Retail

Virginia: Two States, Two Economies, One Geography

Virginia is very much a border state, predominantly between the North and the South, and to a lesser extent between the East and Midwest. It is also a state very much in transition; a scant decade ago, it was a Republican stronghold, and now, it is fairly counted among the high-contest swing states. And this identity as a transitional state that is itself in transition paints an interesting portrait for Election Day.

By The Store Front Numbers

Virginia has trailed badly on most every metric seen in our universe, perhaps setting up for an emphatic statement from the primaries on Tuesday.

Looking at the top line, so to speak, the total performance came in at 2.4 percent through the second quarter year over year. With the least progress seen in establishments, Virginia was among the only states voting on Tuesday to have sub 1 percent growth.

That does not bode well for emergence of growth in other areas, which have also been relatively less than stellar, including overall employment and real wages. In the case of the latter, Virginia stood a full 100 basis points below the national average.

On The Ground

The problem is that numbers in VA can be misleading, as the northeastern and central areas (particularly around Richmond) have seen growth, real estate costs, living costs and incomes rise rapidly in the last decade or two. For example, the median income in Richmond these days is 65 percent higher than it was on Super Tuesday in 1996.

But when one moves away from the cities — with their massive employers (the federal government in NoVa’s case, Capital One and a handful of other big FinServ players in Richmond) and growing worker bases — the situation gets very different.

“We’ve just been seeing more and more people moving away, and obviously, we can only stay open so long without a regular base of customers,” said Samuel Sale of Sale’s Auto Repair in Botetourt, Virginia.

And, of course, in VA — as in the rest of the states — access to capital, particularly in an emergency, continued to be a persistent issue.

“We took some pretty serious damage during that surprise blizzard, and I wish there were a better way to fix my windows than not hire someone,” noted Dan Eigleman of Cyclic Living in Richmond. “But I can’t not open my shop, and so I can’t hold off on the window; I have to put it in and settle with my insurance company, or I’m going to be closed. Can’t afford to be closed.”

So, what did Virginia merchants most want going forward? A little relief mostly. The merchants all noted they expected headwinds as a cost of doing business, but the last few years have outstripped their abilities to be creatively pessimistic.

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