The eighth annual Georgia sales tax holiday was a mixed shopping bag for retailers struggling through the recession.
Shoes were a hot seller over the weekend, followed by premium denim -- meaning expensive, brand name jeans, merchants said.
Some models of computers -- always the big star given the tax exemption up to $1,500 -- sold out at a metro area Best Buy. Jewelry sold well even though it wasn’t among the exempt items. But adult clothing, by some reports, didn’t fare as well during the holiday, which is meant to cut parents’ back-to-school expenses and help retailers spur sales.
If results from the latest holiday appeared mixed, so do prospects for its return next year.
John Heavener, president of the Georgia Retail Association, fears state legislators may think twice about the back-to-school exemption at a time of significant sales tax declines and tight budgets. The tax-free holiday must be approved each year by the Georgia Legislature.
“There’s no guarantee with the way the economy is going this year that it will pass again next year,” said Heavener. “If people want it they may need to be more engaged with this.”
Ken Heaghney, Gov. Sonny Perdue’s chief economist, previously estimated the hit on state revenue from this year’s holiday at about $13 million on sales of about $330 million. But he made the estimate last fall, before the brunt of the economic downturn hit the state.
Year-to-date, net sales and use tax collections by the state are down 7.6 percent, according to Perdue spokesman Chris Schrimpf. Collections through June 2009 were $5.3 billion, a decline of $438.3 million from the year before.
Schrimpf said it’s a “wait and see proposition” on whether the governor will support a tax-free holiday next year.
An influential House member supports bringing it back in 2010.
“Absolutely,” said Rep. Ben Harbin, R-Evans, chairman of the House Appropriations committee. “It’s one of those things that spurs people to spend money that they may not otherwise spend. It goes directly to citizens and helps local businesses.”
Some were clearly helped last weekend. At Perimeter Mall on Saturday afternoon, there was a short line outside the Apple store. Sunday evening, the Best Buy at Edgewood Shopping Center still had people waiting to see salespeople.
A salesperson said the store could have sold more computers if they had more in stock. Retailers in general haven’t been carrying as much stock due to the sluggish economy.
Neither the state nor the Georgia Retail Association have a way to track results of the sales tax holiday.
But Heavener said he had heard from eight members -- mostly department stores -- that sales were better than expected.
The National Retail Federation predicted a 7.7 percent decline in back to school spending this year, Heavener’s members showed from a 4 percent drop to a 4 percent increase.
“If we have beaten that forecast, and I think we have by a healthy margin, I feel good about that,” said Heavener. He said particularly given metro Atlanta’s 10.7 percent unemployment rate, he expected a lot worse.
“Overall I would say customer traffic was down compared to the last several years for this period,” said Dennis Kemp, general manager of Perimeter Mall.
Still, he said stores with premium denim, like Lucky, guess and MetroPark, athletic shoes and American Eagle “fared very well this weekend.”
Michelle Batts, director of marketing and business development at Lenox Square mall, said traffic there was “pretty comparable, pretty steady” compared to last year’s sales tax holiday.
Shelley Korenbrot, director of mall marketing and business development for Gwinnett Place Mall, said the crowds were “similar in scope to the holiday shopping season.”
There is one more tax-free holiday this year, aimed at energy efficiency. From Oct. 1-4, energy and water efficient products up to $1,500 will be tax-exempt.
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