Skip to comments.Kentucky retailers see no economic improvement in 2012
Posted on 10/25/2012 7:38:28 AM PDT by Republican Wildcat
FRANKFORT, Ky. (Oct. 24, 2012) The results of this years Kentucky Retail Federation economic survey of membership are in and show that an overwhelming majority 79 percent of KRF members believe their business wont be financially better off this year than in 2011. Thats a 3-percent increase over last years survey results.
This is clearly the most important question and reflects that Kentucky retailers arent optimistic about what this year means to them, said Laura Leigh Goins, vice president of communications and member relations. We hear a great deal about sales figures, but without considering the cost of doing business you arent getting a complete picture.
This is the third year that the federation has asked a random sampling of its 6,000 members to participate in the survey. The seven-question survey, mailed to Kentucky retailers in early September, includes questions about the economys impact on their business, employment and workforce, as well as sales projections.
Since one in four Kentucky jobs and nearly a fifth of all labor income comes from retail, our members see everyday how average Kentuckians are faring in this economy, Goins added. With an estimated 51,331 retail establishments across the state, retail is the canary in the economic mine. Theyre local, next door to Kentucky families and make their living by serving their neighbors.
This years survey also asked members if they have seen an increase in the price of goods. According to results, 98 percent have and over 50 percent have passed along up to half of the cost as an increase to consumers.
You have to expect that when the cost of doing business increases significantly, a business is forced to pass along some or all of that cost to consumers, Goins added. I think the most startling thing were seeing is that over a third are not able to pass along any of the increases theyve seen. Instead they are absorbing the costs and that makes for a very tight bottom line.
When asked what has had the biggest impact on their ability to grow their business, Kentucky retailers overwhelmingly cited taxes, followed by unemployment and credit markets.
While there are many changes that could be made to the tax code to help spur the economy, were hearing our members focus on how many online sales are exempt from the state sales tax, Goins said. This issue, sales tax fairness, is before Congress now and could go far in leveling the playing field for Kentucky retailers.
When it comes to sales projections for this year, 54 percent of respondents stated they believed their annual sales figures would decrease compared to 2011. That compares to 51 percent from last years survey and echoes the 54 percent who foresaw a decrease in 2010. Only 16 percent believe that their year-over-year sales will increase. When asked why, retailers cited unemployment as the No. 1 reason, with consumer confidence a close second.
Only 5 percent of members report creating full-time positions, with 9 percent stating theyve created one or more part-time positions. Thats down from 8.5 percent and 13 percent respectively from the 2011 survey.
The Kentucky Retail Federation has represented retailers of all types and sizes since 1939. Kentuckys retail industry employs 380,000 Kentuckians and pays more than $9.3 billion in wages annually. Kentucky retailers collect more than $2.8 billion in state sales tax and pay millions in other taxes to state and local governments.
Full article: http://www.lanereport.com/13766/2012/10/kentucky-retailers-survey/
The retailers are indeed facing a harsh market. People just do not have much to spend, and paying off debts is still the major preoccupation.
This will not change until the labor market picks up. Whenever that may be.