Ohio retail sales expected to rise 4.2%, Toledo 3.6%
COLUMBUS, OH (Toledo News Now) -Holiday retail sales in Ohio will increase by 4.2 percent over the same period last year, driven by higher consumer confidence and increased employment, according to a study prepared by the University of Cincinnati's Economics Center for the Ohio Council of Retail Merchants. In Toledo alone, sales will increase by 3.6 percent, which is slightly lower than the statewide average.
The study, commissioned by the council and its research arm Focus on Ohio's Future, anticipates taxable Ohio retail sales of $14.7 billion in November and December. This amounts to 19.8 percent of the total annual Ohio retail sales expected in 2012. While 4.2 percent is an encouraging forecast for the holiday season, this projection is lower than last year's 5.6 percent increase.
"Holiday sales are extremely important to our retail businesses in Ohio and are a good indicator of the state's economic health in general," explained Gordon Gough, executive vice president of the Ohio Council of Retail Merchants. "It is encouraging to see that consumers are spending again and our retail sales figures continue to increase over last year."
The study also projected holiday retail sales in Ohio's largest Metropolitan Statistical Areas:
Retail spending includes all retail sales except those by motor vehicle and parts dealers, gasoline stations, and non-store retailers, including catalog and Internet sales.
Jeff Rexhausen, associate director of research at the Economics Center, said increased consumer confidence, higher employment levels, a reduction in consumer debt and broader increases in U.S. retail in general will contribute to the anticipated increase for this year's holiday season.
However, Rexhausen noted several factors continue to limit retail spending growth.
"While consumer confidence is improving, there are a number of uncertain factors that could limit spending: gas prices, which make up a large part of discretionary incomes, remain volatile, and in addition, many consumers are wary of the impending fiscal cliff and the potential tax increases associated with it," Rexhausen said. "Also, the increased use of Internet retail websites has cut into the taxable retail sales total. This year alone, Ohio retailers will lose $167 million in holiday sales as a result of consumers choosing Internet retailers over brick and mortar stores, a figure which is up from $137 million in 2011."
Rexhausen cited an earlier report from the Economics Center that showed state and local governments losing as much as $200 million a year in tax receipts, Ohio retailers losing $600 million a year in sales, and 11,000 jobs could be added to the state's retail sector if taxes were collected on Internet sales.