Basalt’s sales tax revenues have taken a 6.67 percent dive during the first quarter of this year compared to the same period of 2013, but Town Manager Mike Scanlon said it’s too soon to worry.
Scanlon said he wants to wait until June to allow more time for a trend to develop. Monthly sales were down in January and February compared to the prior year. March logged a modest increase in sales, according to a report by Assistant Town Manager and Finance Director Judi Tippetts.
Last year was the strongest in Basalt’s history for sales tax revenues and the first strong year-to-year increase since the recession hit in 2008. Sales tax collections soared 19 percent to $4.09 million.
The recovery was due, in large part, to the opening of Whole Foods Market at Willits Town Center and the development of surrounding commercial space. The sales tax reports don’t show the performance of individual businesses. However, retail food sales by the town’s three grocery stores were up about 30 percent in 2013 over 2012.
But what went up in 2013 is now going down in 2014, at least through the first quarter. Retail food sales are down nearly 16 percent in January, February and March. (The report reflects sales made December through February and collected by the government the following month.)
Tax revenues from retail food sales fell from $529,882 in the first quarter of 2013 to $447,259 in the first quarter this year, according to the sales tax report. While Scanlon isn’t panicking, he said he was puzzled by the sales data.
“What happened in January and February that was so dramatic?” he asked. “Did people just not shop as much because of the weather?”
Whole Food and City Market don’t discuss sales performance of specific stores because of corporate policies. However, the weather could have been a factor, particularly in January. The grocery stores have solid midvalley bases that patronize them regardless of conditions, but upvalley residents and second homeowners might have been less inclined to drive downvalley for groceries in January, when cold temperatures and several snowstorms made roads treacherous.
Other major segments of Basalt’s economy were a mixed bag in the first quarter of 2014 compared to the same period last year. Sales by restaurants with bars were up more than 6 percent. General retail sales — reflecting business at mom and pop stores — were down nearly 14 percent. Sales by sporting-goods stores climbed 16 percent, the report showed.
The performance of individual businesses could be better or worse than the category as a whole.
Total retail sales revenues by all businesses were $981,932 for the first quarter this year compared to $1,052,162 last year, the town’s report showed.
The second quarter is typically a slow period for businesses throughout the Roaring Fork Valley as tourism takes an offseason breather. Basalt’s bread-and-butter period is July, August and September, when fishing draws visitors to the area.
Despite the offseason lull, Scanlon said the next few months will help develop a pattern. He wasn’t ready to pronounce the honeymoon over for Whole Foods.
“By the time I get to June, I’ll have a better idea of what’s going on,” he said.