Retail employs 1 in 5 Illinoisans generating over $100 billion annually in total state GDP impact. A diverse community, Illinois retail is comprised of the largest retail chains to independently-owned stores in every corner of the state. A thriving retail sector means more jobs for those who need them, economic growth, a vibrant Main Street and an increased tax base.
But what if we told you that the average per dollar profit margin for a retailer in Illinois is just Two Cents?
For every $1 spent in an Illinois retail establishment, an average of only $.02 results as profit, holding true for grocery stores, convenience stores, gas stations, restaurants, pharmacies and hardware stores. This $.02 profit margin is not only a minuscule return, but also regularly under assault – it gets stretched, and then stretched some more with the passing of each additional cost mandate from the City of Chicago and Springfield.
Since retail owners only keep a small portion of the revenue they earn, where does the additional $.98 go?
- Operating costs (taxes, fees, utilities, insurances, maintenance, advertising and other expenses)
- Labor (salary, benefits, payroll taxes, pension payments)
- Cost of goods (inventory)
Quite simply, taxes and mandates are driving retailers to a tipping point.
The litany of cost mandates from city and state governments have made an already difficult business climate even tougher for Illinois retailers. Retailers face increased arbitrary wage mandates, ever-increasing regulatory burdens, as well as sales tax and property tax policies that are among the highest in the nation. While each cost mandate is looked at by itself, retailers only have one pocket, and only so much profit, from which to pay.
Government must stop imposing policies that hurt one of Illinois’ major economic engines.