Tax-free weekend revs stores, customers

In tight economic times, careful shopping will be key

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CORRECTION

In a front-page story July 31, the total value of federal stimulus checks that have been sent to taxpayers was reported incorrectly. The U.S. Treasury has sent about $92 billion in stimulus payments.

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At one minute past midnight tonight, cash register bells will ring as the state's seventh annual sales-tax weekend starts, and budget-sensitive shoppers will be ready.

Many have already identified the items they plan to buy, compared prices and mapped out their shopping strategies.

While the National Retail Federation reports that parents intend to spend an average of $600 on school supplies, up $30 from last year, many intend to shop carefully.

Gas prices have retreated a bit in past weeks but remain high. With costs soaring for many household items, skipping the 6.75 percent state sales tax on computers, school supplies, clothing and other products is an attractive lure.

Retailers hurt by the sluggish economy will fight hard to get their share by offering a slew of deals to entice penny-pinching shoppers, including 1-cent sales, 3-for-1 promotions and deep discounts on clothes, computers and school supplies.

Elizabeth Roberson of Zebulon and her husband, Morgan, typically do back-to-school shopping for their three children during the tax-free weekend. But both lost their jobs this year -- she was laid off by GlaxoSmithKline and he by Siemens Power Transmission & Distribution. Budgeting and planning are critical.

They were in Best Buy on Tuesday shopping for laptops that they plan to buy this weekend. The tax-free holiday runs through midnight Sunday.

"We are scoping everything out first," said Elizabeth, who carried around sales papers as she compared prices and features. "In the past we would just jump in the car and go to the stores. This year, we are trying to plan better to take advantage of all the deals."

Even in a gloomy economy, the Retail Federation estimates that national spending for kindergarten through 12th grade this year will reach $20.1 billion.

Economists estimate that some of that spending will be bolstered by states' tax-free holidays and by the recent tax-rebate checks that consumers have been saving.

Others say that most households have already spent the rebate money to help offset soaring energy prices and other rising cost-of-living expenses.

"More than likely, if the retailers haven't benefited from the $130 million worth of federal stimulus checks that have gone out over the past three months, they won't get much out of this," said James Smith, chief economist for Parsec Financial Management in Asheville.

Smith said consumers are still too worried about food and gas prices to spend as freely as they did in the past.

Michele Graves of Raleigh said she is spending less this year on clothes for her 12- and 8-year-old daughters. Graves said she doesn't plan to drive to outlet malls because of high gas prices.

This year's retail winners will likely be discount stores such as Wal-Mart, which is running radio ads promoting its big back-to-school discounts tied to the tax-free weekend.

According to the Retail Federation's recent survey of 8,300 consumers, 73 percent said they will head to discount stores this school season, while 57 percent said they will go to department stores. Fewer said they plan to go to clothing, electronics, office supply and drug stores.

And retailers are working harder to lure customers.

Longer hours

As in years past, many stores are opening earlier and closing later. Stores such as Best Buy and Wal-Mart will have supply lists from schools and colleges.