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“On Points,” with Ronnie Volkening, President and CEO of the Texas Retailers Association

Ronnie Volkening, who has served as president and CEO of the Texas Retailers Association since 2007. The Texas Retailers Association represents retail outlets of every size and sector throughout the state. To learn more about TRA, visitwww.txretailers.org.

Mr. Volkening also has managed state government affairs for Frito-Lay and during his career as well as held the position of senior director of government affairs for 7-Eleven for 15 years. A Texas native, he has an undergraduate degree from the University of Texas at Austin and earned his Juris Doctor from the University of Houston.

On the current state of the Texas retail industry …

Texas retailers are doing fairly well as the state continues to outperform the rest of the country. We’ve now had 54 consecutive months of year-to-year sales tax revenue increases, so that’s a good sign. While I wouldn’t necessarily label the growth as ‘robust,’ it has been fairly strong.

The Texas consumer is a little more optimistic than those in other regions of the country, in that our economy remains strong and our unemployment rate is relatively low compared to other states.

We still see some concern and trepidation about the future and that may be reflected in putting off the purchase of big ticket items … sales in that category may not be as healthy as we’d like to see. Also, there have been food prices increase, and they are projected to continue. These increases have diminished some of the consumer’s spending power, and that’s having somewhat of an effect.

The school sales tax holiday in August provided a shot in the arm for retailers and a blessing for parents of Texas schoolchildren, who were able to make a lot of purchases to get ready for the new school year. That’s always a good indicator of how strong the rest of the year will go.

On hiring and job growth in the retail sector …

While many retailers are reporting stronger year-over-year sales; that does not always create a great deal of hiring. There is both a lingering concern about the overall economy, as we look over our shoulders to the recession, as well as uncertainty about regulatory activity coming from the federal level. This uncertainty makes it difficult for employers to project their future business growth and needs.

There are other factors that are perhaps giving retailers some pause in making decisions about hiring in big numbers. For example, online sales are taking a larger share of the total market share in recent years. Additionally,  activity in the political world, in terms of discussions suggesting increasing the minimum wage and increasing the sales tax, are making retailers be very careful about making commitments to hire new folks.

Concerns regarding healthcare and minimum wage weigh equally on the minds of hiring departments, in terms of the challenge for employers to meet the healthcare mandates and sustain a good and strong workforce.

On technology’s impact on the retail sector …

The ever rapid rate of change in technology empowers consumers to have different ways to shop, but it also presents challenges for retailers who want to stay on the cutting edge of the way marketing works in the 21st century. This technology change also raises concerns about data security. We’ve seen data breaches increase across all business sectors which will necessitate costly technology changes in the infrastructure inside retail stores and financial institutions.

On getting merchandise – and shoppers – into stores

Historically, Texas has enjoyed an adequate transportation infrastructure that allowed for timely and efficient shipments of products to the marketplace.

But with the incredible population growth we’ve experienced in Texas, decisions about improving our roads must become a priority. We need government to be responsive to the needs of the entire community and that includes supporting infrastructure enhancement – both for water and for transportation. It is not inconsistent with fiscal responsibility to look at infrastructure enhancement as necessary to accommodate our rapid growth of our population. 

We need to make smart and reasoned decisions about spending on our transportation infrastructure because it is an essential part of retail to be able to deliver the goods to the customer. We are very cognizant of the fact that we need to look at those issues responsibly and make smart decisions about expenditures. And just saying ‘no’ to any new expenditure is no longer a viable or even responsible response to the challenges Texas faces.

Source: Texas Comptroller, The Texas Economy