Oct 27, 2009

Small Shops Make Big Play for Holiday ShoppersBy Dana MattioliOnline.WSJ.com

Small brick-and-mortar shops that rely on seasonal sales are seeking creative ways to avoid last year’s bloodbath of discounting, as cash-strapped consumers are expected to gravitate toward big-box and discount retailers.

Toy and gift shop Groovy dc rolled out its holiday merchandise in early October—a full month earlier than usual—advertising Halloween and Christmas simultaneously. “Because of the economy we said, let’s get the inventory out while there’s money available,” says co-owner Manuel Cortes, who says holiday sales account for upward of 25% of the Washington, D.C., store’s annual revenue. “It’s a way of enticing and saying ‘hey, come and get it,'” he adds.

Wonder Works, a specialty toy store with two locations in Charleston and Mount Pleasant, S.C., set up its Christmas windows in mid-September, a month and half earlier than usual, and began offering layaway a few weeks earlier too. Owner Christine Osborne says 45% of business comes between October and the end of the year. Her strategy seems to be already working—September sales at the toy stores were up 8.5% from last year. “People are anxious and want to secure items and budget out their money,” she says.

Even more than in previous years, small shops have to worry that penny-pinching consumers will go elsewhere, experts say. Customers have “shifted a lot of their spending away from the specialty retailers and moved toward mass value centers like Wal-Mart,” says Frank Badillo, senior economist at Retail Forward, a research and consulting firm specializing in the retail industry.

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