2008 UPDATED: 8:33 am CDT October 9, 2008 DES MOINES, Iowa — Iowa retailers are still seeing small increases in spending, but an uncertain Christmas shopping season is just around the corner. The Iowa Department of Revenue reports sales tax receipts grew by 1.7 percent last quarter. That’s smaller than most years, but bigger than most surrounding states. The next three months of the year, however, are usually the most important for retailers.
Holiday shoppers bring businesses big profits most years. “I think if you’re a retailer, you’re nervous,” said Drake University finance professor Tom Root. “Right now I think the average consumer is concerned and worried and what happens in that case is you don’t go and make a big purchase. And you pull back on those little purchases.” The National Retail Federation predicts consumer spending will increase a modest 2.2 percent this shopping season. That’s half of last year’s growth.
To offset that, some stores may offer bigger sales. If shoppers spend less, layoffs will almost certainly follow. Experts said the $700 Wall Street bailout and rate cuts may help, but not in time for the holidays. “It’s not something we just jump out of quickly. And that can really hurt the Christmas season and the retail system,” said Root. Director of Iowa’s Department of Revenue Mark Schuling doesn’t know what to expect.
“We’re going to have to wait and see what occurs in October, November and December,” said Schuling. Copyright 2008 by KCCI.com . All rights reserved.