It was late morning last Thursday, a week before Christmas, and Arden Fair mall was bustling. That was just fine with Melissa Baker, a shopper from Granite Bay.
“When you see a mall that’s full, then you’re looking at an economy that’s doing better,” said Baker, who clutched a Macy’s bag as she perused a mall map mounted in one of the common areas.
Baker, a stay-at-home mom, said the mall scene in 2014 is far more bustling than what she witnessed in recent years. “People weren’t out shopping,” she said.
The end of the holiday shopping season finds Sacramento’s economy displaying more and more promise. Unemployment stands at 6.7 percent, and 905,900 Sacramentans hold payroll jobs, the highest total in nearly 61/2 years.
Never miss a local story.
But holiday cheer doesn’t equal a full recovery, and Arden Fair, in its 56th year in business, is as good a place as any to take stock of the region’s not-quite-robust economy.
The mall generated around $440 million in retail sales last year, according to sales tax figures released by the city of Sacramento. That was a considerable improvement over the $410 million generated in 2009, during the worst of the recession. But it was still well below the $490 million reached in 2007, just before the economy cratered.
This holiday season, retailers in the mall have been reporting sales gains of between 1 percent and 2 percent over last year “week in and week out” since November, said General Manager Tod Strain.
In other words, Arden Fair still has a ways to go to reach 2007-type numbers. “We aren’t there,” Strain said. “But we are solid. The merchants are healthy; sales are good.
“The pre-recession – we were full steam,” he added. “The economy was full steam; retail was full steam.”
The climb out of the recession has been a long one, and there have been times when steam was in short supply. Greater Sacramento still has about 28,000 fewer payroll jobs than it did before the recession started. At the current growth rate, it’s about a year away from recouping the jobs that disappeared when the real estate market collapsed. And the recovery remains sluggish compared to the Bay Area and other coastal regions.
Thanks to the damage caused by the real estate crash, Sacramento has been “one of the slowest-recovering regions,” said economist Jeff Michael of the University of the Pacific. “It’s been slower to enter the recovery; it’s still behind the state as a whole.”
Michael said, however, that the end of 2014 provides reasons for optimism. “We’ve been in a slow and steady recovery for a couple of years now,” said Michael, director of UOP’s Business Forecasting Center. “The last couple of months have been some of the best we’ve seen in a while.” The region has added more than 12,000 jobs in the past two months.
The improvement in Sacramento comes as the recovery picks up momentum elsewhere. Last week the EDD reported that employers across California added 90,100 jobs in November, the second-highest one-month gain in nearly a quarter century. And on Tuesday the federal government reported that the U.S. economy grew at a 5 percent annual rate during the third quarter, the best gain since 2005.
Even with sales picking up, memories of the recession remain fresh. Shoppers talked about working two or three jobs to make ends meet, and the tendency to stay conservative even as they see the business climate brightening.
Doug Buckmaster, a shopper from Woodland, said he believes the economy is improving but he would probably spend somewhat less on the holidays than he did last year. Buckmaster, who works as a security guard, said he has to watch his pennies as a single dad supporting three boys.
“I live on a budget; I live tight,” he said.
The region’s other giant shopping mall has made a swifter recovery. Sales hit a record at Westfield Galleria at Roseville in the fiscal year that ended last June, according to city sales tax data. The Roseville mall’s revenue hit about $430 million, about on par with Arden Fair. What’s striking is that the Galleria’s sales revenue has risen 40 percent since the trough in 2008-09.
The Galleria’s big leap doesn’t surprise Garrick Brown, a retailing analyst at Cassidy Turley commercial real estate in Sacramento. He said South Placer is generally a wealthier enclave and has bounced back more sharply than Sacramento. Unemployment was 5.9 percent last month in Placer County vs. 6.8 percent in Sacramento County.
Another reason for the disparity is the public sector, which has greater weight in Sacramento than in Placer and has been slower to recover from the recession.
Roseville “is less of a government town,” Michael said. “There’s been stronger growth in Placer County.” He added that even though home construction remains fairly slow in the region, it’s performing much better in the Placer suburbs than in Sacramento.
Arden Fair, owned by Sacramento’s Friedman family and managed by Santa Monica mall operator Macerich, isn’t just waiting for the economy to get better. The mall recently completed a minor face-lift that included the installation of an LED light board that wraps around the elevator in the middle of the center. Two smaller LED signs have been placed in the parking lot, flanking the main entrance from Arden Way. Two upscale restaurants have been added, Season 52 and Maggiano’s Little Italy.
Brown said the upgrades are to be expected. Although Brown said Arden Fair is benefiting from the near-total shutdown of Downtown Plaza, much of which has been torn down to make way for the new Kings arena, the Sacramento retail scene will get increasingly competitive in the next few years. The opening of the arena in 2016 will bring new stores to downtown, while Howard Hughes Corp. plans to open an outlet mall in Elk Grove at an undetermined date.
Bottom line, getting consumers to walk in the door is getting tougher even as the economy improves.
“We’re seeing more malls doing everything they can to lure customers in,” Brown said.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.