Sniper fallout: empty pumps, quick errands

The serial killings in the Washington metro area are now having a regional economic impact that is virtually unprecedented.

While some past high-profile crimes have sowed fear among local residents and would-be tourists, rarely has consumer behavior been affected as much by a spate of random killings.

Residents in one of the most affluent and generally safe regions of the country are bunkering down, avoiding trips to the mall, and buying their gasoline far outside the region. To economists, this shift of billions of dollars in buying power is an indication of how edgy the nation remains after 9/11.

"It suggests that if there is any other terrorist attack of any significance, the consequences would cause us to pull back and stop spending as aggressively and do the things we normally do," says Mark Zandi, chief economist at The Economy.com.

While it's too soon to measure the actual affect on the region's economy, anecdotal evidence hints at the shooting's impact.

The $5.95 Vietnamese noodle soup at the Pho Nam restaurant is a local legend, and diners often queue up to slurp the spicy broth. But on a recent weekday night, empty seats abound. "People are afraid to go out," says a waitress.

Just a few stores away, Raj Dalal is running a big sale at his Maytag home-appliance center. Despite signs trying to entice people in, he isn't seeing many customers. "People run in from the parking lot fast and then just go," he says. "They don't ask too many questions and they don't buy."

Local officials believe any economic analysis is speculative at this point. In fact, the Montgomery County Executive, Douglas Duncan, says the county is only focussing on the sniper attacks.

"If we have to do things after that to help the community and help the economy, we're going to do that," says Mr. Duncan.

If the shooter is caught soon, some of these losses will be made up. Trips to the furniture store or Home Depot have only been postponed for now. But a continuation of the shootings as the holiday season begins could hurt one of the more vibrant retail areas of the country. "The longer this drags on, the more costs will mount," says Mr. Zandi.

Some areas of the metro Washington economy may not recapture lost sales at all. For example, groups canceling trips to Washington probably won't reschedule them, causing real loss to hotel and motel operators. "This is one of the largest tourism sectors in the country," says Anirban Basu, an expert on the region and a professor of economics at Towson University in Maryland.

The impact of the shootings, however, is rippling well beyond where the attacks have taken place. This is the time of year when Maryland farmers count on school trips to let children collect pumpkins, pet goats, and make scarecrows.

"The farmers make more on these tours in October than almost anything else," says Tony Evans, a spokesman for the Maryland Department of Agriculture. "I know of one farm that bought $5,000 worth of pumpkins and now has to give them away."

One of the few "winners" in the local economy are full-service gas stations, where the lines are often several cars deep. The self-service lanes are usually eerily empty.

Yet even some gas stations in the area, particularly along I-95, are losing business. Last weekend, there were lines of motorists tanking up at the last gas station before heading across the Delaware Memorial Bridge towards Washington.

Retailers report that consumers seem to be changing their buying patterns. "People seem to be consolidating their errands, perhaps going to stores like Wal-Mart where they can buy everything they need in one trip," says Mr. Basu.

One of the largest grocery chains in the region, Giant Food, Inc., says it too is noticing a shift in shopping habits. Consumers are buying more prepared foods from the meat and deli sections so they don't have to stand in line at restaurants. And to cut down on trips to the store, they are buying bulk sizes. "Our home-delivery service, Pea Pod, has seen a pick-up in sales," says Barry Scher, a Giant Food vice president.

Nor is it just businesses that are feeling the sting of the sniper attacks. County governments are watching their budgets soar as they face hundreds of hours of police overtime, leasing of helicopters, and payment for every call that is made to 1-800-tip lines.

"I would imagine the extra cost is in the millions of dollars," says John Cohen, president of PSComm in Rockville, Md., and a former law-enforcement official. "The expenses are going to be just incredible."