Local retailers head into the biggest sales months of 2009 knowing that
the shopping decisions made during this time could affect which local
stores survive.

Retailers that count on fourth-quarter sales - particularly after a
dangerously soft spring and summer - to hit annual goals are watching
sales trends closely.

“The last five weeks of the year, it’s do or die for all of us,” says Vicki Honeyman, owner of Heavenly Metal boutique on E. Ann St. in downtown Ann Arbor.

That’s happening on a national level, too.

But in Ann Arbor’s independent stores, owners and advocates say the stakes may be higher.

“The last five weeks of the year, it’s do or die for all of us,” said Vicki Honeyman, owner of Heavenly Metal boutique.

Seasonal sales will define many stores’ futures.

“If you don’t want to see more businesses close, then this is it: This is the time right now (to shop in the independent stores),” said Ingrid Ault, director of Think Local First in Ann Arbor.

And, she adds, she’s already fearful for some operators.

“What people need to understand is they really have the power to make a difference with how they spend their money,” Ault said.

Some in Ann Arbor are mobilizing behind Ault’s Think Local First, which grew from 148 members to 207 in the last year. Membership extends beyond traditional retailers and outside of downtown.

Others are advocating for increased local spending through their retail associations, chambers of commerce and trade groups that help bolster sales of like items for members throughout the U.S.

They hope efforts like the “Buy Local” slogan and the new 3/50 project take hold during this shopping season and result in consumer awareness of how spending choices influence the community.

But for area retailers, the results are personal. It means they can pay the rent, pay employees, even pay themselves.

And they recognize that chain stores have merchandise and pricing that appeals to a mass audience, especially during a recession.

They also draw connections to what it means for the area’s commercial landscape when shoppers don’t spend a small proportion in locally owned stores.

“It’s pivotal to keep the community charm that we have,” said Ault.

“What I ask people to do is think about one of their favorite memories that they have of downtown. Everyone has a favorite store or favorite restaurant.

“If they were gone, how would you substitute that?”

Honeyman agrees with Ault’s assessment that Ann Arbor should be alarmed over the prospect of losing more unique retailers.

“What makes the city cool is its small, independently owned businesses,” Honeyman said. “That’s not chain stores. They don’t make a city cool. What people would lose is what people love about Ann Arbor. The cool businesses, the unique businesses that you can’t find anywhere else.”

Honeyman has made adjustments: She’s buying a lot of the fast-sellers that resonate with buyers this fall. She’s aiming for a lower price point. She’s holding more in-store events, and - since she also cuts hair in the retail space - she’s stocking items to attract those customers, too.

“I’m trying to stay positive,” she said. “It was hard in the summer. It was very, very difficult. I was questioning whether I was going to be able to make it, but I didn’t want Ann Arbor to lose another small business.

“… I’m standing firm. I don’t want to be a statistic.”

Taking fewer risks

Some level of attrition is inherent among local retailers, since they make operations decisions for many reasons.

But this year, the economy is driving many of them. It’s an obvious factor - with over 9 percent local unemployment and a national recession, it’s hard to miss the signs of economic struggles.

The spring and summer yielded acute revenue drops for many local retailers, they said. And in the past year, Ann Arbor witnessed a wave of closings: Fresh Seasons Market, an Espresso Royale on the east side, Shaman Drum Bookstore, Bella Vino, Dream On Futon.

In October, Pear Tree closed after three years on North Main Street. Its owners said that slow sales early in the year destroyed their confidence that renewing their lease for the storefront would be worth the risk.

They’re shifting their business to online sales after absorbing a 50-percent drop in sales and low sales during the 2008 holiday.

“(Sales earlier this year) were the worst we’d ever had in business … furniture sales were really down,” said Jenny Schroer, a co-owner.

“We thought about renewing and seeing if things got better, but in the end … I don’t think they’re going to get better,” she said.

But many retailers are optimistic - based not on sheer hope, but on their attention to sales trends and the strategies they’ll use to weather economic factors.

Like shoppers, store owners are more budget-conscious.

“We have to be particularly selective with how we’re investing our money right now,” said Hans Masing, co-owner of Tree Town Toys.

In previous years, he’s taken more risks with new products. This year, there’s a focus on proven sellers - games are hot in his store right now - and attention to the window when faster-selling items can be reordered.

Honeyman is hoping the Baggu reusable shopping bag stays a hot-seller, and she’s already on the fourth order of a popular dress style.

Heidi Parent, co-owner at Sun & Snow, said that store is targeting in-store events, packages that tie products to experiences, like teaching kids to use snowboards, and repositioning its popular ski swap of used items because of the intense interest.

“We’re doing what we can to get people active,” she said.

But Parent said she feels like she’s fighting a wave of emphasis on “deal-deal-deal” that encourages customers to demand lower prices due to a perception that the retailers are desperate - and able to cut that kind of deal.

“They’re killing consumer confidence and making anyone not want to spend their money at all,” she said. “… That will close the doors of a lot of retailers.”

'We’re rightfully nervous’

Local retailers point out that they’re also customers in this market. Masing, for example, said he makes his own buying decisions based on trying to keep as much money in the local economy.

“That’s worth more than the (limited) savings I may get,” he said.

“We’re all in this together,” Masing added. “It’s not an ‘us-versus-them’ with our customers. If our customers want us to succeed, they have to help us … and we have to help them by running our business as honestly and straightforward as we can, and make sure we have products that they want.”

The retailers also seem to share some unity with other local merchants.

Parent said other similar outdoor-merchandise retailers in the area are exploring what collaboration could do to improve their businesses.

Honeyman speaks of other boutiques, like Sole Sisters Shoes, that also work hard to retain their place in the local retail landscape.

Tree Town Toys staff will encourage customers to try Learning Express if they don’t have a wanted item available.

The strategies, they hope, will get them through the season - and beyond.

“We’re rightfully nervous,” said Masing. “Customers are nervous, too. So we share that.

“The question is: How do we address that nervousness as business owners, and how do we help ensure that as things pick up … that we are positioned to have weathered this story and come out of it thriving?”

The one thing they can all be sure of in the next weeks is that the volume of shoppers hitting the stores will increase, and they at least have a chance to have a part of it.

“It is tenuous times,” said Honeyman. “But I’m not hearing anyone saying, ‘I’m not buying Christmas presents this year.’”

Paula Gardner is Business Director for AnnArbor.com. She can be reached at PaulaGardner@annarbor.com or (734) 623-2586.

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