D-Day
Shoppers take merchants by storm
During the weeks before the Permanent Fund payout, John Roneu gets ready. After all, for the Fairbanks Home Depot store manager, the Dividend shopping period is even bigger for the store than the Christmas holiday.
Home Depot isn't alone. Stores throughout the state brace for a surge of customers each October. Alaska residents have $663 million and are willing to spend it. Competition for those dollars shows up in advertisements for Dividend sales on everything from snowmobiles to Hawaiian vacations.
"We planned for it," Home Depot's Roneau said two weeks after the first checks went out in October 2003. "We bring in more merchandise knowing there will be an increase in sales for those weeks." He says sales increase by about 10 percent during the month or so immediately following Dividends.
Nathan Werner, who was working as a salesperson at Home Depot during the Dividend period, says it was "like an extra Christmas, where people are spending extra money." He says there was a "huge difference in business" the weekend after Dividends were deposited and estimates an increase of 20 percent for those few days. A recent arrival from Utah, he says there's nothing in Utah comparable to the Dividend, except the "typical holiday season."
Roneu says holiday shoppers are buying relatively small items as gifts, such as drills and saws, compared to Dividend shoppers who buy big-ticket items for themselves like appliances and flooring.
Home improvement isn't the only way Alaskans spend their annual allowance. Heidi Stone, the assistant store manager at Gamestop, a video and computer game retailer in Fairbanks' Bentley Mall, saw a marked increase in sales during the weeks surrounding D-Day. She says the store earned $30,000 more than average for the week when Dividend checks were disbursed.
This was Stone's first Dividend season in Alaska, but she says the 5-year-old store was aware of what was going to happen. The store begins preparations about three weeks in advance by ordering more merchandise, and three weeks after Oct. 11, there are still boxes being opened. She says sales of the more expensive systems such as Playstations and Gamecubes, which cost $150 to $200, are a major portion of the increase.
"That's when someone says, 'Now I can get an Xbox or PS2 or whatever,' says Juston Dixon, manager of Microplay's Abbot Road store in Anchorage, which also sells computer and video games. Dixon says the Permanent Fund Dividend essentially extends the holiday shopping season. "Obviously sales volume will increase. I'm sure you'll see that anywhere." Microplay prepares by increasing staff and ordering more merchandise from October through January.
While most business owners have visions of dollar signs dancing in their heads, there is one place where the Dividend season means pretty much business as usual.
Bryant Watson, a sales representative at Gene's Chrysler, says you won't see any "double-your-Dividend" advertisements for the dealership. "We don't do the typical 'take advantage of everyone's influx of cash,' " he says. "We encourage families to use their kids' Dividends on the kids."
Watson says there is an increase in sales during October, but he doesn't attribute it to the Dividend. "October is the time frame for the building season to finish up. A lot of people made a bunch of money during the summer and are ready to spend it," he says. "I myself didn't see much increase in customers who had Dividends."
The end of the year sees more of a sales increase at Gene's Chrysler, Watson says, when manufacturers offer incentives such as rebates up to $6,000 to make room for new models. Businesses also make vehicle purchases near the end of the year to take advantage of tax breaks, he says.