What’s the Economic Difference Between Doubled- and Single-faced Signs?

When a Pier 1 Imports store opened in Germantown, TN (a suburb of Memphis) in 1991, it was granted a permit for a sign that faced west-bound traffic. However, no signage was visible to east-bound traffic. A few months after the store’s opening, sales were 25% below projections, despite typical promotions, advertising and direct mailings.

Pier 1 subsequently surveyed 200 shoppers, through a market-research firm, about having a second sign. The responses were the following.

Are the signs
helpful to you?

Does the sign affect
aesthetics negatively?

Does the sign
increase public safety?

Is the sign more of a public benefit
or a public nuisance?

Expert appraisal determined that the gross annual income for the store would be $1.2 million with the second sign, and $1,020,000 without it. Store officials stated that overhead and the cost of merchandise being sold was $1,020,000 so, without the second sign, the store would generate no profit.

As for the community itself, Pier 1 estimated that, without the second sign, it would pay, city, county and state taxes of $76,080. With the second sign and increased sales, it would pay $104,229. Thus the tax-revenue difference for the town would be $28,000.  Presented with this evidence, Germantown officials readily granted a variance for the second sign. The full story about this variance appeared in the April 1992 issue of Signs of the Times magazine.

Wade Swormstedt

Wade Swormstedt

Wade is Executive Director of the Foundation for the Advancement of the Sign Industry. Formerly he was Editor and Publisher of Signs of the Times magazine.

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