February 18, 2013

Mediocre holiday sales numbers for Maine meld to retail decline in January

By Paul Koenig pkoenig@centralmaine.com
Staff Writer

With the holiday season receding in the rear-view window, Maine retailers are reporting a mixed bag of shopping results even as they look forward to a new year that’s gotten off to a slow start.

click image to enlarge

Jennifer Bergeron tried out a Gardiner location for her shop, called earth bound, as part of the pop-up shop program in the city's downtown over the holiday season.

Staff photo by Joe Phelan

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Gardiner found some success with its effort to boost downtown foot traffic by offering new businesses free rent for November and December. Three businesses moved in as a result of the Gardiner Main Street project, and one business stayed.

Clare Marron, owner of Monkitree in downtown Gardiner, said the increased foot traffic helped her business greatly, doubling holiday sales compared to the year before.

She said the store, which has a mix of home goods and other products from local artisans, also benefited from a seasonal pottery store that opened across the street for the month of December.

The owner of one of the pop-up stores, earth bound, however, said she was hoping for more sales at her clothing store in Gardiner.

“I think people were putting on the brakes a little bit, and hopefully that will relax a little later,” Jennifer Bergeron said. “We’ll see.”

Bergeron said all her women’s clothing boutiques, with permanent locations in Hallowell and Waterville, had a slow holiday season. 

Retail sales overall in Maine dipped during January after a strong start. Michael Allen, associate finance commissioner for tax policy, attributed the decline to the Jan. 1 expiration of a 2 percent payroll cut and to rising gasoline prices.

“I’d be surprised if we saw a rebound in January sales,” he said. “I’d guess they’re going to be in tough shape, too. That’s kind of what we’ve been hearing nationally.”

Overall, Maine retail sales during the past holiday shopping season fell short of expectations in terms of sales tax collected by the state.

General merchandise sales in December were down 3.4 percent compared to the previous year, while sales in November and December were down 1.5 percent, according to revenue reports from the Office of the State Controller.

Allen said it appears retailers that target middle class shoppers struggled the most, while bargain-priced stores and higher-end retailers fared better. 

Sales tax revenue from all purchases in December missed state projections by 3.8 percent, or $3.7 million, he said.

Allen doesn’t think anyone in the state anticipated holiday sales dropping so much.

“It’s a little disappointing,” Allen said. “We haven’t had time to fully digest it yet, but we certainly weren’t expecting anything like this, this type of weakness in the numbers.”

But in Augusta, the head of the downtown promotional organization said the majority of businesses reported having holiday sales around the same or better than last year.

“I heard some really good reports from restaurants and clubs,” Augusta Downtown Alliance President Larry Fleury said. “A couple of retail places were off and a couple were doing good.”

Augusta has many service-type businesses downtown, such as beauty salons and fitness studios, and Fleury said they reported doing quite well during and after the holiday season.

He said the perception of Augusta has improved among consumers and business owners thanks to a few new restaurants and efforts to improve the look of the downtown during the holiday season with planters, wreaths and fresh greens.

“Attitude seems to be way up on Water Street,” he said.

Fleury said the weekly cash mobs they held during the holiday season also provided a boost for the businesses visited each time. 

Unlevel playing field?

Nationwide, holiday sales were up 3 percent from last year but below the 4.1 percent increase projected, according to the National Retail Federation, the world’s largest retail trade association.

Curtis Pickard, executive director of the Retail Association of Maine, said he heard positive results from major retailers such as Kittery Trading Post and Marden’s department stores, but thinks retail stores suffered from a surge in online shopping during the holiday season.

(Continued on page 2)

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