Traverse City Record-Eagle

Elk Rapids Township

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April 10, 2009

Merchants hopeful, cautious

By Melissa Domsic

Elk Rapids -- Closed signs adorned numerous downtown shops in this Antrim County tourist village on a recent morning, a nod to shortened winter hours and an unsettling economy.

But business is picking up at The Moose party store, where women sipped cappuccino and the oven churned out pizzas in anticipation of the lunch crowd.

Sales at The Moose typically perk up in April, but owner Steve Montero remains cautious about his financial prospects heading into 2009's second quarter.

"Snowbirds are coming back, so that's good. That's about the only good outlook I can see right now," he said. "I'm hoping people will start to come up; it really depends on the downstate economy."

Area retailers are somewhat optimistic that the business climate will improve this spring and summer, but said they are acutely aware of challenges brought on by a national recession that's compounded Michigan's decade-long slump.

"Before, I would have much more in stock, where this year I'm going to try to cut things real close, because we don't know," Montero said. "I'm going to pull it back a little bit. You have to, there's just so much uncertainty."

Maurice Hayden expects a gradual increase in sales at Old World Gifts & Furnishings, a store he owns at 1899 Rogers Road in Grand Traverse County's Green Lake Township.

"I think consumer confidence is back on the rise ... because of the (Obama) administration, this tax cut from the income taxes, I think will help out. Also income tax returns coming back," he said.

The outlook among shopkeepers statewide tends to be hopeful, said Jim Hallan, president of the Michigan Retailers Association.

"There are so many wild cards in the market right now, with unemployment rising, with the impact of federal stimulus dollars ... but the last 30 days there does seem to be a glimmer of hope going forward that maybe we're starting to climb out of the difficulties we've been in," Hallan said.

The retailers group reported that 34 percent of those surveyed said they expect higher sales in March, April and May compared with the same period last year, while 41 percent forecast decreased sales and 25 percent predict no change.

Their cautiousness appears to reflect shoppers' attitudes.

Ann Nordeen, 40, of East Bay Township, picked up some toys and kites for Easter presents recently in downtown Traverse City.

"(The economy) has definitely made us more aware of what we spend," she said. "Instead of just being frivolous, we're weighing things out."

But when it comes to holidays and gifts for children, she said, "You've got to have fun, too."

Traverse City resident Annie Hess, 26, strolled downtown with her 6-month-old daughter and her friend, Jerri Sleder, 29, who brought her 3-month-old son.

Both said they've cut down on shopping, dining out and other luxuries.

"On top of not having a lot of money because of the economy, we have even less money with babies," Hess said, adding she often buys her clothes from second-hand shops.

But consumers' belt-tightening has boosted sales of some items at Maxbauer's Ace Hardware store in Grand Traverse County's Acme Township.

"People are doing their own lawns instead of hiring services, so we've got a pretty good outlook," said Mikki Pyne, assistant manager.

Spring is prime time for garden store owners.

Most of the sales at Garden Goods, 3510 N. U.S. 31 South in Garfield Township, are done in an 8-week period, owner Julie Sovereign said.

Sovereign was shocked, though, when sales jumped about 20 percent for most of the first quarter. She attributes it to the popularity of locally grown food, organic lawn supplies and composting.

"Even though people are struggling with their jobs and the economy is so tough, they are still very interested in their homes, gardens, growing things themselves. I think it's very trendy right now," she said. "We are anticipating growth in certain categories, specifically grow-it-yourself food."

In Leelanau County, store owner Linda Garshaw also is optimistic about her spring business at The Happy Woman gift shop, 309 N. Saint Joseph St. in Suttons Bay.

She opened for the season the first week of April, and sales already are up from this time last year.

"I am stocking up on things that are a little lower price-point," Garshaw said. "I'm selling a lot more that's made in the U.S. It's important to me to support our economy, so I'm buying things in the U.S."

The National Trout Festival at the end of April brings more customers into Jack's Sport Shop, 212 Cedar St. in Kalkaska.

Aside from that, business has slowed since ice fishing tapered off, manager Gary Gile said.

"Weather permitting, I'm sure we'll have a busy trout festival," he said. "That's the first shot in the arm for us."

The restaurant industry also relies on good weather.

Paul Money is hoping for a good summer after "a very bad winter" at Money's Platte River Inn, 10921 Main St. in Benzie County's Honor.

The last quarter of 2008 was about 35 percent down from the previous year, but the first quarter of 2009 was about the same as last year, he said.

"I'm just hoping for good weather for mushrooms (harvest), that would get us started," he said. "Weather has a lot to do with the second quarter."

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