New Hampshire retail industry now in recovery

New Hampshire’s retail industry is finally recovering from the great recession, as is obvious from both sales and employment, thanks partly to America’s slow economic recovery and partly to our northern neighbors.

“Canadian tourists are coming to New Hampshire in record numbers,” said Nancy Kyle, director of the New Hampshire Retail Merchants Association, during a presentation Thursday before the Greater Nashua Chamber of Commerce. “The outlets at Merrimack and Tilton are starting to market to Canada, and that went very well.”

Kyle was one of three panelists at the Citizens Bank Business Insider breakfast, which discussed the retail industry.

Also on the panel were Nashua Mayor Donnalee Lozeau and Elaine Devine, general manager of Merrimack Premium Outlets, whose June 2012 opening was the biggest success story for New Hampshire retail in several years.

Kyle pointed to several factors for this, notably a sharp increase in the value of goods that Canadians can buy in the U.S. and take back home, duty-free.

After a 24-hour visit, she said, Canadians can now take back $200 Canadian worth of goods without paying import duties, as compared to a previous limit of $50. In a 48-hour visit, the duty-free limit is now $800 Canadian, up from $400.

Combined with a tempering in the price of gasoline and a reasonable exchange rate — the two countries’ dollars are worth virtually the same — this has made it easier for people from Quebec and Ontario to visit sales-tax-free New Hampshire.

The tone of the session was cautious optimism.

“Downtown merchants told me this was their best Christmas in years,” said Lozeau.

“Some retailers had a hard time getting help over the holidays,” said Kyle. “We haven’t seen that situation since 2007-08.”

Not surprisingly, Kyle said the most important step in keeping the retail industry going is to avoid adding a sales tax. Even the prospect of Massachusetts lowering its sales tax, as has been proposed by Mass. Gov. Deval Patrick, won’t reduce the huge boost that being tax-free gives to cross-border sales, she said.

“There’s a psychological advantage from no sales tax,” Kyle said. “Nobody’s going to go far for a 71/2 percent discount, but (avoiding) a 71/2 percent sales tax is a different matter.”

She pointed to statistics that say per-capita retail sales in New Hampshire average $19,238, roughly half again as much as the national average of $13,036 or the Massachusetts average of $13,657.

Retail is the largest industry employer in the state, Kyle said, although she noted that health-care employment is growing faster.

The Merrimack Outlets exemplify the push to draw more shoppers from far away, Devine said, noting that information is provided in five languages — French, German, Chinese and Japanese as well as English — and that many staffers have translation apps on their phones to aid other foreign visitors.

In her talk, Lozeau pointed to the sidewalk improvements as a major initiative to make the downtown area more open to shoppers and visitors.

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