HOLIDAY SHOPPING: Little stores, big hopes

During this scrimp-and-save holiday shopping season, the problems hitting major chain retailers are being felt by small, locally owned stores, too.

In fact, it may be even worse for the little guys, such as Peony Lin, owner of Lavender boutique in Alpharetta.

“We have seen an increase in shoppers versus last month, still not as good as it was last year,” Lin said. “They’re cutting down on their purchases, much more cautious. They’re always asking for sales, coupons. They’re always trying to find the best deal.”

Jeff Humphreys, economic forecasting director at University of Georgia’s Terry College of Business, says “It’s a back-to-basics movement. That is all weighing heavily on retail in general. I suspect it’s going to weigh more on independent retailers.”

Locally owned stores must show how they’re different from chains while proving they can compete on price, said Humphreys, retail groups and store owners. That’s doable for mom-and-pop stores in established shopping destinations filled with independent stores and regular customers, such as Decatur and Little Five Points.

But for independent retailers in Atlanta’s newly developed suburban fringes, it might be tougher.

Lin opened her boutique, Lavender, four years ago along a traffic-heavy strip in Alpharetta. She expects to keep up sales this holiday season by offering more discounts and reaching out to her regular shoppers.

But her second Lavender location didn’t even make it to the holiday season. In October she closed the 2-year-old store in Cumming. The development where it was located is cute, Lin said, but the area lacks nearby construction, foot traffic and a reputation as a destination shopping district.

“A lot of people didn’t even know where we were. They’re passing cows and horses and going, ‘Where is this place?’ ” Lin said. “I think there’s a lot of potential out there, but it was too early. I felt like I failed. You have to be able to wait it out.”

Tougher in suburbs?

New independent stores already facing the usual challenges of a young business must also struggle with high rents and credit limits, said Warren Bruno, a long-time Atlanta restaurateur and now a commercial real estate broker who works with independent businesses inside and outside the Perimeter.

Bruno said stores in the urban and suburban fringes are in greater danger because development stopped growing around them, and nearby customers are in the mood to save, not shop.

“As independent operators, what we have to do is drive it home that we’re the shopkeeper, tradesman, the one who’s going to be here for you,” Bruno said. “That’s a city consciousness. I’m not sure if people outside the Perimeter have that.”

Stores in older destination neighborhoods —- Buckhead, East Atlanta and Virginia-Highland, for instance —- can survive and even grow during tough economic times, industry watchers say.

That will happen if landlords are more willing to negotiate rent with long-term tenants, regular customers keep coming in, and locals who changed their shopping habits when gas prices skyrocketed stick with neighborhood stores.

Looking ahead

Retailers hope that “Buy Local” mentality will do for stores what it did for organic food and farmer’s markets, said Eric Levin, owner of Criminal Records, which has been in Little Five Points for 18 years. He also owns Aurora Coffee stores in Little Five Points and Virginia-Highland.

The record store’s holiday sales have increased because it recently moved around the corner to a space three times as large as before, and because many customers are turning shopping into a statement about community support, he said.

“All of my earnings go to Atlanta —- it does keep stores like us in people’s hearts and minds,” Levin said. “I can’t say shopping at Criminal Records will put more police on the streets, but there is a cost to choosing the low-cost leader.”

Even if the holiday season ends well for some independent retailers, a good location and loyal customers don’t make any store recession-proof. After the holiday money is spent, there’s still 2009.

“I feel very good about the rest of this month —- I don’t know if we’d be doing well if we were somewhere else,” said Diane Capriola, co-owner of Little Shop of Stories, a bookstore that moved to a larger space on Decatur Square in April. “Now I’m thinking ahead to January and February —- looking beyond this, and not knowing.”