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Businesses need the support of consumers, the state to capture critical tourism dollars this summer. By Jon Hurst. Page
Capturing the consumer
RETAIL, TOURIST SECTORS GO HAND-IN-HAND IN DRIVING THE LOCAL ECONOMY
By Jon Hurst Retailers Association of Massachusetts
The sum mer season is here and with it comes the opportunity for businesses to boost sales from our resident consumers and tourists.
Unlike the last two years, government restrictions are gone. Yet, severe challenges still remain from damaging inflation, product deficiencies and staffing shortages.
It’s clear that consumers and tourists are returning to the region. Yet, how long they can continue to spend and contribute to local sales is uncertain, given their dollars simply aren’t going as far as they did even one year ago.
The retail sector across the Commonwealth employs over half a million residents. These workers operate out of approximately 70,000 locations small and large — from Main Street shops, cafes and fine dining establishments to larger businesses located in regional shopping and dining destinations.
Those sellers serve consumers, and those consumers represent 70 percent of the economy. Most of our consumers are local residents. But in many regions, it is the visitors who can make or break the profitability of the business community.
Tourism is an important part of the retail sector on the North Shore, as it is on Cape Cod and the islands, in Boston and throughout the Berkshires.
Likewise, the retail sector represents an important contributor to the entire tourism industry, as shopping and dining are consistently the most frequent activity of visitors.
Attractions and lodging are often viewed as the backbone of the tourism industry. But without robust local dining and shopping options, there will be fewer visitors and they will have less of an impact on our consumer-driven economy.
Like our local stores and restaurants, hotels, museums, arts venues and other attractions have been through a twoyear period like no other in memory.
From government-imposed shutdowns and severe restrictions, to messaging that dampened consumer spending and investment, small businesses serving tourists have been hit with lower sales, followed by increasing costs.
The consumer goods and services
sectors have recently seen double-digit percentage increases in payroll and benefit costs, shipping costs, inventory wholesale prices, utilities and other operational expenses. Every small business is facing the tough dilemma of how much of those higher costs they can pass on to their local customers and tourists, without dampening sales and profitability.
Consumers are starting to show signs of being tapped out due to higher gas, food and other costs, coupled with concerns with lower 401k values and higher interest rates. They’re losing confidence. Although family vacations will likely continue through the summer given pent-up demand from the pandemic, there are signs that consumers are buying down on goods as prices have increased and disposable income has dropped.
The Retailers Association of Massachusetts counts hundreds of members on the North Shore that rely on tourism to drive their local economies. In times when consumer confidence is rattled, travel distance is often curtailed. It becomes all the more important that marketing efforts are increased,
Courtesy photo
The Hawthorne Hotel in downtown Salem has welcomed guests to the region every summer for nearly a century. targeting both out-of-staters and our own local consumers. The state should invest in advertising efforts to promote destinations with unlimited shopping, dining and entertainment opportunities. In addition to working to woo conCAST_NSC22.pdf 1 3/10/22 12:16 PM sumers, the state should also make it a priority to put dollars back in the pockets of taxpayers — who are our most important consumers. Tax cuts would be a timely investment that would help both families and our consumer-serving small businesses.
This August, Massachusetts will celebrate our annual Sales Tax Holiday. The initiative generates hundreds of millions in local sales in exchange for a very small two-day sales tax suspension. We should promote this year’s event as an important investment in pushing back against inflation and giving tourists another reason to visit this summer.
Additional tax cuts — such as Gov. Charlie Baker’s comprehensive proposal that benefits taxpayers at all stages of their lives — would keep hundreds of millions of tax dollars in the pockets of our families. Those dollars can, in turn, be spent at small businesses and destinations across the state.
Now is the time to reinvest some of the billions of dollars of the state tax surpluses back in families and small businesses. Our elected leaders should show their support of tourism and Main Streets by allowing the state’s consumers to decide how best to spend their hardearned tax dollars for their families. I
Jon Hurst is president of the Retailers Association of Massachusetts.
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The hospitality industry is by far among the lowest-paying sectors on the North Shore. Here are employment and wage statistics for the North Shore by industry:
Employed Weekly Wage
Professional/Technical Services
8,127 $1,904
Manufacturing
14,993 $1,818
Educational Services
15,450 $1,193
Health Care/Social Assistance
34,257 $1,094
Hospitality 21,361 $544
Source: Massachusetts Executive Office of Labor and Workforce Development, Employment and Wage Data, June 2021
Jonathan Pellerin photos Chamber Board of Director member George Carey, owner of both Finz Seafood & Grill and Sea Level Oyster Bar in Salem, has said hiring staff remains one of his biggest challenges.
HOSPITALITY, FROM PAGE 7
decade of slowing and stagnating working-age population growth.
Fewer workers means that companies are competing for employees. The companies that offer the best compensation and work/life balance will have the greatest opportunity to employ the most sought-after employees.
The North Shore’s high-wage industries offer an average $1,500 weekly
pay. These companies are vying for workers alongside the hospitality industry, which pays an average $544 weekly wage.
POTENTIAL SOLUTIONS
How can we alleviate employment challenges now that there is increased competition for workers? We can look toward teens, retirees and immigrants to fill the gaps in the labor supply.
The North Shore labor force participation rate was 66.5 percent in 2019, which is the most recent data available from the U.S. Census Bureau.
Teens ages 16 to 19 accounted for 46 percent of that total, with mature workers making up 30 percent.
There appears to be an opportunity to encourage further labor-force participation from each group to fill industry staffing niches.
Another possible solution to the staffing shortage is increased immigration, which has stagnated in Massachusetts.
The number of legal permanent residents (green card holders) in Massachusetts was 340,000 in 2021. This number has remained the same for the past nine years, according to the Department of
Located on historic Pickering Wharf, the Salem Waterfront Hotel caters to a tourist and function crowd all summer long.
Homeland Security.
Developing strategies to restart the immigration pipeline to Massachusetts would help alleviate staffing shortages with ready-to-work laborers.
In the meantime, we will need to bring our patience with us when we dine out as the hospitality industry works toward getting fully staffed. How long we are ultimately kept waiting rests with us as we work together to create solutions to the staffing shortage. I
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