Arkansas ended its fiscal year 2023 with the second largest surplus in its history, according to a July 7 revenue summary from the Arkansas House of Representatives.
Results from collections and distributions for FY 2023 reached $7.185 billion. The FY 2023 Revenue Report stated that this was $1.161 billion in excess of full funding level for the Revenue Stabilization Act, representing a surplus.
Sales and use tax collections were $263.6 million, which is 8.4 percent higher than FY 2022. Corporate income taxes saw an increase of $5.3 million, or 0.6 percent over FY 2022.
The Arkansas General Assembly passed Act 561 this year, which authorized the transfer from the previous year’s unobligated surplus funds and up to $380.6 million in projected surplus funds from this year to the restricted reserve fund, the report stated.
It went on to note that Arkansas’ economy is “growing and outperforming expectations. In fact, for the month of June alone, revenues were above forecast and year ago levels in all major categories.”
Steve Goode, executive director of the Arkansas Grocers & Retail Merchants Association, acknowledged the economy’s strength, as well as the surplus.
Goode, who is also owner of Arkansas-based Goode Foods LLC dba Goode’s Cash Saver, said inflation has “cooled somewhat” in grocery stores, which has helped consumers. He added that independent grocers’ comp sales seem to be flat or slightly down at this time.
“There was an artificial sales increase the last couple of years, with inflation being out of control following the pandemic year. That has definitely cooled off in 2023.”
With sales tax collections up more than 8 percent from FY 2022, Goode said customers are still shopping, but they are looking for value.
“Retailers tell me that they see other retailers’ bags in consumers’ vehicles when they help take groceries out. I think this is a clear indication that consumers are looking for the best price, even if it means that they have to shop several stores or even formats for the best value for them.”
While the supply chain has improved, Goode said it is not back to pre-COVID service levels. “But we are as good as we have been since COVID.”
Arkansas saw a record low unemployment rate in June, with it declining to 2.6 percent.
“That’s 1 percent lower than the national average. It is common to drive through most Arkansas towns and see retailers and service industry storefronts have ‘help wanted’ signs up.”
According to Goode, the AGRMA talks with its retailer members every day about how it can help them. “We just had a retailer reach out yesterday with a SNAP issue that needed some attention at DHS. You never know what the retailer will need. We just always try to be very responsive to whatever the need is.”
The 2023 session of the Arkansas State Legislature adjourned May 1. Goode said the biggest win for the association was being part of the criminal justice reform bill.
“Shoplifting is now a much more serious offense in Arkansas, and retailers needed that to help reduce shrink due to shoplifting.”
The AGRMA opposed a bill that would have done away with non-compete agreements. It failed to pass. It also was against a bill that would not have allowed for non-majority Arkansas-owned pharmacies to open.
“That would have been a horrible bill for some of our members that are headquartered in other states that want to open stores with pharmacies. That failed also, so another win.”
The AGRMA did incur a few losses, including on allowing retailers to sell higher alcohol content beer products in their stores.
“Arkansas laws are a jumbled mess when it comes to liquor, beer and wine sales. The loser here is the consumer, so hopefully we can work to clean that up.”
He said some members wanted to get a stronger vapor products law on the books.
“There are a ton of illicit vapor products in Arkansas that are being sold that have not gone through the FDA PMTA approval process. This puts members who follow the federal guidelines at a disadvantage.”
For our members that follow those federal guidelines and only sell PMTA-approved vapor products, it puts them at a disadvantage in the marketplace.”
AGRMA will work on those issues again in 2025. The legislature convenes every other year.
Overall, the grocery industry in Arkansas is strong.
“We care about our communities and strive to serve them daily,” Goode said.
Read more market profiles at The Shelby Report.
