Mass. retail group sees surge in members going out of business
Sales tax collections trended upward, and employers added thousands of new jobs each month, making the state economy look fairly strong in 2015.
But the Retailers Association of Massachusetts said it saw a 34-percent surge in members who dropped out of the organization because they went out of business.
The statistic was particularly noteworthy because the number of closure-related dropouts held steady from 2011 through 2014, in the 130 range annually, before rising to 174 last year, said Jon Hurst, the association’s president.
“We were taken aback by it,” said Hurst, whose statewide group has roughly 3,500 members, most of them mom-and-pop shops and other small businesses, including restaurants. “It’s a little scary. I’m kind of concerned that there’s a real profitability issue. Too many of them are going out of business, and new entrepreneurs aren’t coming in to replace them.”
Hurst’s group plans to include the data in a report it will issue by May to lobby the Legislature and reinforce the group’s position that retailers here are at a competitive disadvantage, both to online rivals and to those just over the state line in New Hampshire.
The retailers association continues to push a bill that would eliminate Massachusetts’ time-and-a-half pay requirement for workers on Sundays and holidays, a requirement that Hurst said is shared by only one other state, Rhode Island.
To Hurst, the increase in dropouts due to closures is a harbinger of gloomy times to come for his industry. Hurst said the group’s members are under assault from online competitors that don’t have the same cost structures or regulations. He places the blame for the rise in closures on that competition, as well as on high labor and energy costs and double-digit percentage increases in health insurance premiums: “All of these things are piling on.”