Newsletter April 29, 2021 IN THIS ISSUE Governor Inslee considers new bills and post-session county rollbacks Legislature adjourns after adding taxes, securing pandemic relief CDC relaxes rules on masks Wenatchee honors Bruce Beckett Spending on Mom will grow this year, survey shows Advice from our partners on loyalty programs Younger shoppers demand a clean digital shopping experience How good is your personal preparedness?

Governor Inslee considers new bills and post-session county rollbacks Renée Sunde, President & CEO As the state Legislature adjourns after a long 105-day virtual session, the retail industry is still reeling from legislation that will add new taxes and lead to a higher cost of living for many residents and business owners. Given the uncertainty of the pandemic and the state’s surprising revenue recovery, Washington Retail did not support the increase in taxes that project to grow the state budget from about $5 billion to $59 billion. As revenues rebounded, our state led the nation with a 12% two-year increase in revenue collections starting in pre-pandemic 2019, according to research by the Pew Research Center. As federal relief funds disappear, the state budget increase will now depend upon a new 7% tax on capital gains of $250,000 or more that is in limbo. The conservative Freedom Foundation in Olympia already has filed a lawsuit maintaining it is an illegal income tax.  These outcomes are especially difficult given the recent announcement of county rollbacks forcing businesses back to Phase 2 of the coronavirus recovery plan. As COVID-19 infection and hospitalization rates have begun to increase again, there’s talk of further recovery rollbacks in additional counties across the state. Business and industry leaders have been working tirelessly for more than a year to adhere to government requirements and meet consumer demand while keeping their employees and customers safe. But in spite of these successful efforts and increased vaccinations, the path to full reopening is still very unclear. For well over a year, Governor Inslee has maintained emergency executive orders that have forced restrictions and closures for many businesses. Legislators have learned first-hand about the strengths and weaknesses of the state’s current recovery effort under what some have called “one-man rule” by Governor Inslee. But even with bipartisan efforts, the legislature overruled placing a limit on emergency powers that would require a vote by the legislature, 60 days after declaration. A better balance of powers would allow for input from constituents as decisions are made that affect both lives and livelihood. It’s way past due for government officials and private industry to work together in a cooperative partnership to manage future COVID recovery.

Legislature adjourns after adding taxes, securing pandemic relief Mark Johnson, Senior Vice President of Policy and Government Affairs The 2021 Legislature adjourned Sunday night after completing a first-of-its-kind, 105-day virtual session. The biggest and most significant piece of legislation was the two-year operating budget totaling $59 billion – a 12.6 % increase from the last biennium. Unfortunately, the new budget relies heavily on using the “rainy day” fund to balance – setting the state up for a potential shortfall in the future. Of note to retailers was the adoption of a capital gains tax of 7% on proceeds over $250,000. The measure was promoted as only impacting the wealthiest Washingtonians. This is false. Small retailers that sell their business, often as part of their retirement plan, will be stuck paying the state an additional 7% - after already paying years' worth of property tax, business and occupation tax, employee taxes, and collecting the state sales tax. This bill is the wrong direction for our state. WR opposed the measure. Two other monumental tax increases are coming in the form of a low carbon fuel standard and cap-and-trade laws that will add to our already high fuel tax rate. This will impact almost every aspect of our lives. The costs of goods and services will increase as delivery prices will have to go up. The cost to get to work or go on vacation will go up. Most unfortunate is that these new taxes will hurt hard-working lower wage earners in our state who often are forced to drive greater distances in less fuel-efficient vehicles to get to work. These regressive taxes are the wrong way for Washington state. WR opposed these bills. Read more.

CDC relaxes rules on masks Fully vaccinated people now can safely remove masks in certain outdoor situations, according to new coronavirus guidance this week from the Centers for Disease Control and Prevention. CDC Director Rochelle Walensky announced the new relaxed guidance earlier this week. The new guidelines pertain to individuals who received both required Pfizer or Moderna COVID-19 shots or the single Johnson & Johnson shot at least 14 days prior. She urged those who have been hesitant to get vaccinated to improve prospects for being able to resume more pre-pandemic activities. Walensky said the relaxation comes as infections, hospital admissions and deaths have begun to decrease nationally due to increased vaccinations. According to the update on the CDC website: Outdoor visits and activities pose minimal risk to fully vaccinated people themselves or those around them. Small, private gatherings and visits to public indoor spaces likely represent minimal risk to fully vaccinated people. Therefore, the level of precautions taken should be determined by the characteristics of the unvaccinated people present, who remain unprotected against COVID-19. In indoor public spaces, the vaccination status of other people or whether they are at increased risk for severe COVID-19 is likely unknown. Therefore, fully vaccinated people should continue to wear a well-fitted mask, cover coughs and sneezes, wash hands often, and follow any applicable workplace or school guidance. Masks should continue to be worn in crowded outdoor settings such as sporting events. Fully vaccinated people should not visit or attend a gathering or visit public settings if they have tested positive for COVID-19 in the prior 10 days or are experiencing COVID-19 symptoms, regardless of vaccination status of the other people at the gathering. Click here for a full summary of the latest CDC advice regarding masks. Source: CDC

Wenatchee honors Bruce Beckett Linda Haglund calls our own contract lobbyist and Gig Harbor resident Bruce Beckett a “shirttail relative” of all downtown Wenatchee retailers. “We’re grateful for Bruce,” said Haglund, Executive Director of the Wenatchee Downtown Association. She and Wenatchee Mayor Frank Kuntz recently awarded Bruce the 2020 Community Resource Award in recognition of his efforts on behalf of the community and Wenatchee retailers during the COVID-19 pandemic. In addition to his work with the Washington Retail Association, Beckett represents the Wenatchee Valley Chamber of Commerce. In that role, he works on behalf of employers across Chelan and Douglas Counties. His efforts dovetailed with the priorities of Washington Retail this past year, including: Securing operating guidance from Governor Inslee’s team Advocating for COVID-19 relief for retailers deemed “non-essential” in the early phases of the pandemic Securing grant funding to assist smaller retailers and ensuring these businesses receive relief from increases in Unemployment Insurance taxes  Washington Retail and Wenatchee were also aligned in supporting changes to Washington’s Mainstreet Tax Program to benefit both downtown retailers and historic downtown Wenatchee.  “We needed Bruce to be that voice (with legislators) in Olympia,” Haglund said. “We didn’t always like what he had to tell us, but we needed to hear it.” Read more.

Spending on Mom will grow this year, survey shows Mother’s Day spending this year will rebound to a record $28.1 billion, up $1.4 billion from last year’s coronavirus lockdown conditions, reports the National Retail Federation. The survey about the May 9 holiday, performed April 1-9, involved 7,818 people age 18 and older who were asked about their spending plans. Shoppers said jewelry and electronics items were the primary drivers for the expected spending increase. Jewelry may account for 59% of the $1.4 billion increase while electronics account for 28% of it, results show. “There is a lot of consumer optimism around Mother’s Day this year as more people are getting vaccinated and stimulus checks are being distributed,” NRF President and CEO Matthew Shay said. “With safety guidelines at top of mind, consumers are planning to be with family, are making travel plans and organizing a special brunch or outing.” Read more.

Advice from our partners on loyalty programs Did you know that you can grow your store’s profits by earning shopper loyalty from just 5% of your customers? That’s the kind of strategy our partners at SpotOn can help you achieve with their array of digital devices. SpotOn has listed common mistakes to avoid if you’re starting or running a loyalty program. They include: Moving beyond plastic loyalty cards with bar codes to digital products available through SpotOn Going beyond rewarding the same rewards to all shoppers by using tiers that are more generous with your most long-term, loyal shoppers Making sure your rules to qualify for gifts are easy to understand and don’t require math to figure them out Not putting expiration dates on your loyalty points or changing the rules for qualifying. Both will likely discourage shoppers from participating. You can learn more about SpotOn at your own pace by visiting the website where you can arrange free demonstrations, book a meeting with a consultant and read about the success stories of customers and the testimonials they’ve provided for public review. Or, just call or email our contact, Patrick Wiltsey, Director of Business Development, at 303-835-3217 or pwiltsey@spoton.com.

Younger shoppers demand a clean digital shopping experience Brand loyalty can be fleeting among younger digital shoppers, a new survey has found. Many in their late teens and early 20’s in Generation Z began shopping online during the pandemic. Nearly two-thirds of the more than 1,000 “digital natives” surveyed said they hope to continue buying almost everything online with their computers or phones. But the shopping experience retailers provide needs to be smooth. The survey’s main findings: Loyalty is a one-way street: Retailers have little room for error on their websites. Sixty-two percent of those surveyed were unwilling to give a retailer a second chance if they were frustrated with an online site. If an online store is out of stock, 74% of those surveyed said they would move to shopping with another retailer. A majority of 83% said it views online shopping as an experience rather than a transaction. Eighty percent say retailers able to deliver in less than 24 hours are appealing. Gen Z wants retailers to ensure that their websites work well on mobile devices, remember their preferences and provide personalized suggestions. Read more.

How good is your personal preparedness? If a severe disaster were to happen, as a business owner you would already be plenty busy worrying about how to get back up and running as soon as possible. But don’t forget that you need to also have a plan for your family to be personally prepared the best you can. Once the home front is OK, you can get back to the challenges of operating your business.  A personal preparedness plan would be quite similar to a business plan, just focused on the home front. It would include these elements: Mitigate: What can you do to make your personal environment safer? Communicate: How will you communicate with loved ones? Do you have an outside the area contact set up? This is important to let family and friends know you’re OK or may need help. Prepare: What are the supplies you need and where will you store them? Don’t forget to arrange for those with special needs in your family; seniors, infants/children and pets. That’s why we recommend that you check out the Prepare in a Year guide geared to assist your preparedness by taking one step a month for the next 12 months. How is your backup water supply? We all remember from earlier in the coronavirus pandemic when toilet paper was a challenge to find. Yet both of these items have been on the recommended emergency kit list for years. RS SafetyTV has some great videos on how to prepare. Retro members can access even more information in the Safety Library in the Emergency Preparedness section. If you already have a plan, take some time to review it and update it as needed.  WR’s Rick Means, Director of Safety and Education, is available to members to help draw up safety plans and suggest topics for safety meetings. Contact him at 360-943.9198 x118, 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.

Washington Retail Staff

Renée Sunde President/CEO 360.200.6450 Email Rose Gundersen VP of Operations & Retail Services 360.200.6452 Email Mark Johnson Senior VP of Policy, Government Affairs 360.943.0667 Email Jim Szymanski Director of Communications 360.753.8742 Email

www.WashingtonRetail.org

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