Internet has impact on Cincinnati city budget

Internet has impact on Cincinnati city budget
Posted at 6:30 PM, May 12, 2017
and last updated 2017-05-12 18:30:57-04

CINCINNATI -- More and more people are shopping online, and that's putting pressure on Cincinnati firms like P&G, Macy's and Kroger.

Could that also be contributing to the city's deficit? City Manager Harry Black said he thinks so, and there's no easy way out of the situation right now.

When corporate net profits are down, that means less income tax revenue for the city. Procter & Gamble has steadily trimmed its workforce. Macy's is retooling by shedding 8,700 jobs nationwide. At Kroger, 1,300 people took a voluntary retirement offer.

"I believe the internet is having an impact and Amazon is having an impact," Black said.

Chris Nicak of the University of Cincinnati's economics center said data back that up.

"About 10 years ago, in 2006, we were seeing three to 3 to 3.5 percent of all purchases being online or commerce," Nicak said. "The first quarter of 2017, we saw almost 8.5 percent of all purchases being online."

Shoppers continue to be split on whether they prefer online ordering or brick-and-mortar.

"My online shopping has definitely increase," Molly O'Connor of Fairfield said. "I buy about 75 percent of my household goods and presents online."

Lakeisha Comer of Covington said she prefers going to a physical store.

"You always know what you're getting when you go to buy it, versus online, because sometimes your orders get messed up," Comer said.

At Koch Sporting Goods, they said internet shopping has dinged them a bit, but they make up for it with their own website and a well-stocked store.

"What we want to do is give customers a good shopping experience to counteract the convenience that they might find just sitting in their living room shopping on their computer," Greg Koch said.

Experts said they expect the online shipping trend is going to continue, meaning more pressure on the city budget for years to come.