Are we in a retail bubble?

Mila Koumpilova, The Forum
Published Thursday, October 09, 2008

This year, Russ Salmon has behaved unexpectedly for a manager at a construction materials company: He bought a new vehicle and a trailer. He put some money away into savings. He made plans to splurge a little this holiday season – and to expand his branch next year.

The Fargo general manager of Allied Building Products, Salmon says his company’s branches on the East and West coasts are hurting in the wake of the housing market collapse. But things are looking up at his branch, and unlike consumers across the country, he hasn’t curtailed his spending: “If anything, we might have spent a little more this year.”

Nationwide, September marked an alarming downturn in consumer spending, with retailers from luxury goods stores to discount chains reporting dismal performances. But based on input from area retailers and preliminary information from North Dakota’s Tax Commissioner’s Office, Fargo-Moorhead consumers haven’t cut back in the face of bleak economic news.

“We’re very lucky, and we’re very grateful consumers are spending carefully but continuing to spend here,” said David Martin, Chamber of Commerce of Fargo Moorhead president. “Our members feel here in the Red River Valley things are going pretty well, and they’re breathing a sigh of relief.” At Fargo’s West Acres Shopping Center, CEO Brad Schlossman said id sales went up in September compared to last year. “Back to school was strong, and that’s compared to strong back-to-school sales last year,” he said. “The economic news in the past two weeks could not have been worse, yet we’re doing OK.”