Consumers spent about 17 percent less on goods and slightly more on restaurants and hotels last holiday season compared to the year before, according to a report from the City of Santa Monica on quarter four sales.

Although retailers struggled, taxable sales were up 2.3 percent overall from October through December compared to the same period last year. Santa Monica lagged behind Los Angeles County and the rest of Southern California, where sales were up 3.2 percent and 2.6 percent, respectively.

“It’s good to see that revenue was higher than the previous year, but it’s starting to flatten out,” said Jennifer Taylor, an economic development administrator with the City. “This holiday season performed pretty well overall, but retail and consumer sales didn’t do as well as last year in one of their busiest times of the year.”

Taylor said the drop in spending on goods was a result of some retail foreclosures and a shift in business strategy from the city’s department stores.

“Nordstrom and Bloomingdale’s are shifting to online sales, so you go into the store to see the products and then they direct you to order online,” she said. “A lot of retailers throughout the country are using that strategy.”

The sales tax generated from those online sales goes into county and state sales tax pools that Santa Monica gets a share of, Taylor said. The city received a slightly larger share last holiday season compared to the year before.

“It’s a good reminder to folks to think about buying local in terms of the revenue it generates to support our schools and parks,” she said.

Despite soft retail sales the 2.3 percent in overall growth was driven by a combination of factors including auto sales and new businesses entering the city such as grocery stores and restaurants. Higher fuel prices also contributed to the uptick.

“We continue to be lucky to have a diversified range of businesses to counter the ebbs and flows of sales tax activity,” Taylor said.

During the holiday season, the consumer goods and auto and transportation industries each comprised a quarter of the city’s sales tax revenue. Restaurants made up a fifth, although only fine dining and quick-service restaurants grew last holiday season.

Of the top 25 producers of revenue, 12 were car dealerships or leasing companies.

“Lexus and Mercedes always perform really well here in Santa Monica, but Tesla’s newer showroom on the Promenade has also done well,” Taylor said.

Santa Monica-based startups Ring, Bird and Fair Financial were key sources of revenue for the city, as were local hotels Shutters on the Beach and the Fairmont Miramar Hotel.

Apple, Nordstrom and Vons also made the list. The other high producers were two home improvement stores, a marketing firm and an equity firm. Business services, a category that includes marketing and financial services companies, took in almost 200 percent more revenue.

“There’s probably been an increase in business-serving activity in the city due to the growth of Silicon Beach,” Taylor said.

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