Newsletter December 22, 2022

IN THIS ISSUE

Looking back on 2022

POLICY

ECONOMY

RETAIL THEFT & PUBLIC SAFETY

SAFETY

Parking lot safety tips for the dark winter months

Look for the next Inside Washington Retail newsletter on January 5

Looking back on 2022

Renée Sunde, WR President & CEO

When we launched into 2022, we did so with great anticipation! But, as the industry sought to find its “post-pandemic normal,” economic uncertainty brought new challenges for most retailers.

While we learned to live with COVID-19 and its lingering impacts on our businesses, employees, and customers, we also became keenly aware that the past several years have fundamentally changed the retail industry today. Consumers have always driven this transformation—much of it due to the rub between technology, convenience, and personal experience.

Over the past year, retail’s resilience has been on full display as businesses innovated rapidly to meet the ever-changing needs of consumers. As we have seen significant growth in online marketplaces, many small retailers have stood their ground and remained competitive. Customers have returned to the in-store shopping experience while contactless retail has become our new reality, as curbside, BOPIS, and direct-to-customer have become industry standards. Warehousing, logistics, and last-mile delivery have also become critical components in maintaining a seamless customer experience. This innovation is now embedded in our industry and has changed how we do business in our post-pandemic world.

In 2022 our members have had to face continued uncertainty with the highest inflation the country has seen in 40 years resulting in dwindling consumer confidence. As we continue to navigate retail workforce shortages, the issues surrounding public safety and retail theft have become top of mind for retailers and a top priority for the association.

To confront these challenges, the Washington Retail Association (WR) has effectively responded to the needs of our members and stakeholders, delivering a measurable return on investment. We successfully increased the association’s profile, broadening our sphere of influence with government agencies, partners, and stakeholders across the state to help tackle the most pressing issues facing our members. In spite of the economic volatility of the past year, WR maintained 98% of members and increased membership by 12%,

Today, WR represents approximately 3500 storefronts throughout the state. Retailers of all sizes and sectors, from small businesses to regional retailers, multi-state and global, have joined together to form a more powerful voice on behalf of the retail industry. Whether it’s to maintain and grow financial stability, provide resources, or advocate politically, we have remained dedicated to delivering high-value service for our members. We are committed to this standard of excellence in the coming year. Our talented team recently produced a video highlighting the association’s good work. I hope you enjoy it.

We wish you a wonderful Holiday Season and a Happy New Year. Thank you for your support throughout the year.

All the best in 2023!

Pre-filing of bills for the 2023 session underway

The 2023 session of the Legislature convenes on January 9; however, legislators began pre-filing bills for consideration on December 5, thirty days in advance of the session. Bills are often pre-filed in hopes they are scheduled for a hearing early on, while others are simply “statement” bills indicating a legislator’s priorities.

As of December 20, there were 121 bills pre-filed. Notably, Rep. Peter Abbarno (R-20) has filed HB 1011 to repeal the long-term care trust program and payroll tax scheduled to take effect in July 2023.

On December 16, SB 5062, concerning online marketplace consumer protection caused by organized retail crime (commonly referred to as the INFORM act), was introduced by Senator John Lovick (D-44). An impressive group of bi-partisan co-sponsors has signed on as co-sponsors. They include Senator Patty Kuderer (D-48), Senator Curtis King (R-14), Senator Jesse Salomon (D-32), and Senator Shelly Short (R-7).

Finally, we cannot ignore HB 1020, filed on December 8, which would designate the Suciasaurus rex as the official dinosaur of Washington.

WR will continue monitoring pre-file bill introductions. The first week hearing schedule will be released on January 5.

Attorney General hosts business roundtable

Last week Washington State Attorney General Bob Ferguson hosted his pre-session business roundtable. This annual event provides an opportunity for the AG to share his legislative priorities and hear from the business community about their priorities and how we can work together to improve our state. About 32 folks participated in the event.

The AG and his team discussed their budget request, which includes funding to bolster the recently formed Organized Retail Crime Task Force by adding more prosecutors, investigators, and a data analyst. WR strongly supports this request and commends the AG for taking a proactive approach to addressing this growing problem.

The AG plans to introduce ten request bills. He and his team need to secure sponsors for the bills to be considered by the legislature. Some of the measures discussed included:

The Robocall Scam Protection Act to prevent unknowing consumers from becoming a victim of ID theft or other financial crimes
Mandatory warranties for used cars selling for over $700 and no more than 20 years old or over 125,000 miles
The Consumer Health Information Protection Act
Data privacy
Extreme heat utility shutoff moratorium
Medicaid Fraud Whistleblower Protection
Gun industry liability and assault weapon regulations
The process of the state Supreme Court submitting defects and omissions corrections for existing laws in the Revised Code of Washington (RCW’s)

The AG introduced his lead assistant AGs who are tasked with providing support for his legislative package as well as supporting the new and returning members of his Legislative and Policy team. WR thanks the AG for holding these productive exchanges and looks forward to working closely with him and his team on areas of mutual concern.

First half of holiday season shows strong year-over-year results

November retail sales dropped from an uptick of early holiday shopping in October but still saw solid year-over-year growth, marking a strong start to the holiday season.

Despite rising inflation and increased interest rates, consumers continued to spend on priorities in November, including household items and holiday gifts. Resilient holiday shoppers have been transitioning back to in-store shopping this year, finding more traditional holiday shopping experiences and connecting with retailers that offer excellent products and experiences at affordable budget-friendly prices.

The U.S. Census Bureau last week said overall retail sales in November were down 0.6% from October but up 6.5% year over year. Year over year increases in October were 1.3% month over month and 8.3% year over year in October, a boost from earlier-than-usual holiday shopping—likely driven by concerns inflation would continue to increase prices.

Small business lending likely to drop in 2023

As the Federal Reserve raises interest rates to reduce inflationary pressures, small businesses are likely to see their access to financing drop in the coming year. This reduced access is especially problematic because small businesses historically have difficulty qualifying for financing.

An analysis by the Federal Reserve Bank of Kansas City shows that bank lending to small businesses dropped by about 35% over the past year. “As banks scale back their lending to small businesses, and less-mature alternative lenders struggle to meet demand, small business owners will have fewer options for financing,” said Ben Johnston, chief operating officer at Kapitus, a small-business financing firm.

Federal INFORM Act poised to pass

The federal INFORM Act – Integrity, Notification, and Fairness in Online Retail Marketplaces or marketplace transparency act, HR 5502 – is a part of the recently released omnibus end-of-the-year legislative package pending before Congress.

The INFORM Acts inclusion in the omnibus package is a massive win for retailers’ fight against organized retail crime. WR and its national partners, National Retail Federation and Retail Industry Leaders Association, have worked diligently to get this policy to become the law of the land. WR strongly encourages Congress to vote favorably on the package and send the measure to the President’s desk for his signature. The legislation will become law 180 days later. Finally, online marketplaces will be required to verify third-party seller information so that consumers can make informed choices about the products they purchase.

Public safety, retail theft, and organized retail crime have plagued our country for far too long. The INFORM Act is part of a multi-pronged effort to turn the tide and bring accountability back to our society. INFORM will disincentivize the selling of stolen and counterfeit products in the shadows of the internet by providing useful information on high-volume, third-party platforms.

A national, uniform 50-state solution is the preferred avenue to address this problem. However, if Congress fails to act, WR and its members are prepared to introduce a state INFORM Act, which has already been passed in multiple states.

The measure is 4,500 pages long. House Members have until tomorrow, December 23, to vote on the measure and conclude their work before the scheduled adjournment for the holiday season.

Inslee proposes ORC Task Force Unit funding

Governor Inslee has submitted his proposed $70 billion operating budget for the biennium, which includes $2,265,000 to bolster Attorney General Bob Ferguson’s Organized Retail Crime (ORC) Unit. The proposed budget would provide for 7.9 full-time equivalent (FTE) positions.

The governor’s proposal is the first step in the budget process which will be debated and voted on by the state Legislature over several months.

WR commends the governor for recognizing the essential and critical issues of public safety, retail theft, and ORC. We look forward to partnering with the AG’s team in the year ahead.

Parking lot safety tips for the dark winter months

Reduced daylight in the winter requires extra vigilance in parking lots to mitigate common hazards such as ice, moving cars, and encountering criminals with ill intent. Ensuring safe practices is especially relevant to staff who open or close and they should take extra precautions. Employers must encourage their teams to use safe practices, such as:

Ensuring the parking lot has bright lights installed
Staying alert and aware of their surroundings, keeping an eye out for potential hazards such as potholes, ice, or other obstacles
Directing closing-shift workers to move their vehicles closer to well-lit parking spots before darkness falls
Keeping keys and other personal items in hand and ready to use
Backing into parking spots, enabling a quick departure if necessary
Avoiding shortcuts through dark or isolated areas and stick to routes that are more visible to others
Avoiding parking their cars next to large vehicles that can obstruct views and provide hiding spots for potential attackers
Not lingering outside their vehicle and immediately locking all doors after entering

If employees would feel safer by being escorted to their car by a coworker, their supervisors should trust their employees’ instincts and respond accordingly. Supervisors should call the police if an employee suspects a threat is present in the parking lot.

More information can be found here:

Rick Means, Director of Safety and Education, is available to help members with safety. Contact Rick at 360-943-9198, Ext. 118 or rmeans@waretailservices.com.

WR diversity statement

WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.

We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.