Mar 5, 2009

One Small Retailer Adjusts to the New NormalBy Kelly SporsBlogs.WSJ.com

It’s a familiar refrain: Customers only buy what’s on sale, if they buy at all. That’s the case at one small Portland chain of kitchen goods stores, says co-owner John Whisler. So rather than try to muddle through the tough times, Mr. Whisler says he’s giving the people what they want: lower prices.

There’s a catch, of course. Mr. Whisler can’t just slash prices at the local chain of five stores, Kitchen Kaboodle – he’d lose too much money. So after decades of being open seven days a week, he’s closing his stores on Mondays, Tuesdays and Wednesdays. “We’re cutting their costs, we’ve got to cut ours,” he says.

Mr. Whisler says he thought about trimming the chain’s advertising budget or cutting the number of times per week the stores take deliveries. But the cost savings weren’t enough to allow him to cut prices – which he sees as essential in this economy. Closing three days a week – the stores’ slowest days – allows a dramatic reduction in expenses. The biggest savings comes from labor. The chain has laid off staff and now has about 90 employees, down from 120 at the peak. Turning off the lights and turning down the heat when the stores are closed also helps.

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