HdL Sales Tax Report for CY2023 Q3 Saleswww.hdlcompanies.com | 888.861.0220
Q3 2022*
Q3 2023*
Legend
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
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 Winter 2024
SALES TAX UPDATE
CITY OF ENCINITAS
3Q 2023 (JULY - SEPTEMBER)
7 Eleven
76
Alila Marea Beach Resort Encinitas
Aloha Collection
Best Buy
Cardiff Seaside Market
Chevron
Dick’s Sporting Goods
Encinitas Ford
Hansen Surfboards
Herman Cook Volkswagen
Home Depot
Home Goods
IFE Marketing
Pacific Coast Grill
REI
Scotty Cameron Gallery
Shell
Target
TJ Maxx
Total Wine & More
Valero
Vons
Vuori
Walmart Supercenter
Gross receipts for Encinitas from
July through September were 14.5%
below the third sales period in 2022.
However, after adjusting for reporting
modifications such as audit adjustments
and delayed payments, actual sales were
down 10.2%.
Retail spending was stable, with strong
sales in sporting goods-bike stores and
family apparel, posting a 3.6% gain
over the prior year. Casual and quick-
service dining once again grew as people
enjoyed dining out during the summer
months. Activity in the business-industry
group pushed receipts up almost 14%.
Conversely, the recent loss of a key
business in the autos-transportation
group sank the group’s comparative
results by 53.5%. Moreover, the
reduction of Bradley-Burns sales tax
caused the City’s share of the countywide
use tax pool to shrink; and coupled with
waning third-party auto and internet
sales, the City’s pool allocation dropped
15.8%. Furthermore, a shift by online
retailers to fill more internet orders from
instate fulfillment centers instead of
out-of-state locations resulted in some
revenues moving out of the pools and
into direct jurisdictions.
Fuel prices edged down, resulting
in lower service station revenues.
While slipping slightly, contractors’
spending helped support the building-
construction returns.
Net of adjustments, taxable sales for all
of San Diego County grew 0.9% over
the comparable period; the Southern
California region was down 1.4%.
TOTAL:$ 4,161,633
-10.2% 0.9%-1.6%
COUNTY STATE
ENCINITAS
3Q2023
TOP NON-CONFIDENTIAL BUSINESS TYPES
Q3 '23*
EncinitasBusiness Type Change Change ChangeCountyHdL State
-7.4%-3.0%-3.5% 408.2 Service Stations
2.8%1.8%1.9% 400.0 Casual Dining
2.7%3.4%6.8% 217.9 Quick-Service Restaurants
-4.8%-2.7%1.8% 183.2 Sporting Goods/Bike Stores
2.3%3.1%-0.2% 166.3 Grocery Stores
3.1%5.7%51.2% 162.5 Family Apparel
3.3%2.7%3.8% 126.6 Fast-Casual Restaurants
-2.0%-0.6%11.6% 118.0 Specialty Stores
-12.1%-11.3%-13.2% 106.3 Home Furnishings
-9.9%-11.8%-7.3% 104.3 Convenience Stores/Liquor
*Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars
REVENUE BY BUSINESS GROUP
Encinitas This Quarter*
17%
Pools
20%
Restaurants
8%
Autos/Trans.
8%
Building
5%
Bus./Ind.
24%
Cons.Goods
8%
Food/Drug
10%
Fuel
*ADJUSTED FORECONOMIC DATA
SALES TAX UPDATECITY OF ENCINITAS3Q 2023
STATEWIDE RESULTS
California’s local one cent sales and use
tax receipts for sales during the months of
July through September were 1.6% lower
than the same quarter one year ago after
adjusting for accounting anomalies. The
third quarter of the calendar year continued
with a challenging comparison to prior year
growth and stagnating consumer demand
in the face of higher prices of goods.
Fuel and service stations contributed the
greatest overall decline as lower fuel prices
at the pump reduced receipts from gas
stations and petroleum providers. While
global crude oil prices have stabilized, they
remained 15% lower year-over-year. This
decline also impacted the general consumer
goods category as those retailers selling
fuel experienced a similar drop. Despite
OPEC and Russia production cuts having
upward pressure on pricing, global demand
during the winter months has softened.
Along with merchants selling gas, many
other general consumer categories
were also down from the 2022 quarter,
confirming consumers pulling back
on purchases. Home furnishings and
electronic-appliances were a couple of the
largest sectors with the biggest reductions.
As inflation and higher prices were the
main story a year ago, currently it appears
to be a balancing act between wants and
needs, leaving meek expectations for the
upcoming holiday shopping season.
Even following a long, wet first half of 2023,
spending at building and construction
suppliers moderately slowed. The current
high interest rate environment did not help
the summer period and still represents the
largest potential headwind for the industry
with depressed commercial development,
slowing public infrastructure projects
and new housing starts waiting for more
profitable financial conditions.
Despite continued increases of new car
registrations, revenue from the autos-
transportation sector slipped 2.6%. The
improved activity remains mostly attributed
to rental car agencies restocking their fleets.
Like other segments, elevated financing costs
are expected to impede future retail volume.
Use taxes remitted via the countywide
pools dipped 3.0%, marking the fourth
consecutive quarter of decline. While
overall online sales volume is steady, pool
collections dropped with the offsetting
effect of more taxes allocated directly
to local agencies via in-state fulfillment
generated at large warehouses and through
existing retail outlets.
Restaurants remained an economic bright
spot through summer exhibiting a 2.6% gain.
As tourism, holiday and business travel are
all expected to have recovered in 2024, the
industry is bracing for implementation of AB
1228 - new CA law setting minimum wages
for ‘fast food restaurants’.
With one more quarterly result to go in
2023, the recent trend of a moderate decline
appears likely before a recovery in 2024. Initial
reports from the holiday shopping season
reflect a 3% bump in retail sales compared
to 2022. Lingering consumer confidence
may have also received welcome news as the
Federal Reserve considers softening rates by
mid-2024.