Tax holiday weekend proving reliable relief for retailers

By Laura Finaldi, Globe Correspondent

Retailers say the sales tax holiday weekend that just ended likely produced higher sales and traffic than in previous years, proving to be a crucial crutch to get them through an otherwise quiet shopping period.

At Percy’s , a television and appliance store in Worcester , vice president of sales Alan Lavine said sales this past weekend exceeded the previous year’s tax holiday by a considerable amount--somewhere in the high single digits. Lavine also said customers weren’t being indulgent, rather, they were buying basic goods such as appliances they would use for a long time.

“Let’s put it this way: They weren’t coming in and buying five TVs for the house,” Lavine said. “People were buying things they need.”

The tax holiday has been a near-annual event since 2004, when the state lifts the 6.25 percent sales levy off most items $2,500 or less. Many retailers also offered additional discounts, which further helped induced shoppers to the stores.

“All the feedback that I’ve gotten as well as my own observations over the weekend lead to that it was a phenomenal success,” said Jon Hurst, president of the Retailers Association of Massachusetts, who estimated overall sales for this past weekend surpassed last year’s holiday by 6 to 10 percent.

Indeed, the price breaks appears to have prompted impulse buying at some retailers, such as Bernie & Phyl’s, which offered an additional discount to bring the total savings on purchases to 12.5 percent.

“Some people were actually shocked--they had just come out for the tax savings themselves. I’m guessing that probably prompted a few purchases,” said Peter Markunas, manager of the Bernie & Phyl’s furniture store in Braintree. Bedding was a hot-ticket item, Markunas said, with back-to-college shoppers spending lots on box springs, mattresses, and futons.

But some retailers reported uneven results. Foot traffic at the CambridgeSide Galleria mall was up around 3 percent over the previous year, said senior vice president Issie Shait, but overall sales were up only slightly.

“Stores you would have expected to have a good weekend, they did okay--a little better than last year,” Shait said. “We probably didn’t do as well this weekend as we could, but I’ll take up over down any day.”

Massachusetts Department of Revenue spokeswoman Ann Dufresne said the state has it will lose $21.55 million in tax collections from the holiday but cautioned the government won’t know the exact amount for months.

Numbers aside, retailers have come to rely on the tax holiday to help get them through a slow period in the summer, and even launch back-to-school shopping earlier. Some said they even noticed shoppers welcomed the chance to open their wallets. At Percy’s, Lavine said the attitude of customers was consistently upbeat.

“People were happy, it was weird,” he said. “They were saying, ‘Its time. It’s time to replace, it’s time to renew.’”