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Local business sales up 6 percent in 2014


With budget and tax seasons upon us, money is on the minds of many in Petersburg. Locally, the economy saw about a 6 percent growth in sales across all categories of business from 2013 to 2014. Petersburg businesses reported almost $122 million in sales for 2014, which brought in $3 million in sales tax revenue to the Borough.

Retail sales mirrored the overall trend, seeing about a 6 percent increase from $5.17 million in 2013 to $5.5 million in 2014. Several downtown retailers said 2014 kept pace with 2013, not a particularly busy or slow year.

“I would say 2014 was about the same as the previous year,” said Linda Herff, owner of Kinder Komfort. She added that business perks up in the summertime with out of towners of all stripes providing a bump in sales. Though last year she also saw the impact of local fishermen working away from Petersburg’s waters, and thus frequenting her toy store less.

Diamantes owner Theresa Litsheim said 2014 met her expectations and was about on par with 2013, though shoppers had an easier time accessing her store last year because the main street road project was completed.

New to the retail industry, Lisa Nilsen of Skate of Gear said she’s seen an increase in foot traffic in her store that moved to Main St. last September.

“I think that what they say about location is everything is absolutely true,” Nilsen said. “It’s made a huge difference.” Though it remains to be seen whether her shop will see a boost in tourist-related traffic and sales this summer despite the more visible location, she said, because her product mix, though diverse, doesn’t specifically cater to tourists.

Retail seafood processing numbers were also up in 2014 with sales totaling $6.3 million in 2014, up from $4.34 million in 2013 and bringing in $13,000 more in sales tax revenue.

Thomas Cumps, owner of Northern Lights Smokeries, said his business has been growing since he purchased it in 2006.

“Steadily every year the numbers go up just a little bit, so that’s a good sign,” he said. “It (2014) was a really good year for me.”

Cumps said that his customer base is diverse and includes custom processing for local customers and supplying restaurants outside the region, a segment of his business that grew last year as some of those businesses expanded.

Small business owners in Petersburg do face challenges. Several owners mentioned shipping costs as one thing that affects their margins. Staffing was another concern, both in terms of finding reliable staff and taking on the extra costs associated with them.

Revenue increases and losses

Charter and travel businesses represented the single largest increase among all business categories, reporting $3.16 million in sales in 2014, up from just over $2 million in 2013. Those sales brought in almost $38,000 to the Borough, and much of this business was done over the summer months.

Accounting for this increase was the Borough’s incorporation, effective at the beginning of 2013, which brought in sales tax revenue from businesses in outlying areas not previously collected from.

Petersburg shoppers took advantage of two Sales Tax Free days in May and October of 2014 from which the Borough lost $19,270 in tax revenue. Tax exempt seniors age 65 and older spent $5.55 million in town last year. The Borough lost just over $333,000 in revenue from those sales. This was up 20 percent from 2013 when seniors spent $4.45 million, exempting them from $267,124 in sales taxes.

Regional outlook

Regionally, Southeast’s economy saw growth between 2008 and 2013—most notably in seafood, health care, tours and the Coast Guard—according to a report by Rain Coast Data given at the last Southeast Conference.

“The region has reach historic highs—but in 2013 this growth has leveled out,” the report said, adding that the challenge for the coming years will be “determining new ways to attract people, jobs and economic development.”

This is especially true for Petersburg, which saw a zero percent population growth between 2010-2013 and has an aging population.

Retailers said so far 2015 is off to a slow start, but they anticipate the season will pick up starting next month as fishing and tourism get underway.


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