring out your market, and getting your market to figure you out.

One note about those sales taxes: Those awful April numbers, which Gov. Bredesen quoted right before cutting the budge by half a billion dollars, reflect the tax-free weekend the last of the month. May's numbers aren't in for Tennessee yet, but across the country retail sales numbers are up slightly for some big-boxers, and some of it is credited to spending from those first stimulus checks.


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