Mass. Retailers See Holiday Sales Rising This Season
By Katie Lannan
STATE HOUSE NEWS SERVICE
BOSTON -- Massachusetts retailers are optimistic about sales growth this holiday season, but sounding a cautionary note on expected profits as stores face increased operating costs.
The Retailers Association of Massachusetts on Thursday predicted a 3.8 percent gain in retail sales over the 2017 holiday period, a projected increase that falls below the National Retail Federation’s expected 4.3 percent to 4.8 percent bump across the country.
RAM President Jon Hurst said consumer confidence levels remain at an 18-year high, driven by economic growth, low unemployment and inflation, and rising wages.
“Massachusetts retailers are prepared for the 2018 holiday sales season, and they are optimistic that positive sales trends for the year to date will continue, albeit with tighter margins and profitability due to higher operating costs,” he said in a statement. “The calendar is very favorable with five full weekends between Thanksgiving and Christmas, including a long weekend leading into the holiday. The confidence level of consumers remains at 18 year high levels, and prices remain in check due to their unlimited purchasing options given the power of mobile commerce.”
The retailers group plans to publicly announce the holiday projections at its 100th anniversary celebration Thursday afternoon at the Omni Parker House.
Using the leverage of a potential ballot question to lower the state’s 6.25 percent sales tax, the association was one of the key players in a law passed this year that gradually hikes the minimum wage to an hourly $15, establishes and paid family and medical leave program, and enables retailers to gradually move away from paying workers more to work on Sundays. The law, known on Beacon Hill as the grand bargain, kept the sales tax at its current level and made permanent an annual sales tax holiday weekend.
On Jan. 1, the law’s first required minimum wage increase kicks in, rising from $11 to $12, and the first of five cuts in Sunday premium pay takes effect.
RAM members expect higher payroll costs this year because of tight labor markets and competition to attract seasonal employees, according to Hurst, who said the retailers also expect “comparable” levels of seasonal hiring.
The holiday sales season historically represents an average 20 percent of annual retail sales, and November and December retail sales in Massachusetts will total approximately $18 billion, according to RAM.
This year’s projected 3.8 percent increase would come after a 3 percent increase last year. Sales dropped by 1 percent in the 2016 holiday season.
Actual sales increases have been stronger than the one anticipated this year three times since the three consecutive annual declines of the Great Recession: 4.7 percent in 2015, 5 percent in 2011 and 7 percent in 2010.
The association plans to encourage consumers to shop at local stores through its social media campaign, #BuyInMA.