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Kentucky retail sector remains somber

KRF issues responses from fall membership survey

LEXINGTON, Ky. (Nov. 18, 2013) — The mood of Kentucky’s independent retailers regarding the financial condition of their businesses continues to be somber. According to the Kentucky Retail Federation’s latest fall economic survey results, nearly 72 percent of respondents believe their businesses are in either the same or worse financial shape than at the same time in 2012. Only 24 percent responded that their business was in better shape financially.

cashier“Going into this year’s holiday shopping season with many retailers cautious about the long term profitability and viability of their businesses is concerning to say the least,” said Tod Griffin, president of the Kentucky Retail Federation. “We’re still not seeing much movement in the economy that would indicate a full recovery in the independent retail sector anytime soon.”

When compared to the Federation’s spring economic survey, year-to-date sales projections haven’t improved. Forty percent of respondents projected this spring that their year-to-date sales would decrease compared to 51 percent of respondents this fall who report an actual decrease in sales.

Healthcare costs continue to be the number one factor hindering retail business growth. Tax policies and government regulations were also top concerns on retailers’ ability to grow their business. Consumer confidence also was mentioned by many.

“Planning for healthcare reform implementation has been one of the biggest business concerns this year and probably the one we hear most from employers,” Griffin said. “There are simply too many unknowns at this point and employers are hesitant to make significant investments in their business until they can figure out how the costs of the new healthcare law will affect their bottom line.”

Job creation in Kentucky’s retail sector labor force remains stagnant. Fifty-two percent of survey respondents reported their full-time employees remained the same. Fifteen percent of survey respondents said they had eliminated positions with another 13 percent reducing hours for full-time employees. Only eight percent of retailers reported creation of new full-time positions this fall. The part-time workforce approximated the full-time workforce numbers with 50 percent reporting no change, 17 percent eliminating positions and 10 percent reducing hours.

“Washington politics is not helping the economy,” said Griffin. “Business owners are not willing to make investments in communities and create jobs with too much unfinished business in Congress right now. Our elected leaders must come together and create some stability in government policy before store owners will be confident again about their retail businesses.”