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Sales Tax Cited as Reason for Sears, Kmart Closings

  • Dec 29, 2011 | Susan McLain

Burt Flickinger III, managing director of Strategic Resource Group recently indicated that “…increased competition from online competitors, has made it difficult for brick-and-mortar retailers such as Sears and Kmart,” according to a CNN report.

Continuing, he says “There’s been a significant shift online because of the sales tax savings. Consumers see it as an instant discount and most online retailers are delivering for free. That puts Sears and other land-based retailers at a significant disadvantage for the foreseeable future.”

Reported by Christian Science Monitor, Credit Suisse retail analyst Gary Balter told CNBC that Sears has “…done a very nice job online, but they can’t get people into the stores, and that’s where most of their asset base is.” Part of the struggle is enticing customers to come in versus visiting brick-and-mortar competitors such as Best Buy and Target. According to Sears Holding the “…decline reflects decreases in the consumer electronics and apparel categories,” for Kmart, and “Sears Domestic’s quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories.”

As a result of Sears and Kmart’s apparent struggles with online and brick-and-mortar competition, the plan is to close a little over 3% of all stores, focusing on the under-performing stores.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”