Sales Tax Receipts Show Pasadenans Spending Up, But City’s Small Businesses Are Still Struggling

A sales tax update of 2022’s second quarter showed that local consumers seem unfazed by record-breaking inflation and actual sales jumped up 13.4 percent from April to June in Pasadena.

“Spending increases are still being seen nationwide. While there is a lot of angst over inflation, people are still spending. We also need to consider that cost of living increases are being seen in those items we are purchasing, as well. Spending goes up as costs rise,” President and CEO of Pasadena’s Chamber of Commerce Paul Little said.

Compared to the second quarter of 2021, Pasadena’s receipts from April through June rose 3.5 percent, according to Pasadena Finance Director Matthew Hawkesworth’s report.

“There was such a substantial increase in 2021 (over 2020) because the pandemic shut down also curtailed spending in 2020. People had money to spend and wanted to get back out in the world. That meant going to restaurants, stores, traveling and much more.”

“For 2022 we naturally saw a smaller rate of spending growth, but growth none-the-less. People are being more cautious and savings accrued during the pandemic have been spent, but people are still spending,” Little said.

Restaurants and hotels in Pasadena rebounded 23 percent, continuing their recovery from the devastating impact of the pandemic.

Little reminded that the numbers may paint a rosy picture but small businesses are still struggling.

“Businesses, especially our small businesses are still struggling. People need to visit and revisit our local businesses if we want them to keep going. A recent report said that almost 40% of small businesses in the US did not pay their full rent in October. That is very telling,” Little added.

Local vehicle dealership sales were up 14 percent despite limited inventories and the record-high prices. The building and construction group also gained 58 percent, buoyed by the reuse of a former warehouse site by a new materials supplier last year, along with inflated commodity prices.

With Russia’s invasion of Ukraine keeping world crude prices escalated, local gas service stations netted a 40-percent revenue spike as their prices at the pump jumped. General consumer goods also rose 9 percent.

“Like everyone, business owners have to pay more for gas. They are feeling the increase just as we all are,” Little said.

The City’s report showed year-over-year sales tax data comparison shows some post-COVID 19 recovery but also reflects some growth to pre-pandemic levels on a business type level.

The results also showed some slowing in taxes generated from online retailers, as consumers gradually shift back to local brick-and-mortar stores.

“My hope is that our local retailers see a robust holiday season and increased sales through the New Year. They need it, “ Little said.