At Wishes Under Wrap, a 15-year-old gift-basket and gourmet-food shop in Johnston, owner Laurie Langford late last year found herself out around town, marketing her products more ardently than she had during past holiday shopping seasons.
Knowing that the holiday shopping season would be weak, she talked up her gourmet baskets at business-after-hours events. She went to community events, including a breakfast event hosted by Mayor Joseph M. Polisena. And she took out a booth in the North Central Chamber of Commerce’s new holiday shopping festival, an event where she brought in two new corporate accounts and about $500 in immediate sales.
While some small Rhode Island retailers coasted through the holiday season with sales to long-standing repeat customers, others, like Langford, undertook more active marketing campaigns to drive sales, NCCC President Bob Lafond said earlier this month.
“They needed to do creative things – the ones who are doing that are holding their own,” he said. “The ones who are just doing what they have been doing, those are the ones that are struggling.”
Even with the extra effort, Langford’s holiday sales didn’t grow. But they didn’t shrink much, either, she said. “With the economy, it wasn’t as good as my other Christmases, so every little bit helps.”
With a shortened season – Thanksgiving came late in November – and a national recession, the National Retail Federation reported recently that holiday sales fell compared with the previous year.
“It was not a nice, pretty, Christmas story,” Rhode Island Retail Federation Executive Director Paul DeRoche said in an interview, citing NRF statistics that showed that holiday retail sales dropped 2.8 percent from the year before – a 5 percentage point drop from NRF’s original projection of a 2.2 percent increase.
National holiday sales fell to $447.5 billion from $460.2 billion the year before. It was the first decline in holiday spending since 1995, when NRF started tracking the data. Clothing, furniture and electronics sales were all down year over year.
As a result, anchor stores – including Sears, which has three Rhode Island stores – are going to be closing some stores throughout the country this year, DeRoche said.
“That will have a major impact,” he said of possible Rhode Island closures. “I think by the middle of February, there will be some announcements by some big retailers that they’re going to be closing many, many stores in many, many states.”
And vacancies in Providence are already on the rise. Between the second and third quarters of last year – the most recent data available – retail vacancy in the Providence metro increased from 7.3 percent to 7.9 percent, according to Reis Inc., a New York-based commercial real estate tracker. That vacancy was higher than average for New England, which was at 7.0 percent, but lower than the 8.5 percent national average.
Asking prices for Providence retail leases last year declined through September – with the mean nonanchor rate down 1 percent to $21.19 per square foot at the end of September, according to Reis Inc.
Most small-business organizations are looking ahead to a year of poor retail sales for members. The National Small Business Association, for example, earlier this month issued a year-end report that showed that only 3 percent of small-business owners in the United States expected to see the U.S. economy grow in 2009 – that was down from 21 percent in August 2008. In announcing the results of the survey, the group pushed for small-business help from Congress.
At the East Greenwich Chamber of Commerce, Executive Director Jerry Meyer said holiday sales were “OK” for his membership.
“We’re getting by,” Meyer said. “It’s all right. … January, February and March are always tough months, no matter what the economy. But they got through the holiday season.”
Jane Parillo, owner of Scribe Calligraphy Studio & Gallery on Main Street in East Greenwich, has been creating handwritten invitations and stationary for 20 years. “This year I had a lot of repeat customers come in for specific things,” she said. “They know what I have and what service I offer – most of the business was repeat customers.”
Jeff Dronzek, owner of Learn All About It Toys in Warwick, which opened last March, didn’t have the same luxury, “because in our world, the most important thing is building your base, which can take a couple years.”
He has more than a decade in retail-buying experience and said customers this year were cutting down on high-end items and spending less per trip than they would have in a better economy.
“As a general rule, what people were doing this year was: maybe if they used to buy two or three things during the holiday season – one would be a big item and the rest would be smaller items – they might have cut back to just the smaller items or just the big item,” he said.
At Butterfield, a furniture and home-décor store on Westminster Street in Providence, Manager Liz Zito said sales were strongest on the nights when there were holiday events downtown, including the Dec. 5 Downtown Stroll. But she said there was more foot traffic downtown during the 2007 holiday season.
And aggressive, creative marketing campaigns seem now to be the norm for many Rhode Island retailers as they try to pull in customers during the recession.
Dronzek this month started marketing toward snowbound families: the kids are out of school and are cooped up in the house, so come in and buy some educational toys for them, he’s telling parents.
At the Newport County Chamber of Commerce, Executive Director Keith W. Stokes said his Chamber created the “We Want You to Buy Local” campaign, based on the visuals of the Uncle Sam advertising once used to sell U.S. War Bonds. That program helped pull his membership through a tough holiday season, although it’s unclear whether all retailers will stay open.
Stokes’ Chamber is now analyzing data that it will use to pitch a sales tax holiday to the General Assembly. “Our recommendation would be to use it as a kickoff for people to shop locally,” he said.
But it’s clear that the holiday season wasn’t the end of tough times for retailers, Wishes Under Wrap’s Langford said.
“You just have to keep on going out there,” she said, “telling people that you’re still there, you’re still in business and you still need them.” •
