Only 42 percent of respondents said their sales would equal last year’s, while 40 percent said they expected to see a decrease in sales. Another 18 percent expect increased sales this year.
“Although we’re seeing reports about consumer confidence rising and a better housing market nationally, this is a reflection of the rising cost of doing business – including employee benefits, taxes, government regulations and goods,” KRF President Tod Griffin said.
KRF members cited healthcare reform as the biggest impact on their ability to grow their businesses, revealing continued concern about the implementation of the Affordable Care Act.
“We continue to hear from our membership that they don’t know how to plan for the ACA,” Griffin said. “They are hesitant to take on new staff or to invest in their own business growth until they know how much health care reform is going to cost.”
Retailers also cited concern about competition with online retailers. Over 93 percent of respondents said they expected to lose sales to an online retailer this year.
“Kentucky retailers have asked the state’s congressional delegation to support sales tax fairness legislation that is currently pending in Congress,” KRF Vice President of Communications and Public Relations Laura Leigh Goins said. “Our members can compete with the retailer next door, even when the retailer next door is selling online. However, they can’t compete when the online retailer is out-of-state and receives a six percent advantage because they are not required to collect the state’s sales tax.”
Additionally, respondents also cited the decline in Kentucky’s coal mining industry as a concern for the first time since the survey began in 2010. Coal jobs in Kentucky have fallen to the lowest recorded number since 1950.
“The numbers verify what we’ve heard anecdotally from our members over the past year,” Griffin added. “The future of our state’s coal industry will have a big impact on retail and other sectors.”