HdL Sales Tax Report for CY2023 Q2 Saleswww.hdlcompanies.com | 888.861.0220
Q2 2022*
Q2 2023*
Legend
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
SALES TAX BY MAJOR BUSINESS GROUP*Allocation aberrations have been adjusted to reflect sales activity
General
Consumer
Goods
Restaurants
and
Hotels
County
and State
Pools
Fuel and
Service
Stations
Autos
and
Transportation
Food
and
Drugs
Building
and
Construction
Business
and
Industry
TOP 25 PRODUCERSCITY OF ENCINITAS HIGHLIGHTS
Published by HdL Companies in Fall 2023
SALES TAX UPDATE
CITY OF ENCINITAS
2Q 2023 (APRIL - JUNE)
7 Eleven
76
Alila Marea Beach Resort Encinitas
Best Buy
Chevron
Dick’s Sporting Goods
Encinitas Ford
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
IFE Marketing
Pacific Coast Grill
Ralphs
REI
Scotty Cameron Gallery
Shell Car Wash & Detail
Target
TJ Maxx
Total Wine & More
Trader Joe’s
Valero
Vons
Vuori
Walmart Supercenter
Encinitas’ receipts from April through
June were 8.4% below the second sales
period in 2022. Excluding reporting
aberrations, actual sales were down
11.3%.
General consumer goods saw weak
collections at specialty, home furnishing,
and electronic-appliance stores as
consumers have some hesitancy
about the direction the economy is
going during this period. State-county
pools, the City’s third largest revenue
classification, was negative posting
a 11.3% drop resulting from large
declines in fuel-service stations and
auto-transportation.
Falling fuel prices that peaked in the
second quarter of 2022 continue to
compress services station profits.
The latest departure of an auto-
transportation merchant in this sector
had begun to create dismal revenues.
As patrons enjoy eating out, casual and
fast-casual dining restaurants continue
to benefit from positive gross receipts.
The food-drug sector had strong
revenues from grocery markets and
drug stores. Likewise, the business-
industry group saw modest growth by
business service vendors.
Net of aberrations, taxable sales for
all of San Diego County declined 1.5%
over the comparable time period; the
Southern California region was down
2.9%.
TOTAL:$ 3,998,864
-11.3%-1.5%-2.9%
COUNTY STATE
ENCINITAS
2Q2023
TOP NON-CONFIDENTIAL BUSINESS TYPES
Q2 '23*
EncinitasBusiness Type Change Change ChangeCountyHdL State
4.6%3.4%2.9% 378.3 Casual Dining
-19.9%-17.6%-23.2% 371.1 Service Stations
3.1%3.7%-3.7% 185.6 Quick-Service Restaurants
-9.2%-8.4%0.6% 173.4 Sporting Goods/Bike Stores
2.9%4.4%0.4% 168.9 Grocery Stores
-1.0%0.0%5.0% 122.3 Family Apparel
3.7%4.6%2.9% 115.5 Fast-Casual Restaurants
-1.2%0.4%-2.4% 112.9 Specialty Stores
-5.2%-2.3%30.0% 107.7 Convenience Stores/Liquor
-11.1%-8.2%-10.5% 107.4 Home Furnishings
*Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars
REVENUE BY BUSINESS GROUP
Encinitas This Fiscal Year*
18%
Pools
18%
Restaurants
14%
Autos/Trans.
7%
Building
4%
Bus./Ind.
23%
Cons.Goods
8%
Food/Drug
9%
Fuel
*ADJUSTED FORECONOMIC DATA
SALES TAX UPDATECITY OF ENCINITAS2Q 2023
STATEWIDE RESULTS
California’s local one cent sales and use tax
receipts for sales during the months of April
through June were 2.8% lower than the
same quarter one year ago after adjusting
for accounting anomalies. The second
quarter of the calendar year was impacted
by continued wet weather and a difficult
comparison with the prior year, which
experienced dramatic growth.
The fuel-service stations sector contributed
the most to this decline as year-over-year
(YOY) falling fuel prices at the pump reduced
receipts from gas stations and petroleum
providers. Russia’s invasion of Ukraine and
other world events during this period last
year, pushed the global cost of crude oil
to record highs. This dynamic also carried
into general consumer goods as retailers
selling fuel experienced a similar drop.
Recently, OPEC and Russia have maintained
production cuts having upward pressure on
pricing again leading to future comparative
growth.
Sustained wet conditions further delayed
projects, especially those from the prior
quarter, hindering building-construction
returns. YOY lumber price declines added
to the pull back from building materials
providers. Higher interest rates represent a
significant headwind for the industry with
potential impacts of limited commercial
development activity, slowing public
infrastructure projects and homeowners left
unable to access equity for renovations.
Despite a significant increase in new
car registrations, revenue from autos-
transportation fell by 1.4%. The improved
activity can largely be attributed to rental
car agencies restocking their fleets.
However, these are wholesale transactions
with sales tax charged upon rental of these
vehicles. Weak demand for recreational
vehicles, boats and motorcycles coupled
with elevated overall financing costs remain
challenges going forward.
Use taxes remitted via the countywide
pools decreased 0.75%, marking the third
consecutive quarter of decline. While
overall online sales continue to rise, pool
collections dropped with the offsetting effect
of more in-state fulfillment generated at
large warehouses and through existing retail
outlets allocated directly to local agencies.
Restaurant sales were a bright spot as the
summer season began. Although menu prices
have flattened after a year of sharp gains,
patrons are making more restaurant trips
and are favoring spending their disposable
income on experiences. Better sales by office
material suppliers and enhanced investments
of warehouse-farm-construction equipment
contributed to improved returns for the
business-industry category.
Sales tax for the remainder of 2023 appears
likely to follow the recent trend of moderate
declines before leveling off in early 2024.
Cooling consumer confidence and greater
pressure on household budgets may lead to a
lackluster upcoming holiday shopping period.
Furthermore, the possibility of a longer and
more pronounced slowdown in economic
activity exists as the Federal Reserve
considers additional interest rate increases to
combat high prices that are already stretching
consumer wallets.