J.C. Penney announced it will close five stores in Mississippi communities – Columbus, Corinth, Greenville, Meridian, and Oxford. Earlier Sears announced three closures in Columbus, Jackson, and McComb, with more to come. Even Wal-Mart has closed stores, in Belmont, Mantachie, Sardis, Walnut, Derma and Nettleton.
Two years ago Radio Shack closed 20 stores in Mississippi, in Jackson, Hattiesburg, Meridian, Cleveland, Biloxi, Gulfport, Ocean Springs, Waveland, Vicksburg, Tupelo, West Point, Grenada, Greenville, Corinth, Greenwood, Laurel and Natchez.
"Brick-and-mortar stores are suffering due to competition from online sales, and the closures just keeping coming," reads a March headline at TheMotleyFool.com. "Last year took a devastating toll on the retail industry, and the carnage will continue in 2017," the story reported. "A number of chains will likely not survive the year, and many that do will finish 2017 smaller than before."
"Sporting goods stores are down for the count," begins a story in USA Today. "The scourge of insolvency is sweeping through the sector as online sellers gain the upper hand over yet another corner of retail just recently dominated by big-box chains, specialty stores and mom-and-pop shops."
As if individual store closings aren't enough, "Store closures will push 30% of US malls to the brink of death," Business Insider reported. "Since the start of the year, more than 1,500 store closures have been announced by retailers including JCPenney, Macy's, Sears, American Apparel, The Limited, and Abercrombie & Fitch. Most of the closures will happen over the next several months.
Guess what all these brick-and-mortar Mississippi stores have in common? They all charge and collect sales taxes. While their closing reduces state sales tax collections, it really impacts tax revenues in affected municipalities…especially when you add in lost property taxes.
Local communities could at least recoup taxes lost to Internet sales if the state collected taxes on sales from online vendors and shared them with communities. They do in Alabama.
Alabama passed a bill to collect taxes on online sales in 2015. It provides strong incentives for online vendors to voluntarily collect taxes. Today, 85 retailers with no stores or physical presence in Alabama have signed up for the "Simplified Sellers Use Tax" program, according to AL.com.
As this session of the Legislature winds down, Mississippi communities still can't count on any similar legislation to help them out.
But, mayors in communities affected by stores closings shouldn't worry, because their legislators clearly don't... at least that's what many mayors have come to believe. "They don't (unprintable language)," said one.
Not only do legislators not pass most revenue proposals mayors request, they continue to make decisions that push costs down to the local level.
"I am not sure anyone in the legislature understands the feelings of numerous mayors and supervisors as to concerns facing them on a daily basis," said another mayor.
Online sales driving brick-and-mortar stores out of business is just one of several systemic changes impacting community finances.
The number of perturbed mayors and other local officials mounts. Will they finally get legislators' attention? Or will it take election challenges?
Crawford is a syndicated columnist from Meridian (crawfolk@gmail.com)
31 comments:
I live in Jackson and hardly ever shop online because it's so hard to get anything delivered without having it stolen. I recently ordered something online only because I could not get it locally. It is supposed to be delivered today so now I'm stuck at home all day. Fondren problems.
I could care less about big box retail stores. Why I avoid them:
1) horrible customer service (if any at all)
2) dirty changing rooms. Ever been to the men's changing room at Belk at northpark? Smells like urine and feet.
3) expensive
4) too much of a hassle to get to
5) don't feel very safe after 5 at northpark.
The days of "you have to shop at a big box brick and mortar" are gone.
Get it delivered at work.
Big box stores are not malls like Northpark. Those are two different things.
Malls are enclosed shopping centers that have anchor stores like Belk, JC Penney's, Macy's, etc.
Big box stores are stand-alone structures like Best Buy, Wal Mart, and Costco. Large box-like structures, if you will.
Go to Northpark all the time and never have a problem. In fact, went there last night around 8 and it was normal. No teens out of control, white and black folks there, no problems.
i'm old enough and well travelled enough to know that a vibrant downtown experience beats indoor shopping malls and strip malls! if we gave smaller retailers the same kind of corporate welfare we give to big box stores and shopping centers, downtowns full of LOCAL owners would be thriving.
too bad we sold our souls for a big blue store that sold things a few bucks cheaper
It's hard to even classify the legislature as "conservative" any more.
They're more like that college freshman who got a D in economics, but still spoke constantly in class, quoting Rush Limbaugh and Ayn Rand.
Consumers owe not duty to local businesses. If a consumer can buy exactly the right good via internet, or mail in the old days of both Sears and J.C. Penny's catalogs, for a fair price that is between the buyer and the seller. Case of what is seen and unseen. Were I to buy a couple of items at the Home Depot vice the local hardware store, one sees only that I didn't patronize a local business. What does one do with the savings? Maybe a cup of coffee at a local owned coffee shop, or a meal at a local owned restaurant. Local businesses that earn my business get it because of quality or customer service...seldom price because of economy of scale. But, my buying from internet/bigbox/whatever boogey man it will be next week, saves me the money to pay extra at local businesses for other products. Maybe it's a few bucks extra I can give to a local non profit? I sold my soul to no big blue store. You've no right to compel me to put my family second so a local business thrives. At the local level crony capitalism, market capture, and regulatory capture or dying. Adjust or go out of business. Your name on a store front on Capitol Street 100 years made you a ton of money at the expense of many. Don't cry foul when those from whom you profited by simply because you put your interest first decide to do the same for themselves.
Does anyone think that the Motley Fool article referenced takes in to account the piss poor economic environment of Mississippi? Ever wonder why there is a new Dollar General popping up daily, but very few other brick & motor stores??? Simple economics. We are one of the least desirable states in the nation for brick & motar expansion. There are pockets of development throughout the state where the $$$ make sense.
This article over simplifies the problems plaguing JC Penney, Sears, Gander Mountain, and more. On-line shopping is not killing retail. Some retailers are killing themselves. Ever heard of H&M? Zara? Is Amazon putting the hurt on WalMart? Indeed. Just like WalMart put the hurt on K-Mart and Main Street's mom and pop stores pre-internet. Competition is great for consumers. Not so good for those in business that don't adapt. Woolworth's anyone? If you provide breakthrough technology, desirable products/services, treat your customers right, gain mindshare through effective marketing, and are adaptable - business success is in your favor.
Apple put blackberry and the Windows based PC businesses on life support. And yes, that too impacted businesses and sales tax collections. Until it didn't. Along with music and record stores that no longer exist. Business models and consumer tastes change. Mississippi must learn to adapt. Something that it continues to resist at every turn.
Apple put blackberry and the Windows based PC businesses on life support.
Blackberry maybe but Kingfish is more qualified to speak there. Windows-based PC businesses? Nope.
In truth if anyone would admit it, the real problem is theft. Large groups come in the store and merchandise goes out but no one buys anything. Hard to make a profit like that.
At least Academy Sports has figured it out. If they are out of something you can order it online with free shipping. The store on County Line was out of my .308 hunting load but offered to order it for me on the spot. Walmart will do the same thing through their website. They both charge sales tax for online sales but they at least do not lose customers like some stores in the metro do when they don't have something and I have no alternative but to shop elsewhere, which usually means Amazon. Lots of private stores have service that makes up for price disadvantage, Buffalo Peak comes to mind. The people that are getting hurt are the guys reselling the same Chinese made stuff as a big box except with a 25%+ markup. That business model is not sustainable and frankly should not be.
Cities and towns still need revenue for basic services. Either pass an Internet tax which only
kicks in when you buy something or pay higher property taxes which are unavoidable unless
you move. Of course, if needed services are cut then watch your area slide.
Amazon has been collecting Mississippi sales tax for several weeks now. Does anyone know if it will be distributed down to the local level?
Retail has more problems than just the tax. Here in MS, retailers and every other business in a shopping center they don't own, doesn't pay just to rent the space, but pays the developer/owner to finish out and maintain the interior. They also have to pay a percentage of their sales to the owner.
Mark-ups in retail have traditionally been so high, that a Walmart or Amazon, can end up buying the same goods and marking them way down and still profit. They can buy in larger quantities or buy what the manufacturer doesn't sell.
But, the real issue is convenience . Families, especially with both parents working, don't have time to shop anymore. Even grocery shopping has become a time problem so, in response you can order online at Kroger and pick up food.
Collecting taxes may help in the short term, but if we cant become more future oriented, we will continue to have trouble competing with those who look ahead rather than backwards.
Mississippi has always been far enough behind the curve of change to take advantage of trends elsewhere. But, we are too into our own " exceptionalism" to do anything but defend the past.
Meanwhile, I'm a business owner who sells online. I have a handful of employees, we are a startup, but if I had to collect sales tax and remit to every single cotton picking tax district in the country I'd have to hire a full
Time person just for that job. Which would basically shut down the opportunity.
I know lots of other retailers online like mine and they are creating jobs and adapting. Stay the hell away from my pocket book! No more taxes and collections unless we wanna go for a flat tax!
As a famous cartoon character once said "we have seen the enemy and he is us".
Retailers especially the big boys owned their customers and their business but sadly never saw them for what they are/were. The dept store chains wanted to get prices down to compete with Wally World but only as far as getting the price lower so they could also say look at our quality. It did not work.Putting out an item a two or three times what it will sell for in 3 weeks does not make you any friends. Brands are not a important as in the past, its quality against price.
Bloomberg wrote this week Amazon's private label and branded apparel came within striking distance of all of Macy's apparel sales and will surpass Macy's apparel sales in 2017. Kohl's the hero of retail in the past has had five years of down profits.
Costco had had a successful test of home deliver to their customers and plans on rolling it out nationally. Kroger, Wal*Mart and others are working with Uber and Lyft to deliver to customers homes, up next the drug chains. Amazon in big cities will deliver in one hour what you order including grocery items, my daughter in Atlanta love's it.
Rest assured our grandchildren will shop differently than anyone now can imagine. Small brick and mortar stores should have plan if not its to late. The big boys current plan includes small stores but if the thinking inside those four walls stays the same, small won't get it.
IMHO the online business or its success was so misjudged that as we all know will be the doom of a lot of names we all grew up with. Retail as we used to know it is imploding around us.
Lots of regurgitation here today.
We also have a large problem with lazy, overweight or glued-to-tech generations that do not want to get out and walk a big box store or a shopping center.
Northpark actually seems safer now that in the past few years. I've gone several times in the past few months and had no problems. I had stayed away for several years.
I agree with 10:55's comment. There could be so much enjoyment for everyone if we had the mom and pop small store experience again. If every town had a small downtown area it would be safe, convenient and bring back a way of life that some of us remember from long ago. It wasn't bad and it works. A lot of people made a good living doing this and it can and should be done again. Maybe it's just wishful thinking for me.
We have zero farking obligation to patronize local bidnesses. Just as local businesses have zero obligation to engage in pricing wars to attract our interest.
The cost of doing bidness is often business failure. The cost of being a consumer is often the reality of having difficulty finding a product. I think there are terms for this frightful phenomenon.
Indeed, 1:39. If we could just pick Mr. O'Malley up from the 1961 Silver Eagle down to the Trailways station, mosey on over to Floyd's Barbershop for a trim, maybe sit an hour on a Pony Keg at Ben's Mercantile and help Bea with the flower beds.....I like your idea. Let's resurrect it. Where do we start? It's not wishful thinking at all. It's pure fantasy.
Right now I can get a S&W MP Shield 9mm (the compact one) on Gunbuyer.com for $319. An FFL holder will usually charge a $25 transfer fee unless you have a friend who has one and will charge you zero.
Meanwhile over at Bass Pro that same gun is $429. Academy's website has it for.... $389. Big difference. Keep in mind these are big box retailers who are typically lower on price but poorer on actual service.
Repeat that over and over. Amazon would charge $15 for an HDMI cable, and we all know that is really not expensive to make but Best Buy would sell it for over $50.
I use the big boxes and Amazon not just because of price but because of selection and convenience. Sunday afternoon and I needed to buy a tool? Ace in Maywood would be closed. So I would go to Home Depot. I might go to Ace during the week but then it wouldn't have the tool I needed so over to Home Depot. If I buy a book in a bookstore, it is usually after 7 at night when Lemuria is closed. At least they are better. They once kept almost-banker's hours but that was a long time ago. Then there are drones. The one purchased last year was $200 cheaper than the local store on Amazon and that was without the tax difference.
Things are changing. Creative destruction.
Just wait fifteen years til the day we drive through these college towns and the campi are ghost-towns. There's some sort of university logo on the triangular high-rise across from Chile's in Jacktown. Probably they have a desk and a girl answering the phone but they must offer a degree.
So...when this eventuality comes to pass, we'll hear people bemoaning the demise of our public institutions and claiming we need to support them.
One day the only trade left to the streets will be prostitution and that's only because you can't purchase a box of Poon-Tang over the internet. Yet.
In the first place, it's not sales tax or lack of sales tax that's attracting customers to the internet.
In the second place, it's not the legislators' responsibility to make mayors and supervisors happy.
You want to know why I buy on line? Because of the almost total absence of shopping alternatives in the Jackson Metro area. It's not a matter of safety. Its a matter of having options It's either Belk, Pennys, Kohls or Steinmart and a couple of boutique stores (translation: high price, teeny-bopper) That's it! Belk is like a giant garage sale. Best quality item in the store is Walmart quality at twice the price. Penny is ok...for what they have. Kohls is just 1/2 step above Walmart. That leaves Steinmart....and there it is hit or miss on availability of size and rarely can you go there and find that one specific item you might need.
Dillards has a good shoe dept. Sonny in suits knows his stuff.
maybe we stop taking 7% of people's money that has already been over-taxed when they earned it. Cesar should stop taking care of everyone and just keep the roads paved and police paid.
March 26, 2017 at 7:45 AM
Your quote - "Here in MS, retailers and every other business in a shopping center they don't own, doesn't pay just to rent the space, but pays the developer/owner to finish out and maintain the interior. They also have to pay a percentage of their sales to the owner."
You got yourself a bad deal son. My landlord gave me money to build out my space and I do not pay % of sales.
No upside to shopping off-line anymore, particularly in these chains. They only have a fraction of the stock displayed and honestly, if I wanted to look at what they have to offer on a computer screen, I would do it at home. Customer service sucks. No incentive. It is their problem and they need to make the shopping experience more attractive or they will continue to lose relevance in retail.
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