Retailers Want a Holiday

With the holiday season not boding well for retail, it seems retailers have turned their sights on another sort of holiday (as reported on BusinessWeek.com). In an effort to kick start spending, the National Retail Federation is proposing that sales tax holidays be included as part of a stimulus plan.

The plan calls for three sales tax holidays to occur throughout the year -one in March, one in July, and one in October. The federal government would reimburse states for the lost tax revenue. The Federation estimates that in doing this, the average family could save around $175 a year.

What I'm left wondering, as one commenter on BusinessWeek.com was too, is if this relatively small amount of savings will really convince people to get out and spend more. Perhaps on larger purchase like cars where the sales tax is more substantial, but for lesser purchases, it might not prove as stimulating. If the deep discounts offered by many retailers this past holiday season wasn't enough to coax shoppers to buy, I'm not quite sure what will do the trick.

Working for a company that relies on new store openings and remodels, it's hard to read about bankruptcies, store closings and scaled-back expansion plans. Luckily, our clients have been able to weather the storm pretty well so far. Still, we've a long way to go before we're out of this mess.

If you were in charge, what would you propose the retail industry do? Leave your comments here.