January 9, 2017 By Jon Hurst
Despite seeing consumer confidence levels unmatched for the last 15 years, retail sales in Massachusetts dropped 1% among the 4000 members of the Retailers Association of Massachusetts this holiday season (Nov-Dec). The RAM survey exclusively measures small, locally based sellers, and does not reflect either national chains or online sellers. RAM had previously projected a 3.9% increase over the prior year. The disparity in the projection coupled with the strong consumer confidence levels raises the question whether consumers truly spent less this holiday season, or sent more of their dollars out of state to online sellers.
The slight reduction in sales breaks a string of 6 years of sales growth (’10-’15), which followed 3 years of sales reductions (’07-’09). Although national figures will not be released until the end of this week, some national measures indicate another double digit increase for internet sales this holiday season, with as much as 18% of all purchases for gift giving going online. The last minute shoppers this year may have also felt more confident in online shipping performance reliability than in prior years.
The concern for local stores is the fact that sales for most may be flat or down, yet costs are up—in some cases significantly. From unfair application of the sales tax, to state mandated labor costs, rising health insurance premiums, commercial property taxes, and rents, the trends are truly troubling.