36° FOGGY, FINANCIAL CRISIS TIGHTENS GRIP
Fears spread worldwide
MAIN STREET: Mood among retailers, consumers mixed
Last Modified: Tuesday, October 7, 2008 at 9:44 a.m.
With fears of a "global recession" and "an end to affluence" buzzing about Wall Street on Monday, sentiment on North Coast main streets was like the recent weather: clouds mixed with sun.
- Dow falls record 800 points before rallying
- LEHMAN BROTHERS: Executives' bonuses blasted as House committee questions CEO
- Stocks tumble as Street worries about financials
- Bernanke: More economic pain ahead
- Global anxiety
- BofA profits plummet
- Litigation frozen in Wachovia battle
- Ex-Goldman Sachs exec to lead bailout
- BofA deal may help borrowers keep homes
Some retailers reported that business is down, while others are holding their own or even making gains.
Hardly anyone, though, is cheery about the future.
"I'm scared to death," Ukiah specialty pet store owner Gerry Teasley said.
"I think it's going to get worse before it gets better," said Nate Auerbach, tending his father's Santa Rosa jewelry store.
But retiree Lew Desch, an 81-year-old Oakmont resident who remembers the Great Depression of his childhood, was unfazed.
"It's a cycle," Desch said on Santa Rosa's Fifth Street. "We'll drop down and we're gonna go back up. All you have to have is staying power. We've been through this before."
Bad as things are, Santa Rosa deli owner Pete Mogannam doesn't envision another depression. "Those days are over," he said. "I don't think the system will allow anything like that."
Customers are still buying sandwiches at his store, and couples are buying diamond rings at Auerbach's nearby jewelry shop.
But more people are hocking their possessions -- tools, musical instruments and even DVDs -- at a pawnshop, and a gift store owner worries that a display case full of Spanish porcelain figurines may not sell quickly.
"You don't need a statue at a time like this," said Keven Brown, co-owner of Corrick's, a fixture on Fourth Street since his great-grandfather bought the business in 1915.
Brown is counting on sales of clocks, picture frames, office supplies, wedding invitations and other usable goods to sustain Corrick's, just as stationery sales saw the store through the Great Depression.
"Practical gifts sell," Brown said.
But he admitted some concern for the rest of the year, with an inventory already in hand. "I know it's not going to be a banner Christmas," he said.
On Kentucky Street in downtown Petaluma, a piano player greets shoppers at The Starstruck Boutique, a men's and women's clothing store. "This is the worst it's been in four years. I have to struggle every day to figure out how to pay the bills," owner Melanie Dado-Stammler said.
Her business has been cut nearly in half by the economic crunch, and she's thrown art parties, hosted receptions and brought in music to draw customers.
Dado-Stammler said she's also dropped her high-end clothing items in favor of items more attractive to the frugal shopper.
In Santa Rosa at Fourth Street Market and Deli on the corner of Fourth and Mendocino Avenue, Mogannam said sales are down 10 percent from a year ago. Some regulars are coming in only at lunchtime, forgoing their morning and afternoon snacks.
But he figures he's catching some $5 to $6 sandwich business from people who used to spend much more on sit-down restaurant lunches. Mogannam is also watching waste and trying to hold the line on prices.
"This is the wrong time of year to raise prices," he said.
Foot traffic has fallen in the past two weeks at Mark Allen Jewelers on Fourth Street, said Nate Auerbach, son of owner Mark Auerbach.
Downtown workers aren't coming in to buy themselves jewelry, he said, but sales of wedding and engagement rings -- which are bigger-ticket items -- are holding up.
Credit standards have tightened, making it harder to get some customers approved, Auerbach said, but his access to credit from Wells Fargo Bank remains unhindered.
At the Pawn Advantage on Fourth Street, pawnbroker Lee Baxter said more people are bringing in their goods for short-term loans. The shop, nearing 50 years in business, pays $1 per DVD and some people are hocking large collections, presumably with hopes of buying them back.
The brokers are waiting to see if those redemptions materialize. "If they don't come back for it, we have to sell it, Baxter said.
Pawn Advantage has cut the amounts it will loan on power tools because so much equipment has been hocked by out-of-work construction workers, who haven't come back for their stuff.
On School Street in Ukiah, most business owners said they have seen little change, and some have gained business, possibly because high gas prices are keeping shoppers closer to home.
Mike Rogers, owner of Triple S Camera for 40 years, said business is "about normal."
Customer Doug Pollard, a semiretired contractor from Brooktrails, said his shopping habits have changed a little. "I buy less camera goodies," he said.
Up the street at Mendocino Bounty, business is good but it has dropped slightly from last year, the first dip Karen Record has seen since opening the specialty gift store 14 years ago.
"So far, so good," she said. The economic downturn has prompted her to "choose things wisely," when buying her merchandise. "I try to have price ranges for everyone," Record said.
Mendocino Bounty customer and former Ukiah City Manager Candace Horsley said she's dealing with the slump by cutting back on discretionary spending and shopping locally to support local businesses.
"I shop 95 percent local," she said. "If we don't shop locally, the stores won't be there."
Mendocino Book Company owner Ann Kilkenny said she noticed a small decline in business early this year. She plans to stock a little less Christmas-oriented merchandise this year to compensate.
At the Mendocino Barkery, a specialty pet store, business is good, owner Gerry Teasley said.
"It's actually better now than March or April. I think people are staying locally instead of going to Santa Rosa," he said.
He said having a specialty store also is a hedge against the economic slump. When times are tough, people continue to buy for children and pets, Teasley said.
Customer Lauran Colvin, a student on a tight budget, said she will spend what she does have to keep her dog healthy. "It's like my child," Colvin said.
Business at Frank's Franks, a mobile hot dog stand located at Ukiah's downtown plaza, also is booming, owner Frank Russell said.
"It's perfectly priced and it's delicious," said regular customer Cody Jennings, an information technology technician with the city of Ukiah. "It's the best place to eat."
Tight money is not a problem at The Hideaway, a Petaluma bar attracting both the employed and unemployed.
"With the economy, everybody is feeling blue, so they're drinking," owner Sherri Hankins said.
Staff Writer Paul Payne contributed to this report. You can reach Staff Writer Glenda Anderson at 462-6473 and glenda.anderson@pressdemocrat.com and Staff Writer Guy Kovner at 521-5457 and guy.kovner@pressdemocrat.com.
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Comments
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October 7, 2008 9:44:51 am
RE: Link
This may be slightly off-topic, but who could really be excited about the main streets of our towns and cities these days. We have been inundated with retail centers on every corner. People don't go "downtown" to purchase things anymore.Here in Santa Rosa we used to have three places to shop: Downtown (with lots of viable and great places to go, including a bowling alley and a wonderful stationary store, and a fine men's wear store), Montgomery Village with it's fine assortment of stores, specialty shops and restaurants, banks and a great hamburger joint that wasn't a chain), and Coddingtown with its new fresh offerings and unique stores (fine housewares, upscale shoe shops, key shop, and Thrifty's!)
What do we have now? A big box retail center on every sq. in. of space on every corner at every intersection!!!
And all we get is junk from China! Chain restaurants, chain stores, no recreational venues (i.e. water slides, bowling alleys, dance centers).
We have done this to ourselves, by doing nothing but build, build, build and using immigrant labor at that, eliminating jobs for the middle-class citizens in construction/labor, restaurants, service positons, assembly (Amy's Kitchen, Stent manufacturing, MicroVu, Optical coating/JDS, etc.)
This isn't about Wall St. It is about the government selling out to China as most-favored nation and owning our debt, and run-away ILLEGAL immigration.There is not enough of the tax-paying working/purchasing citizen to support the paradigm shift from small-towns, local merchants, jobs in the community where one lives, to over-come the cost and competition of those who are in our country ILLEGALLY, and who the socialists in our government were trying to put into homes they did not qualify for nor could they afford.
Every problem always leads back to the social programs, indoctrination and constant chipping away at a democratic, capitalistic, free-enterprise system. You can't socialize medicine and every other necessity of life, and continue to expect the economy to survive! Add to that a whole nation of ILLEGALS being allowed to come to our country to take our jobs, have free access to our medical system and healthcare, and our educational institutions.
Isn't there someone out
October 7, 2008 10:44:59 am
Wow, lovesthelaw is really off his rocker today! Actually, lovesthelaw, you've got it backwards. The mess were in now was caused by the deregulation of our financial institutions, something the Republicans have long stood for. Their motto of "hands off so the market can fix it" is simply dead wrong. More regulation is needed and they are finally coming around to realize that. That's why John McCain offers no good solutions. He is so out of ideas that he is changing his strategy to attack Obama personally, you'll see it in tonight's debate.
The Republicans have been in control for 8 years (controlling the house and senate for 6), don't you think that if their policies worked we'd be living in a better world right now? You're the one who needs to wake up!
Also, quit whining about illegals. Their cost is a drop in the bucket compared to our trillion dollar war in Iraq and current financial meltdown.
October 7, 2008 10:47:02 am
lovesthelaw - Well said and I support everything you say, except for 1 thing. There are plenty of great venues in Santa Rosa, Petaluma, Sebastopol, and outlying communities that have GREAT local bands nightly to dance to. These are not the "dance clubs" that cause us so many problems (we know which ones those are), but good small businesses that support the local community and provide a stage for all of these great local musicians (who spend money in our local stores). Come on out and dance to some live music. It's inexpensive (often much less than a night out at the movie!) and fun. Something we all need these days.
October 7, 2008 10:48:32 am
The Fall of America, thanks Ronald Regan! 10/7/08
Link
Welcome to 1976, all over againâ?¦.We are in the middle of an unpopular war, (2) actually, an unpopular and corrupt presidency, the economy is in the tank, gas is through the roof and Americans are more polarized than everâ?¦.Are you better off than you were eight years ago?GAS Prices January 19, 2001: $1.45/Gallon
GAS Prices October 6, 2008: $ 3.89/Gallon
DOW January 19, 2001: 10,587.59
DOW October 6, 2008: 9,955.50
NASDAQ Jan 19, 2001: 2770.38
NASDAQ October 6, 2008: 1862.96
CPI, January 19, 2001: 175
CPI, September, 2008: 315
Dollar exchange with Euro, Jan. 19, 2001: 1.068
Dollar exchange with Euro, October 6, 2008: .733
Nuff said, thanks Repugs!
October 7, 2008 10:55:45 am
kathleen_2001... Although I agree with some of your points, and certainly I am not a Bush supporter these days, there are many reasons why gasoline prices are high and will probably go much higher in the months and years ahead. Until we become energy independent and diversified in fuels that power our vehicles and electricity to light our homes, we are at the mercy of both friendly and unfriendly foreign nations who capitalize on our thirst for energy. They are a major draw on our economy. Even at the current decreased price in oil, we are still sending $550 BILLION overseas to buy foreign oil.
October 7, 2008 11:38:48 am
Anyone else tired of being referred to as 'Main Street'?
I know it's the current politispeak 'word du jour', but it sucks. Mainly because the politicians that use the word are trying to come across that they understand. They don't and they never will.
And lovesthelaw, PLEASE take your meds!
October 7, 2008 2:11:02 pm
Thank the Reagan administration, for their great deregulation program. Then thank the Clinton administration for not trying to head off the Republican deregulation move. Thank the reluctant legislators, who are under the influence of lobbyists? Lastly, Thank
the Bush Administration for going along with the flow.
Deregulation under the capitalist system always leads to financial ruin for the small
investors and the little guy. The corporations, whose function it is to make a profit
for investors, will use deregulations to screw as many people as hard as possible for
as long as possible.Just think of all the great things that finacial deregulation has brought to us:
Universal Default, Sub-prime lending, short selling, the list goes on and on.
And then "The Bailout", The profits are privatised and the losses are socialised.
There is ALWAYS corruption when government fails to regulate, and this particular
Administration is the most egregious in rewarding cronies and enriching themselves.
October 7, 2008 2:16:09 pm
WOW you people are soo whacked out it's silly.Thank ORIGINALLY:
COMRADE CARTER first and foremost. While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities
And then thanks to your lord and savior:
Billy Clinton....it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.
In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.
Republicans have done nothing but call for reform, get your sh*t straight people.
Keep denying it's alright.
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