Newsletter — November 7, 2024 | |
The Washington Retail Association extends its heartfelt gratitude to our veterans for their dedication, sacrifice, and steadfast commitment to protecting our freedoms. This Veterans Day, we honor the invaluable contributions of veterans in our communities, businesses, and workforce. Their resilience and leadership inspire us daily. Thank you, veterans, for your service and courage. | |
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POLICY
ECONOMY
POLITICAL NEWS
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
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Paid Leave premium rate increase to 0.92% in 2025 due to high usage
The Washington State Employment Security Department (ESD) has announced a premium rate increase for Paid Family & Medical Leave (PFML) starting January 1, 2025, from 0.74% to 0.92%. This change reflects a rising demand for benefits, resulting in an unprecedented $1.35 billion in payouts to over 175,000 workers so far in 2024.
Since the PFML program began collecting premiums in 2019, the rate has increased by 130%. Actuarial projections indicate that the premium rate is expected to reach its statutory cap of 1.2% by 2028.
The premium, shared between employers and employees, will maintain a similar division as in 2024, with employers contributing 28.48% and employees 71.52%. Small businesses with fewer than 50 employees remain exempt from the employer portion, though they must collect or cover employee premiums.
Washington’s Paid Leave program, funded by these premiums, recalculates its rate annually based on program use. An increase in claims, combined with a legislative investment of $200 million to address a 2023 deficit, initially allowed for a lower premium rate in 2024. However, premium revenue still fell short of rapidly increasing benefit payouts, driving the need for a rate hike in 2025.
This increase will help sustain the program, as more workers become eligible for benefits amid rising post-pandemic employment.
Learn more
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Action needed: Support the Credit Card Competition Act (CCCA)
Business Owners, please take action by Friday, November 8 to help pass the federal Credit Card Competition Act (CCCA).
The U.S. Senate is currently considering S-1838, the CCCA, which aims to restore competition to credit card fees, potentially saving consumers and businesses billions of dollars. Senators need to hear your voice today!
How You Can Help:
Send a letter to your Senators urging them to support the Credit Card Competition Act.
Click here to take action now
Thank you for your advocacy!
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Holiday spending poised for record highs, driven by e-commerce
The National Retail Federation (NRF) anticipates that holiday retail sales in 2024 will reach a new record of $979.5 billion to $989 billion, despite a more cautious consumer outlook. This projection represents a 3.5% growth over last year, marking the slowest increase in six years but still reflects positive momentum.
E-commerce is expected to be a major contributor, with online and other non-store sales projected to range from $295.1 billion to $297.9 billion, up from $273.3 billion in 2023. However, this year’s 26-day shopping period, shortened by nearly a week compared to last year, and economic factors such as hurricanes Helene and Milton may shape spending patterns.
NRF Chief Economist Jack Kleinhenz remains optimistic, stating that "household finances are in good shape and an impetus for strong spending heading into the holiday season," though spending may lean toward caution. Adobe predicts that online sales will see a significant boost from promotions and buy now, pay later (BNPL) options, which are forecasted to drive $18.5 billion in spending—an 11.4% increase over last year.
As retailers like Target prepare for the season by hiring 100,000 seasonal employees, the industry is gearing up for a robust holiday shopping period fueled by online growth.
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The business tax burden in Washington is above the national average
By: Washington Research Council
State business and occupation (B&O) tax collections are up 258% since 2000. But businesses also pay sales, property, and many other state and local taxes. Indeed, businesses paid 49.7% of total state and local taxes in Washington in fiscal year 2022, according to a report from the Council on State Taxation. (Nationally, businesses paid an average of 44.6% of state and local taxes.)
Washington businesses paid $10,100 in state and local taxes per employee. This was the 11th highest amount among the states, and 18.8% above the $8,500 average paid nationally. Meanwhile, according to the Tax Foundation, Washington’s tax competitiveness is the sixth worst in the nation.
Washington businesses face a heavy tax burden compared to businesses in other states. Taxes are not the only factor for businesses deciding where to set up shop, but they are part of the consideration. Washington’s competitiveness will worsen if the business tax burden continues to grow.
Read the Report
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State election preliminary results – A retail perspective
Tuesday’s election was significant at the national, state, and local levels, with Washington Retail participating in state legislative races through our political action committee.
Below are the preliminary election results. Please note that the election won’t be officially certified by the Secretary of State until December 5, as thousands of votes are still being counted.
- Bob Ferguson, our current Attorney General, won the election for Governor. Stepping into his role as the new Attorney General will be Nick Brown.
- In the state legislature, Democrats are likely to gain two additional seats in both the Senate and the House. A close race in District 10 (Whidbey and Camano Islands) sees incumbent Ron Muzzall trailing challenger Janet St. Clair by just 153 votes. This would bring the seat counts to: House Democrats 60 - House Republicans 38, and Senate Democrats 31 - Senate Republicans 18.
- Four initiatives were also on the ballot, with only one currently leading in early tallies. Initiative 2066, which supports energy choice by preserving the use of natural gas for businesses and consumers, is ahead with 51% of the vote to 48%, with many more ballots still to be counted.
WR looks forward to working with our new Governor, Attorney General, and the entire legislature to strengthen and grow the retail industry.
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Seattle Councilmember Tanya Woo trails her challenger
Citywide Councilmember Tanya Woo emerged from election night well behind her labor-backed challenger, Alexis Mercedes Rinck. Woo, who was appointed to the open Council position in January, fell behind Rinck by a 57% to 43% margin. Given the history of the most liberal candidates building their vote share in later ballot counts, Rinck seems certain to join the City Council soon after the election results are certified.
Labor leaders are determined to reverse the Council’s shift to moderate pragmatism following the 2023 election. They have their sights on Council President Sara Nelson, who is up for reelection in 2025. The winner of the Woo – Rinck race will also have to defend the seat next year as all citywide positions (including Mayor and City Attorney) will be on the ballot.
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Left to right: WR Senior Vice President of Policy & Government Affairs, Mark Johnson and Senator Joe Nguyen (D-34, West Seattle) | |
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WR attends senate democrat fundraiser
WR recently attended one of the last 2024 election political fundraising events hosted by the Washington Senate Democratic Campaign. The event saw several Democratic legislators in attendance, including Senator Joe Nguyen (D-34, West Seattle), Chair of the Environment, Energy, and Technology Committee.
As a non-partisan lobbying trade association, WR is dedicated to building relationships with both current members and candidates from all parties during election season. This effort helps ensure that state legislators understand and support the retail industry through legislative sessions and beyond.
We extend our congratulations to the election winners this week and look forward to working collaboratively to enhance the retail landscape for shoppers, employees, and shop owners across Washington.
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Congressman Adam Smith tours Macy’s at Southcenter Mall to address organized retail crime
Congressman Adam Smith (D-9) recently joined the WR Government Affairs team, Southcenter Mall representatives, and Macy’s management for an in-depth tour of Macy’s Southcenter location. The tour, Led by key Macy’s staff, including incoming WR Board of Directors Chair Opio Dupree (VP. Government & Public Affairs), focused on the pressing issue of organized retail crime (ORC).
During the visit, Congressman Smith gained firsthand insights into the impacts of ORC on local retailers and the proactive strategies being implemented to combat it. The tour highlighted the toll ORC takes on daily operations, employee safety, and customer experience. With ORC rising nationwide, collaboration between retailers and policymakers has become essential to addressing these threats to inventory and security.
WR asked Congressman Smith to consider co-sponsoring the Combating Organized Retail Crime Act (CORCA, S. 140/H.R. 895). This bipartisan legislation would establish a federal Organized Retail Crime Coordination Center to enhance collaboration between federal, state, and local law enforcement for more effective responses to ORC networks. CORCA also includes updates to the U.S. criminal code to better address the realities of ORC. Congressman Smith’s support for this bill would play a vital role in fostering safer shopping environments and strengthening the resilience of Washington’s retail economy.
With backing from over 150 bipartisan co-sponsors, CORCA is a significant step toward protecting businesses and reducing the economic and social impacts of ORC on communities.
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Gig Harbor’s business check program curbs retail theft in innovative ways
Each year, Washington state retailers lose about $3 billion to theft, and many cities are seeking solutions. In Gig Harbor, the Business Check program has been an effective tool in combating shoplifting since its inception in 2021. The program allows store employees to request a “business check” through a quick 911 call if they observe suspicious behavior. Upon availability, officers arrive, often deterring would-be thieves from acting. Chief Kelly Busey credits the program with helping reduce retail theft, despite challenges in gathering precise data.
Mark Johnson, Senior Vice President of Policy and Government Affairs for the Washington Retail Association (WR), supports this approach and emphasizes the severity of the issue: “Retailers’ biggest problem is organized retail theft, not petty shoplifting.” According to Johnson, organized retail theft involves criminals reselling stolen goods to fund larger illegal activities. “That’s what is killing us financially,” Johnson remarked.
While the Business Check program has shown promise, Johnson acknowledges that it’s not feasible for all jurisdictions due to resource limitations. However, he applauds Gig Harbor's proactive measures, stating that it’s a step in the right direction for both prevention and community safety.
The News Tribune
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Bed Bath & Beyond returns with Kirkland’s partnership
In a strategic revival of the iconic Bed Bath & Beyond brand, Kirkland's Home and Beyond Inc. have joined forces to bring small-format Bed Bath & Beyond stores back to neighborhoods. The partnership, announced Monday, includes plans to open up to five pilot locations, with Kirkland's serving as the exclusive operator and licensee of these new stores. Kirkland's will also explore opportunities for Bed Bath & Beyond shop-in-shops within its existing retail spaces.
Beyond Inc., which acquired Bed Bath & Beyond’s intellectual property in 2023 following its bankruptcy, is investing $25 million into Kirkland's in a combined debt and equity transaction. This includes a $17 million debt financing deal and $8 million in stock purchases. Additionally, a seven-year collaboration agreement will grant Beyond a revenue-based collaboration fee, incentivizing e-commerce growth and in-store sales under the Bed Bath & Beyond banner.
This partnership leverages Kirkland’s brick-and-mortar expertise and supply chain improvements to rejuvenate the Bed Bath & Beyond brand. Both companies anticipate cost savings, expanded product offerings, and enhanced customer loyalty. Beyond Inc. has also announced a separate $40 million investment in The Container Store as part of its broader growth strategy.
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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.
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Renée Sunde, President/CEO — 360.200.6450 — Email
Mark Johnson, Sr. VP of Policy & Government Affairs — 360.943.0667 — Email
Crystal Leatherman, Dir of Local & State Government Affairs — 360.200-6453 — Email
Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email
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