Argus-Leader from Sioux Falls, South Dakota • Page 45

Argus Leader Section Personal finance 2 The Motley Fool The investment wizard gives advice on how to get your kids to start investing. 2D argusfeader.com Sioux Fans'! Web site Mutual funds 4-5 NYSE 6-7 ID Sunday Oct. 20, 2002 Business Editor: Jim Cheesman 331-2316 etition breeds business for Cosnp giant retailers The big boxes realize that if they congregate together, it strengthens the site and draws more consumers. Why wouldn't Wal-Mart want to be next to Wal-Mart, Target show they can be good neighbors BY MAUREEN MILFORO Gannett News Service PRINCETON, J. As soon as Wal-Mart Stores Inc.

said it was negotiating to open a store in the Brandywine Town Center near Wilmington, shoppers wondered if the nation's top retailer would hurt sales at the Target discount store already in the mall. But folks expecting to see just one retailer survive could be in for a surprise, judging by the experience of a shopping complex in Princeton, where Wal-Mart and Target have coexisted since 1998. To shoppers at the Nassau Park Pavilion in Princeton where a Target and Wal-Mart are within a few hundred yards of each other -shoppers and store managers see the clustering of such top "big box" retailers as normal as a highway intersection with four gas stations. In this instance, the Target opened three years after the Wal-Mart store. "Competition is good it breeds business," said Target shopper they could make or break the project's financing, Dyer said.

But now, most successful merchants realize a cluster of several strong retailers is better than having one store in an empty mall, said Brandon Famous, president of Fameco Real Estate in Con-shohocken, one of the country's largest retail brokerage firms. Target and Wal-Mart are neighbors in dozens of U.S. locations, including Princeton; Manchester, Bowie, and Lawrence, according to Brie Heath, See STORES, page7D Stephanie Dyer, a business historian at the University of California at Davis. "The big boxes realize thatiftheycongregatetogether.it strengthens the site and draws more consumers. Why wouldn't Wal-Mart want to be next to Target? I think if interesting that now people are worried about the fate of another chain and not the mom-and-pop store." During the early days of suburban shopping, when developers were trying to build a shopping mecca from scratch, department stores would attempt to control a center's retail mix.

Big stores wielded enormous power because Stephanie Dyer Business historian, University of California at Davis Gloria Frome of Hamilton Township, NJ. Indeed, experts say the notion that one big department store has to control a shopping mall for a competitive advantage is an outdated strategy left over from the suburbanization of the 1950s. "Increasingly, the idea of an anchor store is passe," said LODGENET'S CLIMB TO NO. 1 200 Annual revenue 71 Total rooms serviced 900,000 800,000 700,000 600,000 500,000 400,000 Iraq talk raises concern about U.S. oil supply Experts predict 'Certainly we have short-term a concern (about 939062 as of 3rd 100 I if million estimate fj I quarter I yy 7 300,000 1 1 1 1 1 1 1 1 0- I 0 L.

1L 1 i 100,000 1997 1998 1999 2000 2001 2002 Marty Itoo Bulls Argus Leader 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Sourct: LodgeNet Entertainment Corporation price spikes) but we won't know until a war occurs what will happen' L(KKBi; BTJ ton) IWMD Geoff Sundstrom AAA spokesman If- -Jta'' mmmK Var premium' BY ELLYN FERGUSON Gannett News Service WASHINGTON -Talk of a possible war with Iraq has some Americans picturing long lines at gasoline stations and home heating bill sticker-shock. Energy experts say consumers who flash back to the soaring prices and panic buying of the 1973 Middle East oil embargo are overreacting. What is likely, they say, is a short-term Var premium" on oil prices because of fear and speculation about a possible disruption of production. The market could follow a scenario similar to the brief price spike during the Persian Gulf War. World crude oil prices reached $40 a barrel three months before the start of the war in January 1991 but dropped to under $30 a barrel by Feb.

28 when the United States declared victory. But a repeat of that assumes a lot of things, such as a similarly quick war. Other scenarios a longer war, an Iraqi attack on Saudi Arabia's oil fields or ports, or increased terrorism directed at oil production make predicting what will happen to i prices at the pump nearly impossible. "In some ways, I'm reluctant to talk about it because there are so many variables," said Pietro Nivola, a trade and energy policy expert at the Brookings Institution. There are two key changes since the 1970s that should provide some buffer against the uncertainties of the world oil market.

First, the United States created the U.S. Strategic Petroleum Reserve in 1975 to provide oil for short-term emergencies. During the Persian Gulf War, the federal government took 21 million barrels from the reserve, which stores oil in underground salt caverns along the coast of Texas and Louisiana. See OIL, page 7D 11 PHOTOS BY VU. HOCPPNEII ARGUS LEADER Scott Petersen, president and CEO of LodgeNet, sits In front of a bank of televisions that are monitored for their signal at the company's headquarters.

Petersen says the company will start turning a profit by 2006. Consumers spending less on Halloween Digital system will help make profit by 2006 BY KELLY HILDEBRANDT Argus Leader Flickering neon signs advertising cable television at hotels used to litter American road sides. But technology-sawy hotels now offer everything from high-speed Internet access and Nintendo games to on-demand movies and digital music services. These days, HBO is a given as companies such as Sioux Falls-based LodgeNet Entertainment Corp. are racing to provide the world's hotels with the latest technology.

And LodgeNet is winning that race. This month, LodgeNet hit a milestone when it announced it serves more U.S. guest rooms than any company in the industry. LodgeNet has been the largest provider worldwide since 1995, but had been unable to overtake On Command Corp. its closest competitor in the U.S.

market-until this year. "It's been an interesting climb," said Scott Petersen, chief executive officer. "We've really tried to focus on providing the best products to our hotels and services to our customers." Still, after more than two decades in business, the company has yet to turn a profit Company officials expect to become net-cash-flow positive next year, meaning revenues will be greater than expenses. That will enable the company to start paying down its $333 million debt in 2004 and become profitable by 2006. And then there's the controversy regarding its adult content offerings.

Some community activists have pressured hotel chains to remove the programming. They also are asking the Justice Department to investigate both LodgeNet and On Command, claiming they offer pornographic content. "I would like for LodgeNet to get out of the pornographic business," said Phil Burress, president of Cincinnati-based Citizens for Community Values. Petersen said adult movies are dustry provider of networked in-room video games. 1997: First full-hotel deployment of a TV-based Internet service.

199S: First lodging industry provider of Nintendo 64 video games. 1989: First chainwide deployment of high-speed Internet access for guest rooms and meeting rooms. 2000: First 100 percent interactive guest pay room base. 2000: First Internet-enabled business application (account reviewcheckout with e-mail receipt). 2001: First digital video-content server for movies and short videos.

LodgeNet firsts Since It was founded In 1980 as Satellite Movie Company, LodgeNet has expanded its services and helped revolutionize the hotel entertainment industry. Here are some corporate milestones: 1SS3: First remote control for TV and interactive system combined. 19S9: First integrated TV design that incorporated the in-room terminal inside, the TV case, eliminating the set-top box. 1SSO: First around-the-clock, toll-free customer helpline TechConnection) in the entire lodging industry. 1994: First lodging in ii.ii.i- i I I JHBV-- TT I i "Adults' fascination with Halloween has helped transform the holiday into a much-needed sales boost for many retailers," says NRF President and CEO Tracy Mullin.

While fewer celebrating the holiday will decorate their homes (50 percent vs. 55 percent a year ago), sales of such Halloween merchandise as fake spiders, jack-o'-lanterns and witches remain second only to Christmas adornments. Last year, $586 million was spent on Halloween decorations. "Halloween has shifted from a one-night or one-weekend holiday into an autumn seasonal celebration, opening the promotional window for retailers through much of September and October," says Tom Hol-liday, president of the Retail Advertising and Marketing Association, a division of NRF. BY LORRIE GRANT Gannett News Service Spooked by the weak economy and safety fears, consumer spending on Halloween tricks and treats has slipped slightly this year.

Shoppers plan to spend $44 per household on candy, costumes and decorations, a dollar less than last year. Through last year, Halloween sales had increased steadily from about $2.5 billion in 1995, according to Reuters. The National Retail Federation (NRF), an industry trade association, estimates total spending of $6.9 billion this year. Candy will account for most of that, followed by costumes and home decor. Adult Halloween partygo-ers ages 18-34 are the big spenders.

They plan to shell out $67 on Halloween-related goods, $23 more than the average. Consumers with children plan to spend $62. concern. Established in 1980, LodgeNet went public in 1993.. The company first offered hotels simple premium cable service.

Now it offers on-demand LodgeNet technical supervisor Mike DeSmet prepares an Interactive headend rack for shipment to a Houston, Texas, hotel. The headend Is the brain of the Interactive cable service LodgeNet provides. LodgeNet employs 800 people, including 500 in Sioux Falls. LodgeNet now serves 930,000 hotel rooms worldwide. A report by USBancorp Piper Jaffray analysts Anthony Gikas and Mark Argento shows LodgeNet with 24 percent of the market and On Command with 23 percent See LODGENET, page 3D movies, Internet service, digital music and Nintendo games.

Located at 3900 W. Innovation St, only one of many services LodgeNet provides, and the company's shareholders have never expressed Data Bank This weekly snapshot of the region's economy is published each Sunday in the Argus Leader Economics 101 South Dakota i Building permits, home sales Taxable sales Unemployment --J agriculture WHEAT In dollars per bushel SIOUX FALLS HOME SALES CORN In dollars per bushel EZZ32.44 Eszr3 2.23 rrrrn 1.65 SIOUX FALLS trrsn 1 r- i Fin SIOUX FALLS SINGLE-FAMILY BUILDING PERMITS Sept. 2022 Sept. 2S31 172i IOWA CZTI 3.7 MINNESOTA SIOUX FALLS In millions of dollars "1270.1 Mi. 2C02 263.8 254.3 MINNEHAHA COUNTY j731 717 banks charge each other on overnight loans.

Both are benchmarks for other kinds of rates: Prime rate: Current: 4.75 October 2001: 5.5 Federal funds rate: Current: 1.75 October 2001: 2.0 MORTGAGES Average 30-year fixed-rate mortgage: National: This week: 6.01 Last week: 5.87 South Dakota: This week: 6.00 Last week: 5.89 GROSS DOMESTIC PRODUCT Growth in the total value of goods and services produced in the United States: 2nd quarter of 2002:1.1 4th quarter of 2001:5.0 2nd quarter of 2001: 1.6 INFLATION U.S. inflation measured by the Consumer Price Index over the past 12 months: September 2002: 2.6 August 2002: 1.8 September 2001:2.7 INTEREST Prime rate is what banks charge their most creditworthy commercial customers; funds rate is the interest that 177; 132 SOYBEAN RED MEAT In dollars per bushel SLAUGHTER i iiw-wj In millions of pounds 5 29 AUfl" mZ 83-1 282.8 Aug. 22C2 276.6 265.9 i 4.3 SOUTH DAKOTA "1 4-3 trrrzvi 2 6 tmiL-i 3 7 mrr 1 2.9 nation f-, 1 3.4 tri- 1 5.6 LTTil. 5.7 CHZLJ 50 SIOUX FALLS VALUE OF NONRESIDENTIAL PERMITS In millions of dollars 2CC2 Sept, 2301, II $30.5 86.9 2 SOUTH DAKOTA AUB.2C32 1.052.8 2131 U.S. Bureau of Labor Statistics; Sioux Falls Planning and Building Services Dept; Sioux Falls Board of Realtors; S.O.

Agricultural Statistics Service; S.D. Department of Revenue; U.S. Bureau of Economic Analysis; Freddie Mac Weekly Mortgage Market Survey, Bankrate.com.