Beacon Hill must help local retailers
Have you noticed a dark storefront on your Main Street lately? Perhaps it’s more like a half dozen. Or that, if replacements come, they tend to be second-hand stores, nail salons, and service providers instead of traditional retailers?
There are many reasons for all that, but the overarching one is that costs are rising far faster than sales. Payroll, health insurance, and rent are all going up at a rate far greater than inflation, yet sales for many are at best flat or up by just the rate of inflation.
Competition is more intense than ever against online sellers, with mobile commerce accelerating far faster than anyone ever imagined. Mobile commerce is the shopping preference for cost-conscious millennials. Too many of those online sellers don’t collect the state sales tax, giving them a government granted 6.25 percent price advantage right at the start. Their payrolls are slim, because they often operate out of warehouses manned by robots.
Too often, online sellers reap a competitive advantage under antiquated and unevenly applied laws that hurt the local store vis-a-vis the online companies. Our sales tax is the prime example there; it has long been a government-imposed disadvantage for Main Street merchants in Massachusetts versus online and New Hampshire competitors. It was bad enough a decade ago when consumers needed to drive north — or have a computer with high speed internet to shop tax free from a handful of sellers. Today online shopping is fast and easy, with unlimited options, something that can be accomplished with just a few clicks of the smartphone.
Another government-imposed disadvantage real stores face versus online sellers and merchants in other states is our antiquated blue laws. Massachusetts is one of only two states in the nation with premium pay requirements for retailers, forcing stores to pay time and a half hourly pay on 52 Sundays and six holidays, while merchants in 48 states and online have no such government-imposed cost anchor around their necks.
In fact, retailers in Massachusetts pay an average of $4,800 per employee per year more than every other state except Rhode Island due entirely to the blue laws. It is impossible to be competitive on price with that state-imposed burden.
This year, Beacon Hill had the opportunity to even the playing field on these issues, and to give local stores a fighting chance, but they walked away from the necessary reforms. A sales tax holiday, which had become a reasonably regular occurrence, was not passed. Such a sales-tax-free weekend would have given local stores some relief, with two summer days to lure tax-sensitive customers back from sellers and competitors who enjoy 365 days a year of tax-free sales. But our policymakers didn’t view that as a priority.
Nor did they reform the blue laws so local stores would be able to operate just like any other industry in the Commonwealth — and just like retailers across the nation — by paying newly hired employees straight time on Sundays moving forward.
They didn’t view it as a priority.
Yet to add insult to injury, they did pass legislation to make it clear that locally based internet seller-fulfillment centers are exempt from the blue laws, and thus are able to operate 365 days a year without any premium-pay requirements.
Allowing the big internet competition to keep selling without sales tax collections and letting them escape antiquated labor-law requirements that bind brick-and-mortar Main Street businesses are two stark examples of state government picking winners and losers. Unfortunately, the losers are real local stores, their employees, and their communities.
So the next time you see that vacant storefront, take a picture of it and share it on social media with your legislators. Tell them it is time that government officials made it a priority to promote, protect, and preserve our Main Streets, rather than driving our consumer dollars out of state.
Jon Hurst is president of the Retailers Association of Massachusetts. Harold Tubman is president of Circle Furniture.