Illinois retailers have launched a statewide campaign aimed at shining the spotlight on how little profit margin exists — 2 cents — on every dollar spent in an Illinois retail establishment.
The Two Cents movement will highlight an industry increasingly burdened with a litany of cost mandates at federal, state, and local level resulting in scaling back employee hours, laying off employees and limiting overall growth. Ironically, many of those proposals aimed at growing jobs and salaries are having the reverse effect.
For every $1 spent in an Illinois retail establishment, only about two cents results in net profit, holding true from grocery stores and gas stations, to pharmacies and hardware stores. The additional $.98 pays the costs of salaries, inventory, utilities, and other traditional expenses, but in Illinois it is the inordinate number of taxes, fees, and new regulations that allows for the most competitive economic sector to have the narrowest margins.
“For every dollar received in retail, the business owner needs to allocate revenue to cover costs,” said Rob Karr, president and CEO of IRMA. “The couple cents left is not enough to help existing employees, hire more employees, expand operations or help our overall economy. The fact of the matter is the barrage of policy initiatives that sound good on paper are negatively impacting neighborhood businesses and the employees who work there.”
Retailers in Illinois know all too well the heavy costs of doing business.
The real cost of doing business in Illinois is riddled with compounded mandates that continue to add up for retailers. Individually, issue-specific advocates look at each issue singularly — increase the minimum wage, tobacco tax, sales tax, motor fuel tax, scheduling restrictions, and paid leaves — but for the Illinois retailer responsible for paying for all of these items collectively, it’s hard to survive.
Examples of mandates and tax policy impacting retailers:
- Reductions in state vendor collection allowances
- Proposed paid leave bills that create hardships for retailers from a staffing standpoint, and causes retailers to strive to keep employee levels low so as not to trigger additional mandates
- Statewide minimum wage increase proposals, and on its way to $13 in Chicago
- Suggested implementation of a sugar-sweetened beverage tax, both statewide and in Chicago
- Affordable Care Act mandates that increase employer costs and results in employers trying to stay under the 50-employee threshold
- Federal Fair Labor Standards Act resulting in increased industry regulation and increased overtime costs on employers
“We feel there’s no better time than now to lower the cost of doing business in Illinois,” Karr said. “It’s time for Illinois to recognize the hardships plaguing our sector. Our wish is for the extra hands on our bottom line to let go, and to allow Illinois retailers to do what they do best: generate business and generate a significant share of the state’s tax revenue.”