Retail figures, sales tax show economy improving

The shoppers are coming back.

Retail sales figures released Wednesday both nationally and locally have sparked hopes that the economy, however slowly, is on the mend, offering more signs that consumers are emerging from last year's spending lockdown.

"We are seeing a difference in our customers' vibe, their behavior," said Jenny Montiglio, owner of Ooh La La boutiques, whose five year-round Long Island stores have seen about a 3 percent increase for the first three months of this year compared with the same period last year. "People have more of a sense of security or feeling more financially secure. And the tax [refunds] also help a lot."

Though retailers and retail experts caution that the gains are in comparison to last year when the economy was bottoming out, they said a combination of more confidence, tax returns and an increased sense of security has spurred people to shop again.

Both Nassau and Suffolk counties have seen sales-tax receipts rise. Suffolk's sales tax receipts -- minus the residential energy tax -- got a boost in January and February, increasing 6.7 percent over the same period last year.

Nassau said Wednesday that sales tax revenue, excluding the residential energy tax, rose 4.4 percent for the months of January and February, over the same period last year. In both counties, sales tax revenues had declined for both 2008 and 2009.

March retail sales nationwide increased 7.6 percent over the same period last year, making it the fifth straight month showing year over year gains, according to the Commerce Department. March sales also rose 1.6 percent from February, marking the third consecutive month of sales increases.

The Federal Reserve Wednesday released a survey that showed "economic activity increased somewhat" for all of the Fed's 12 regions except for the St. Louis region.

Merchants running sales and auto dealers offering deals with zero-percent financing have helped sales, said Joel R. Evans, a professor at Hofstra University's Zarb School of Business. And all of this good news also builds consumer confidence.

"The market has really had a pretty good run-up in the last couple of months in anticipation of this," Evans said. "One can only hope this will start converting to employment."

Consumers, while still shying away from impulse purchases, have come out of their cocoons, Long Island retailers said. In March, especially, the good weather and the Easter and Passover holidays played a part in boosting sales, they said.

"The season is so relevant to numbers like this coming out and I think the retail climate reflects the same," said Julie Marchesella, the owner of Queen of Hearts, a Merrick boutique, and vice president of the Nassau Council of Chambers of Commerce.

"With the change of season, children need new clothes. Women are going to take a look at what they have and decide they need new things."

Last year, people were fearful and still paying off debt, Marchesella said. Now some of that has subsided, she said.

Lois Nevins, of the regional Marburn Curtain Warehouse chain, noticed that her customers were talking about staying home rather than going out to restaurants for the holidays. That meant a stream of customers shopping for table linens, curtains and other decorations.

The restaurant industry is still stagnant, said Bob McCarroll, owner of The Good Steer in Lake Grove. "It's not horrible, but it's certainly not what it was and probably never will be again," McCarroll said.

County officials also had a sobering outlook on the local economy.

"While the sales tax picture for now is on par with our projections, we still face major hurdles due to uncertainty about state cuts, Medicaid concerns, a continuing lag in property tax collections and a state-mandated pension wallop of $48 million that will hit us in 2011," Suffolk County Executive Steve Levy said.

Nassau County Comptroller George Maragos also noted that the economy is still fragile, making it difficult to project future sales tax revenue. But the latest figures were still heartening.

"They are very encouraging and mildly surprising, and I think it's confirmation that the economy is recovering and picking up strength," Maragos said.