NECO'S Boston Group Sees Tax-Free Sales Lift

By Alan Wolf -- TWICE, 8/30/2010

Franklin, Mass. – The Boston Group, one of five chapters of the NECO Alliance buying confederation, was planning for a big weekend Aug. 14-15 after Massachusetts authorized a last-minute sales-tax moratorium.

The tax-free-holiday weekend was expected to boost major appliance sales by 10 percent to as much as 30 percent over the prior-year period, when the state failed to offer a tax freeze.

“This week business is nothing,” the group’s marketing director and buyer Jim Cunningham told TWICE days before the moratorium. “But this weekend there’ll be mayhem.”

The sales spike “is pretty significant in these times,” Cunningham said, and much needed following an unusually slow July. Indeed, business had been very robust through June, with the Boston Group enjoying a 20 percent increase during the state’s federal stimulus “cash for appliances” program in May. The double-digit gain “far outpaced the industry,” he said, thanks to Massachusetts’ aggressive rebate amounts for refrigerators, laundry and dishwashers, and the chapter’s strong local execution.

But despite a rebound in demand for room-air, sales grew sluggish with the dog days of summer, making the sudden tax holiday a welcomed gift.

Ironically, the Boston Group had run much more aggressive promotions than the 6.25 percent sales tax savings, but consumers tend to jump at the opportunity to get one over on the government, he said. To help maximize the sales opportunity, the NECO chapter is providing its dealers with pre-made ads heralding the tax break, although many members have also produced their own.

“We’re going to promote the heck out of it,” Cunningham said.

The Boston Group, like its NECO umbrella organization, was a former member of the now-defunct Key America buying group, and has since become a division of the $12 billion Nationwide Marketing Group. Cunningham said the chapter controls a third of the majap market in Boston, right behind local sales leader Sears, due in part to NECO’s shared warehousing facilities and rebate fulfillment program, which helps cut dealer costs.

“We’re built for troubled times,” he said.

The next event on The Boston Group’s calendar is the annual NECO Alliance Expo and buy fair at Foxwoods Resort and Casino in Mashantucket, Conn., Sept. 13-14.