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Retailers look for lift over tax-free weekend

Stores rolling out sales to provide further lure

Joanne Ly, a Curry College student, and her sister Amy Ly, 11, searched for backpack at shopping at L.L. Bean in Dedham. Joanne Ly, a Curry College student, and her sister Amy Ly, 11, searched for backpack at shopping at L.L. Bean in Dedham. (Tamir Kalifa for The Boston Globe)
By Jenn Abelson
Globe Staff / August 3, 2012
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Alan Lavine is not relying solely on next weekend’s Massachusetts sales tax “holiday” to draw people to his Worcester appliance store, Percy’s.

He plans to double the savings — offering another 6.25 percent off merchandise — along with delivery and recycling rebates, and free box springs for mattresses priced over $699.

The Aug. 11-12 break was approved by lawmakers Tuesday, on the final day of the legislative session. Lavine hopes to capitalize on it to boost sales, especially on microwaves, televisions, minifridges, and other back-to-school items.

“This helps drive traffic into the store and get people who are on the fence about buying something to go ahead and do it,” he said. “Customers are more price-conscious, but I do think they are feeling more comfortable about making a bigger purchase.”

Consumers are increasingly doing comparison-shopping online to find the best deal following a long period of high unemployment and the recent slowdown in the nation’s economic recovery, according to the National Retail Federation. Even as the Massachusetts economy continues to outperform better the United States overall, merchants say the sales tax holiday is an important edge to get back-to-school shoppers offline and into stores.

Businesses are cautiously optimistic about prospects for end-of-summer spending. The National Retail Federation recently reported that after cutting back last year, parents plan to increase budgets for school-age children by 14 percent to $688.62, Consumer sentiment dipped in July, but it is still substantially higher than during the same period last year, according to the Thomson Reuters/University of Michigan Surveys of Consumers.

In Massachusetts, the two-day exemption from the state’s 6.25 percent sales tax excludes restaurant meals, cars, motorboats, tobacco and any item that costs more than $2,500. Governor Deval Patrick, who is expected to approve the measure, filed a supplemental budget in July that put aside about $20 million to offset the revenue loss.

Massachusetts has held a sales tax holiday weekend since 2004, with the exception of 2009, during the depths of the recession. Consumers have grown accustomed to holding off on shopping sprees until the mid-August tax reprieve, even though it results in modest savings for most people.

“The psychology of tax-free does make people go out and shop,” said Erin Calvo-Bacci of Reading. “As a mother of three, age 5½ to 12, the tax-free shopping helps since [the list] of back-to-school supply requirements is longer than my wedding registry was!”

Calvo-Bacci said she plans to hit Staples, the Apple Store, REI, L.L. Bean, and Target next weekend and expects to spend more money than last year.

“The sales tax holiday helps all of our members, but for those which cater to back to school, it kicks off the season earlier and stronger,” said Jon Hurst, president of the Retailers Association of Massachusetts. “That means more impulse buys, and a much more successful season.”

Kmart is trying to attract business by offering a wide array of discounts on items aimed at college and grade school students, including a 39-inch Magnavox television for $299.99; an Android 7-inch tablet for $89.99, along with 20-cent pocket folders, and 50-cent boxes of Crayola Crayons.

Simon Malls, which operates shopping centers across New England, is launching a “Back At It” promotion at 10 malls starting Aug. 10, featuring a mix of activities and savings, including a free backpack for shoppers, back-to-school fashion and styling demonstrations, and decals on floors outside stores that are offering special sales during the tax-free weekend.

At Legacy Place in Dedham — where merchants such as Orvis are offering an additional 10 percent discount during the sales tax holiday weekend — the shopping center plans a contest with giveaways that include gift cards, valet passes, automotive detailing, and a one-hour coaching session at the Whole Foods Wellness Club.

Yale Appliance and Lighting in Dorchester took to Twitter on Thursday to start promoting dishwashers for the upcoming tax holiday, including a $799 stainless-steel Bosch model that the store said is $100 less expensive than last year.

Some national chains, including Walmart and Staples, are not offering specific promotions tied to the tax holiday, and instead will focus on their traditional back-to-school sales. Framingham-based office supplier Staples is offering $100 Visa prepaid card for students — with school identification — who buy select laptop models.

“Combine that with the tax-free offer, and it all adds up,” said Karen Pevenstein, a Staples spokeswoman.

Jenn Abelson can be reached at abelson@globe.com.

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