Businesses report slumping sales
Some local business owners are seeing stagnating or decreasing revenues, despite the fact that Rifle rounded out the first quarter with a 2 percent increase in sales tax revenue.
“It’s not good,” said Frank Lee, owner of Car Quest Auto Parts, citing the slowdown in the oil and natural gas industry as the main reason for plummeting sales. While the degree varied, other business owners repeated Lee’s remarks. “There’s a lot more quiet days,” said Don Locke, owner of Rifle Lock & Safe.
City financial reports for the first three months depict roller-coaster-like revenues from sales tax. January started the year with an overall 2 percent decrease. February followed with a 14.3 percent increase, led by a 36 percent increase in general retail totaling $289,321 for the month. The quarter ended with a 5 percent decrease in March, and $1.8 million in revenue for the first three months combined. At that rate, the city would collect around $7.3 million — $3 million more than what was budgeted for in 2015. However, predicting short-term trends when it comes to sales tax revenue is a dangerous undertaking, said Marcia Arnhold, interim finance director. A number of variables ranging from the weather to employment levels can have significant impacts on spending habits and consumer confidence.
Weather has been a big factor, said Brittany White, bookkeeper for Big Kids Corner Bar in downtown Rifle. Business at the bar is down roughly 25 percent compared to last year, according to White. People just do not want to go out when it is cold and raining, she added. Overall, tax revenues from bars and restaurants were down 2 percent for the first quarter.
WingNutz Bar & Grill owner Grady Hazelton was the only business owner interviewed for this story who reported measurable growth, at 8-10 percent each month in the first quarter. While business is better than expected, Hazelton said he is noticing that some of the familiar faces no longer come in, a fact likely attributable to layoffs in the oil and gas industry.
Linda Trujillo, owner of Rocky Mountain Liquor, echoed Hazelton’s thoughts. Business is up at Rocky Mountain Liquor — tax revenue for liquor store sales was up 20 percent in the first quarter — but the slowdown in oil and gas is very apparent, she said.
“Some of my guys are telling me if (oil and gas companies) offer 32 hours they’re taking it,” Trujillo said. “It’s going to be a rough year.”
While Arnhold was not in her current position at the time the 2015 budget was drafted, she said the uncertainty in the energy sector was considered when the city budgeted $4.02 million — roughly $23,000 less than what was collected in 2014 — in sales tax revenue for 2015.
“We want to be accurate,” Arnhold said. “I’ve never thought it was a great idea to underestimate revenues because you tend to cut services to citizens that you might not have to. On the other hand it’s our tendency to take a conservative approach.”
Much like its position on Interstate 70, the current revenue situation puts Rifle between two extremes in Glenwood Springs and Parachute. Rifle’s revenue growth is not as strong as Glenwood Springs, which reported a more than 10 percent increase in retail sales tax revenue for the first quarter, but the numbers are far better when compared to Parachute, where town officials are taking steps to offset a more than 30 percent decrease in sales tax revenue. To have any sales tax growth is a net positive for the city, Arnhold said.
Still some business owners find themselves taking additional steps to make up for decreased revenues. Jeannie Schroder at Trendz Clothing Co. said she plans on being a vendor at large events outside of Rifle, such as Country Jam in Grand Junction, to bring in additional revenue. Business is not terrible, she said, but more is needed to maintain previous profit levels. If sales were up there would not be a need to take the store on the road, she added.
It’s nothing new in Rifle, Locke said, noting that it was a different downturn decades ago that led him into the vacuum repair business. “You find a need and fill it,” he said. Locke avoided comparing the current situation to previous “busts,” but said it is hard not to notice the decline.
“You can tell when the oil and gas leaves,” Locke said. “People just aren’t coming through.”
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