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WATCH NOW: Sioux City retailers say stimulus payments sparked demand during an already-booming time

WATCH NOW: Sioux City retailers say stimulus payments sparked demand during an already-booming time

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SIOUX CITY -- Some Sioux City retailers reported strong sales in the days and weeks after area residents received their $1,400 stimulus checks.

Merchants said the recent sales bump comes on the heels of the generally swift business they've experienced in the past year. 

At Pflanz Electronics, everything has been selling well -- television sets, car stereos, home audio and home theater equipment, commercial audio and video, security systems, owner Scott Pflanz told the Journal. 

"A lot of cash coming in for sure," Pflanz said. "We saw a change the first day, when (the stimulus payments) went out. I think it came out on a Wednesday, and that afternoon we took in more cash in one afternoon than we normally do in a week. It's crazy."

"The biggest thing we're fighting right now is getting product supplied to us. There's a shortage of pretty much everything we sell." 

Pflanz Electronics provides audio and video for home entertainment and commercial installations as well as car audio entertainment solutions in Sioux City.

Congress passed the $1.9 trillion American Rescue Plan in March, and checks and direct deposits started flowing from the IRS almost immediately. An individual earner making less than $75,000, a head-of-household making less than $112,500, or a couple filing jointly making less than $150,000, was eligible to receive the full $1,400; the amount tapered off for higher earners. 

For many taxpayers, the stimulus money was extra disposable income. Sioux City's unemployment rate as of February was 4.1 percent, or roughly full employment. Average incomes in the city, however, are below the national average, while the poverty rate is above average, according to the Census Bureau. So some residents likely saved the money or used it to pay down debt or to keep rent or mortgage payments up-to-date. 

Pflanz said his store already had a red-letter year before this last stimulus -- people stuck at home wanted to upgrade their television sets and stereo equipment, and they had the money to do so, thanks to previous stimulus payments and expanded unemployment benefits. 

"When COVID started, in March 2020, we had a couple slow weeks of course because everybody was scared, really nobody knew what was going to happen, so a couple slow weeks," Pflanz said. "But really ever since then, business has been above where it normally is. So that includes April, May, June, July, all of last year. The second half of last year was fantastic. 

"Most people's jobs, most people's income did not change. But they're home more. So, if you're not home very much, and you've got a TV that sometimes works in the basement, sometimes it doesn't work, it's really not a big deal. But when you're home every day, and that TV doesn't work, absolutely, now's the time to get a bigger, better TV," he added. 

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Other merchants reported comparable experiences. At Knoepfler Chevrolet in Sioux City, they've had plenty of customers during the past year, but the supply of cars has struggled to keep up with demand. Traditionally, auto dealers see an uptick in demand around tax-refund season -- and, if nothing else, this spring has been the equivalent of a supercharged tax-refund season. 

''We don't ask people where their down payment comes from -- like, 'What's the source of your down payment?' But it would be safe to assume that we'll definitely see some of that money in down payments," said Ben Knoepfler, a partner at the dealership.

"We don't ask them, 'Hey you're putting $2,000 down, is any of that stimulus money?' We don't ask those questions, but yeah, it definitely will show up in down payments for sure. Also shows up incidentally in car repairs as well. If people need a new set of tires, or brakes." 

The National Retail Federation, a trade group, last month reported strong sales figures for February -- sales were up 6.3 percent year-over-year. The NRF attributed the growth to both the stimulus and increasing COVID-19 vaccinations. (The most recent stimulus didn't pass until March; however, there were two earlier stimulus payments last year.) 

Such a scenario, with plentiful money and high demand, historically has been a harbinger of inflation. Economists' projections of inflation risk have been mixed this year -- the Federal Reserve is projecting inflation rates somewhere in the range of 2 to 2.4 percent for the next few years, which is right around the Fed's ideal inflation rate. 

The stimulus has been a boon for Greenberg's Jewelers, which recently moved to a new location on Sunnybrook Drive. Some of Greenberg's customers used their stimulus payments to open charge accounts, while others put purchases on credit cards, then used the stimulus to pay down the balance. 

"We're having a phenomenal month," Scott Sachnoff, Greenberg's spokesman, said in late March. "It's been very busy the last week, because a lot of the checks hit this last week. We do have a lot of couples looking for engagement rings." 

Sales have likewise been solid at Bomgaars, the Sioux City-based retailer of farm supplies and products for the home. The chain has done well in recent years and is in the process of expanding its footprint, which will soon be up to 100 stores. 

"Some of the bigger items are selling well, and they have been, some people are buying lawn mowers early, we're selling a lot of power tools, DEWALT power tools," said Torrey Wingert, Bomgaars vice president and CFO.

"Our apparel sales, surprisingly, have been really, really strong too, so we're not sure exactly why that is, if it's stimulus-related or something else. But it certainly feels like there's more disposable income." 

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