Central Virginia’s retail industry is looking “good but not great,” according to a recent report from the Charlottesville Regional Chamber of Commerce. Though, compared to the past few years, the 2023 report indicates the sector is at the very least trending upward.
In total, nearly $2.8 million more was collected in retail sales tax, including online sales, last year than in 2022 across the chamber’s coverage area. This represents a 4.28% increase in revenue.
The Chamber’s report is based on 2023 data from the Virginia Department of Taxation in all seven localities within its service area: the cities of Charlottesville and Waynesboro and the counties of Albemarle, Augusta, Fluvanna, Greene and Louisa.
Louisa County saw the most growth in 2023 with a sales increase of 13.97%.
“I am encouraged by positive trends and have great optimism for our region,” Rebecca Ivins, Chamber president, told The Daily Progress in an email. “We have reversed the COVID trends, and residents and retailers should be encouraged by this. Economic development strategies should continue, and the Chamber will remain actively engaged in these efforts.”
The post-pandemic shift back to local, in-person shopping in addition to a steadily falling inflation rate are a couple factors behind last year’s growth in retail sales tax revenue, according to Ivins. She also attributed some of the economic development to local businesses that played a role in bringing new workers to the area, such as Sentara Health and Apex Clean Energy.
Despite the overall “good,” some counties fell under the “not great” category.
While sales still rose, Augusta and Albemarle counties failed to stay ahead of the 4.1% increase in the 2023 consumer price index. The consumer price index is used to measure inflation and is determined by the average change in prices consumers pay over a period of time.
Augusta County collected 0.37% more in retail sales tax in 2023 than the previous year, while Albemarle County’s revenue rose by 1.62%, both failing to keep up with the region’s consumer price index.
The retail industry is a vital component of each localities’ economy, but particularly for Albemarle County. The sector accounts for nearly 6,000 jobs and is the second-largest private employer in the county. By comparison, in Louisa County, retail is the third-largest employer with 1,695 workers.
“While as a region, the retail sector continues to expand, the details of the 2023 Retail Report indicate immediate challenges for our retail core,” Ivins in a statement announcing the latest figures. “Economic development efforts should continue to be focused on this critical, job producing, business sector.”
There are variety of challenges facing local retailers, according to the Free Enterprise Forum, a privately funded public policy organization focused on local governments in Central Virginia. Those include an expensive local housing market with low availability and high demand as well as heightened regulations on the industry as a whole.
“I agree with the report title that was a good not great year for retail sales,” the group’s executive director, Neil Williamson, told The Daily Progress in an email. “To be clear, I believe the retail sector is still strong but 2023 was regionally a ‘good’ year.”
In order to achieve ‘greatness,’ all localities would have had to report retail sales significantly exceeding the consumer price index. The blame for failing to meet that standard does not fall entirely on the counties of Augusta and Albemarle. The percentage increase in sales tax for Charlottesville was only 4.92%, barely surpassing the index, while Fluvanna County also fell slightly under with 4.02%.
As a whole, the local retail sector is evolving and there is a recent emphasis on experiential retail as well as the food and service industries, according to Ivins. This transition is particularly evident on Charlottesville’s Downtown Mall. The pedestrian mall at the heart of the city saw its retail property vacancy rate fall to 3.14% over the course of six months, with four new eateries opening since July, according to a recent report conducted by the Charlottesville Office of Economic Development.
“Increased focus on economic development efforts, plentiful and affordable housing and creating a sense of place right now will be a key priority,” she said. “Our region has vibrant retail sectors, and the Chamber will continue to be a collaborative partner to support more consistent growth.”
Source: www.dailyprogress.com
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