Despite signs of nervousness on the national retail front, Spokane-area merchants are optimistic that holiday-season sales here will improve over last year's sales, which they say were hampered more by the weather than the recession.

Todd Davis, president of Spokane-based Spokandy Inc., says he's expecting that the chocolatier will have a good holiday season. Spokandy already has begun increasing production of holiday candy for its two retail stores here and in Coeur d'Alene, making the items with the longest shelf life first, Davis says.

Sales at Spokandy's retail outlets plummeted just before Christmas last year, because people couldn't get to the stores through the heavy snow accumulations in late December.

"We had to make substantial discounts in January," he says. "So far, I feel positive that sales this season will be stronger than last year."

The company plans to add three to five temporary employees at each of its stores to work the height of the holiday shopping season, he says. The retail stores usually each have three permanent employees. Most temporary employees will be college students who have worked holiday seasons for the company before, he says.

Davis says Spokandy closed two retail outlets this year, to focus on the growing wholesale side of its business, but expects that retail sales will improve over last year at the two remaining retail stores. The company also has new products that Davis says he expects will boost sales, including dessert toppings, three hot cocoa mixes, chocolate coffee, and a line of Mary Lou's ice cream.

Spokandy wasn't alone in holiday sales declines last year.

"The worst snow season ever impacted us more than the economy," says Rich Hadley, president and CEO of Greater Spokane Incorporated. "I can't imagine another winter like last year."

Taxable retail sales in the city of Spokane totaled $1.02 billion in the fourth quarter of 2008, down 3.4 percent from the year-earlier period, the Washington state Department of Revenue says. Countywide, sales totaled $1.86 billion in the 2008 fourth quarter, down 7.5 percent from the year-earlier period. Statewide, taxable retail sales were down 10.8 percent.

Taxable sales here more recently have continued to fall, although again not as steeply as in most other cities and counties in the state, Hadley says. The state reported earlier this month that taxable retail sales in the city of Spokane during the second quarter of this year totaled $947.6 million, down 5.5 percent from the year-earlier period, and countywide sales totaled $1.73 billion, down 9 percent from a year earlier.

Statewide, though, retail sales were down 14 percent in the second quarter, compared with the year-earlier quarter.

On the national level, the holiday shopping outlook isn't exactly cheery. The Consumer Confidence Index dipped in September, indicating consumers might not be in a mood to spend this holiday season, and the Wall Street Journal reported last month that the holiday job market looks bleak.

With recent national reports that the economy is showing signs of starting a slow rebound, however, Hadley says he's sensing growing optimism among consumers and the retail community here, because the Inland Northwest economy hasn't been hit as hard by the recession as other regions of the country have.

"The Pacific Northwest has done better than many regions, and Spokane has done better than most of the state and the metro areas we compare ourselves to," Hadley says.

That gives people here more cause for optimism, Hadley says, adding, "When people are optimistic, they are more likely to shop."

Pre-holiday employment here also hasn't been hit as hard in some neighboring counties, Hadley says.

"We don't have 13 percent unemployment like counties north of us," he says.

September jobs in the Spokane metropolitan area totaled 204,700, down 15,100 from the September 2008 level, the Washington state Employment Security Department says. Unemployment here was 8.4 percent in September, up from 5 percent in the year-earlier month.

Some of the decline in employment is attributable to the fact that people come to Spokane looking for work that they can't find in surrounding communities, Hadley says.

Stephen Pohl, general manager of the River Park Square shopping mall downtown, says he hasn't heard any estimates concerning the amount of holiday hiring merchants there will be doing, but adds, "I see a number of signs in windows asking for holiday help."

Pohl says he expects sales volume at the mall will be higher than last year.

"I'm cautiously optimistic that our season is going to be fine," Pohl says. "I think we will see a minimum of 1 percent to 2 percent increase in sales uptick from last year."

He says he expects that new tenants, including Spokane retailers Polka Dot Pottery and aNeMonE Handmade Paper Flowers, will help draw new traffic to the mall. While the mall has had some tenant turnover, occupancy has remained steady and currently is about 96 percent, Pohl says.

Highly anticipated holiday movie openings at the AMC Theaters River Park Square 20 cinema complex there also will draw traffic to the mall, he predicts.

Massoud Emami, a partner at the Anderson & Emami upscale men's clothing store there, says he's seen customer traffic increase since mid-August, and he expects that to continue through December.

Emami says the store, which normally has a staff of 12, has added two employees in anticipation of the holiday season. "We hope to keep them as time goes by," he says.

Most employees will work extended hours during the holiday shopping season, he says.

Emami says he doesn't want to see a repeat of last year's snow accumulation downtown, but says some snow is good for business.

"I would love a little bit of snow to give it that Christmas feeling," he says.

While some large retailers have announced they plan to discount products aggressively, Emami says he's not worried that will draw away Anderson & Emami's customers.

"Discounts are nothing new, and it's a whole different philosophy of doing business," he says.

If discounts draw people to the mall, though, they will bring more traffic—and potentially more customers—past the clothing store, Emami says.

Murray Huppin, president of Spokane-based Huppin's Hi-Fi Photo & Video Inc., predicts consumers are going to purchase as many gifts as they bought in previous years, although they might not be willing to spend as much.

"Shoppers will be looking for deals," Huppin says.

Hot-selling items this year likely will be televisions, especially those with screens in the 32-inch range, he says.

Blu-ray disc players also should sell well, because many of the units have come down in price, Huppin says. Digital cameras have been big sellers for several years now, he adds.

Huppin's usually doesn't hire temporary holiday workers, Huppin says. "We run a full crew, and people here will get extra hours," he says.

Huppin says the downtown store, which closed due to snow a couple of days last year, is ready for snow this year.

"We've got a truck with a snow blade this year, so I'm sure it's not going to snow, now," he jokes.