Consumers are in a position to spend given the growing national economy, according to National Retail Federation (NRF) CEO Matthew Shay. The same is true in Northwest Arkansas as the four largest cities reported a 9.42% increase in sales tax revenue in the July report.
The cities of Bentonville, Fayetteville, Rogers and Springdale cumulatively reported sales tax revenue of $6.561 million, the strongest July on record for the region coming off a growth year in 2018.
Each city collects at least 2 cents of local tax over the state sales tax rate of goods and services. This report reflects 1% of the local tax which part of the cities’ annual operating budgets. Taxes reported in July reflect sales in May, created a two-month lag in the data.
Bentonville reported the highest July results with sales tax revenue rising 41.47% over a year ago. The city reported sales tax revenue of $1.535 million, up from $1.084 million a year ago. The bulk of the regional increase in July was from Bentonville’s bounty. Rogers posted revenue of $1.711 million, up 2.71% compared with $1.666 million a year ago. The city is 62.5% of the way to its annual budget of $18,400 with five months remaining in 2019. City officials project sales tax growth of 6.97% this year.
Springdale reported July sales tax revenue of $1.388 million, up 2.97% from a year ago. Springdale’s sales tax revenue has mostly been up this year, with June being the only month with a decline. Fayetteville had a record July with sales tax revenue of $1.925 million, up 1.57% from a year ago.
Retailers around the region are gearing up for back-to-school shoppers who are expected to dole out an average of $696.70 per family this year. That’s up 1.73% from a year ago. Families spending for back-to-college will fork over an average of $976.78 this year, up from $942.17 a year ago, according to the NRF’s annual estimates.
NRF officials said with fewer families surveyed saying they have children in grades K-12, spending is expected to total $26.2 billion, down from last year’s $27.5 billion. Total spending for K-12 schools and college combined is projected to reach $80.7 billion, down from last year’s $82.8 billion, largely because of the decreased number of households with children in elementary through high school.
According to the NRF survey, clothing and accessories will top K-12 families’ expenses at an average of $239.82, followed by electronics such as computers, calculators and phones ($203.44), shoes ($135.96) and supplies such as notebooks, pencils, backpacks and lunch boxes ($117.49). K-12 families plan to do most of their shopping at department stores (53%), discount stores (50%), online (49%), clothing stores (45%) and office supply stores (31%).
Among K-12 shoppers, teens are expected to spend an average of $36.71 of their own money, up from $30.88 10 years ago, while pre-teens should spend $26.40, up from $11.94 10 years ago, the survey noted.
“Members of Generation Z are clearly becoming more involved with back-to-school purchasing decisions rather than leaving the choices up to mom and dad,” Shay said. “Over the years, both teens and pre-teens are spending more of their own money on back-to-school items.”
College shoppers plan to spend the most on electronics ($234.69), followed by clothing and accessories ($148.54), dorm and apartment furnishings ($120.19) and food items ($98.72). They plan to do most of their shopping online (45%), followed by department stores (39%), discount stores (36%), college bookstores (32%) and office supply stores (29%).
“College shoppers are really showing their school spirit when it comes to buying collegiate gear this year,” Shay said. Spending on college-branded items is expected to average $62.22, up 17% from last year.
For online purchases, 90% of K-12 and 85% of college shoppers plan to take advantage of free shipping. The survey found 89% of both K-12 and college shoppers still had half or more of their purchases left to complete. Of those, 49% were waiting for the best deals for items on their lists.
Some shoppers wait for the tax-free weekend in their states. For Arkansas, the tax-free weekend for back-to-school is slated for August 3-4, according to the Arkansas Department of Finance Authority. The state said all retailers are required to participate and may not charge tax on items that legally tax-exempt during the Sales Tax Holiday. A complete list of eligible items can be found on the state’s website at this link.