Anxious local retailers see upcoming sales tax holiday as recovery barometer

Posted on Aug 05, 2009 by David DeWitte.

Famous Footwear store manager Courtney Kiefer of Cedar Rapids restocks shoes at the First Avenue NE store on Tuesday, Aug. 4, 2009, in Cedar Rapids. All shoes under $100 except for cleats will be exempt from sales tax during tax free weekend, which starts Friday. (Liz Martin/The Gazette)

Iowa’s sales tax holiday on Friday and Saturday will be watched closely by the state’s retailers for signs that cautious consumers are coming out of their shells.

Barry Donovan, JCPenney store manager at Westdale Mall in Cedar Rapids, said the tax holiday will provide one of the first insights into how consumers will behave during the upcoming holiday season.

“I believe it will be a much bigger weekend this year than last,” Donovan said.

He cited the economy and the floods for last year’s poor showing.

JCPenney will be open longer hours and offer multiple sales to entice consumers to take advantage of the exemption from sales tax on designated items.

Heavier staffing and special promotions also are on tap at Famous Footwear, 4100 First Ave. NE in Cedar Rapids.

“Normally, it is a big, big weekend for us,” store manager Courtney Kiefer said. “Last year, it was not, because of the flood. So we’re really not sure what to expect.

“Families come in and get larger quantities of everything, because it’s such a good deal.”

The passage of a 1-cent local-option sales tax in Linn County in the past year means that shoppers will save 7 cents on the dollar, instead of 6 cents.

The recession isn’t a concern for Kurt Griebel, Target store team leader at Coral Ridge Mall in Coralville.

“Obviously, we’re in a unique situation here in the Iowa City area,” Griebel said. “We’ve got back to school, we’ve got back to college at the University of Iowa and we’ve got the sales tax holiday. It’s kind of a trifecta we’re dealing with.”

Griebel said a challenge will be having enough cashiers to avoid long checkout lines.

At Tanger Outlet Center in Williamsburg, several stores said they are braced for heavy traffic.

“This pretty much makes the month for us,” said Ricardo Damion, a supervisor at the VF Outlet store, where extra staffing will be called in. Damion said the store is a popular destination for the tax-free weekend for its selection of jeans.

At Irwin’s Clothing, 1180 Seventh Ave. in Marion, the annual Ridiculous Days sidewalk sale will be helping with the summer merchandise clearance this weekend.

“I think the sales tax holiday adds a little bit to that,” owner Lee Larson said.

Larson said sales have held up pretty well throughout the recession because men are putting more emphasis on a professional appearance to distinguish them from their competition, helping the sales of suits, neckties and finer clothing.

Marion didn’t experience much flooding, and Larson said the 2008 sales tax holiday was a pretty good one for Irwin’s.
Iowa Department of Revenue spokeswoman Renee Mulvey said the tax holiday will operate the same this year as last.

But she said some confusion persists each year. For example, many Iowans mistakenly believe the holiday continues into Sunday because of the term “tax-free weekend.” It does not.
Parents continue to wonder why the holiday — intended to make back-to-school items more affordable — doesn’t cover such common school items as backpacks, computers and school supplies.

Mulvey said she doesn’t know the answer; it’s just the way the law was written.