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Coming out of the COVID-19 pandemic it was no secret that people were ready to get back into the world, ready to take part in social activities like shopping once again.
The city of Mercedes and its Rio Grande Valley Premium Outlets are seeing a new wave of shopping, at least according to their sales tax revenue, which has increased by about a million each year since the pandemic.
In 2019, Mercedes collected $6,300,619.54 in sales tax. But that number fell by 16% to $5,282,350.42 in 2020, when stay-at-home orders were implemented due to the COVID-19 pandemic and led to the closure of many businesses in the Rio Grande Valley.
Some of the brick and mortar shops at the outlets, and at the malls in the Valley, were not the exception.
In fact, the Simon Property Group purchased several businesses that were struggling during the pandemic, like Forever 21, Brooks Brothers, and all the Starbucks affiliates in their centers.
“It wasn’t like they weren’t performing here at the outlet mall, actually they were performing very well, it was just because of the pandemic,” said Melissa Ramirez, executive director of the Development Corporation of Mercedes. “Nationwide as a whole, particular companies were not doing well, so they just shut down.”
Ramirez now credits consumer confidence reemerging since then, and even exceeding pre-pandemic numbers.
Mercedes increased its sales tax collections in 2021 to $6,490,204.49, a nearly 23% increase, and again in 2022 with $7,954,052.94 for a 22% increase. 2022’s collections actually represent a 50% increase since the beginning of the pandemic in 2020.
Thus far this year, Mercedes is on pace to eclipse last year’s collections. Year-to-date, the city has already raked in $6,388,173.66 in sales tax revenue compared to the $6,108,208.11 during the same time last year.
“We did experience a rebound once the COVID numbers started to decrease and it looked like everyone wanted to get outdoors,” Ramirez said.
The outlets, once the largest economic driver in the town referred to as the Queen City, had seen less foot traffic in the years leading up to the pandemic, which at the time had largely been attributed to the devaluation of the peso.
Consumer demographics, however, have shifted since then, according to Ramirez.
“What was weird was that historically the outlet mall traffic is generated by Mexican nationals,” Ramirez explained, adding that prior to the pandemic they made up 80% of consumer population at the outlets while Valley residents made up the other 20%.
“Now, the city has noticed a shift in consumers where 60% of shoppers are from Mexico and 40% are local shoppers. That wasn’t because there were (fewer) Mexican nationals. That traffic remained consistent. It’s that there were more RGV residents visiting the stores. The RGV shopper is there at the outlet mall which we’ve never actually seen before.”
It also helps that restaurant chains like Wendy’s, Chick-fil-A and more recently McDonald’s have opened in town.
Although The North Face will open in November there have been about six new stores within 18 months at the outlets, including Journeys Kidz, Charlotte Russe and Psycho Bunny.
“There are more stores coming in the first quarter of next year,” Ramirez said.
She explained that the city of Mercedes will be opening business that will “complement” the outlets experience.