High inflation offsets June gains by Aspen retailers, according to report
Aspen retailers combined to generate 6.4% more in sales in June, which still wasn't enough to keep up with inflation.
Aspen retailers combined to generate 6.4% more in sales in June over the same month last year, but the spike wasn’t enough to keep up with the rate of inflation, according to a tax collection report the city issued Monday.
The $101.2 million in taxable sales Aspen retailers rang up in June came the same month the U.S. inflation rate of 9.1% signaled the largest increase over a 12-month period in 40 years, according to the Bureau of Labor Statistics. Food prices nationally increased 10.4% for the year ending June 2022, the largest increase since February 1981. Apparel prices went up by 5.1%, and home furnishings grew in price by 10.2%.
As prices all over the country surged that month, the same could not be said for retail sales in Aspen, noted city finance director Pete Strecker.
“Given 9% inflation in June, however, it is reasonable to assume that economic activity was lagging,” Strecker wrote in the city’s monthly sales tax consumption report issued Monday.
Bright spots in June included the return of the the annual Food & Wine Classic. Last year, the classic, which has served as the June kickoff to Aspen’s summer tourism season, was moved to September because of the pandemic.
Lodging, bank and finance, and health and beauty sectors all posted double-digit percentage increases in June sales over June 2021. Sales in the miscellaneous category, which includes online transactions, improved 20.5% in June over June 2021. Clothing and food and drug trades showed slight gains.
Industries showing decreases during the same month were restaurants and bars, liquor stores, marijuana dispensaries, sports equipment and clothing shops, jewelry and gallery businesses, the construction trade and the automobile industry.
“The accommodations industry experienced 35% growth in taxable sales, likely due in part to the return of the Food and Wine Classic in this period, but also due to price escalation,” Strecker noted. “Conversely, restaurants and bars showed a significant decrease in taxable sales of 17% compared to last year, as several restaurants in town are still shuttered and some outdoor seating spaces have been reclaimed for public use.”
June still exceeded the city’s budget projections by 28.9%, with the city turning $2.5 million in sales tax collections. The city had forecast $1.9 million in collections for June.
Between giving visitors tips on what to do on Monday and the rest of the week, Cindy Fioroni said this summer looks much like last summer in terms of business and busy-ness.
“People are coming here,” said Fioroni, who works at the Aspen Chamber Resort Association’s visitor kiosk in the heart of downtown and catty-corner from Paradise Bakery. “I think the last two years, every year topped the previous year. 2020 was crazy, crazy. We didn’t think it was going to be that way. Last year was even busier, and I think this year is equal to last summer, or a titch bit busier. I do think we’re bursting at the seams.”
The report’s tallies from the first half of 2022 showed the retail economy accounted for $591.7 million in sales, which was 39.9% greater than the $442.8 million generated in the same timeframe in 2021. The business climate in the first two months of 2021 was particularly challenging for Aspen retailers because of public health orders placing restrictions on restaurants and other locations.
From January through June, the city collected $14.3 million in sales taxes, which beat the $11.1 million budgeted for that period by 28.1%, according to the report. By comparison, the city realized $10.2 million in sales tax revenue in the first half of 2021, which was 39.6% off the pace set this year, according to the report.
While the city’s most recent sales tax figures go through June, an idea of July’s performance can be gleaned from commercial airline data that Basalt travel consultant Bill Tomcich released Monday evening. July’s count of passengers arriving to and departing from Aspen was 58,322, which was 8.5% lower than the 63,763 passengers in July. Tomcich attributed the drop-off to American Airline’s “capacity reductions combined with weight restrictions during the summer afternoons that limit the number of seats that can be sold on many outbound flights.”
Ginger Kennington, box office and house manager for Theatre Aspen, said there has been a recent spate of ticket cancellations “due to COVID, and there’s a new virus going around unnamed that starts with a sore throat and has diarrhea.” Many travelers also are picking European vacations this summer, she said.
Aspen’s guests also seem to be different than those from previous summers, said Fioroni, noting she has been seeing more first-time visitors this year.
“The people are a lot more needy, and I’m just gonna outright say it: They don’t really know how to do things,” she said. “They don’t want to go out on their own little adventures. They want to know where the best restaurant is and where the best hikes are. Those are the questions I get the most. They’re here to experience and enjoy and explore, but it seems like they want to go just right to the best of the best.”
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