What’s the Economic Difference Between a Perpendicular Doubled-faced and Single-faced Sign?

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 west-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? 66% said “very helpful;” 31.5% said “somewhat helpful,” and 2.5% said “not at all helpful.”

Does the sign increase public safety? 93% said yes; 75 said no.

Does the sign affect aesthetics negatively? 91% said no; 5.5% said yes, and 2.5% had no opinion.

Is the sign more of a public benefit or a public nuisance? 90.5% said benefit; 5.5% said nuisance, and 4.5% had no opinion.

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.

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