Small Business Saturday gaining momentum in Maine

By Matt Wickenheiser, BDN Staff
Posted Nov. 25, 2011, at 12:34 p.m.

PORTLAND, Maine — Tracy Darcy remembers one customer who came into her downtown Bangor store, Metropolitan Soul, during the holidays.

A bit seasonally harried, he had stumbled on the alternative to big-box madness — shopping small, local. He bought a number of gifts, then was amazed when Darcy offered free gift-wrapping. He left for a coffee, then returned a half-hour later to get his wrapped parcels, happy and on his way. The next day, new customers came into Darcy’s funky shop, having been told about it by their friend — the harried shopper from the previous day.

“Let big boxes do their craziness,” said Darcy. “We’re going to do lovely.”

For many, the start of the holiday season means Black Friday, with consumers mobbing malls and queueing up for some of the biggest deals of the year. While that’s certainly true in Maine, many of the state’s shoppers are big supporters of small business.

Nationwide, there’s a push for supporting small retailers during the holidays, formalized by a marketing campaign that American Express launched last year called “Small Business Saturday,” sandwiched between Black Friday and Cyber Monday.

Local retailers are embracing the effort, as well. Darcy said she’s open on Black Friday with a morning sale. But she’s also celebrating Small Business Saturday with food, drink and some gift certificate giveaways. Bella Luna, a Bangor clothing boutique, is having a sale on Black Friday and on Small Business Saturday.

Last year, the first year of the effort, small merchants reported a 28 percent year-over-year increase in sales on that day, said Scott Krugman, AMEX spokesman.

“It was like catching lightning in a bottle,” he said.

The day seems to be growing in popularity in its second year, he said. Last year, the effort had 1.2 million “likes” on its Facebook page. This year there are 2.5 million. Krugman acknowledged that the day’s success is, if anything, reflective of support that’s already out there for small retailers.

“You can’t artificially create something that isn’t there,” said Krugman. “The sentiment from consumers has always been there — Small Business Saturday is about tapping into that, and turning the sentiment into sales.”

Kristen Lainsbury, who co-owns The Maine Maven boutique in Orono with her husband, Jason, sells “unexpected” Maine-made items. She said she sees a lot of support for her business and for the small businesses she supports through her products lines. That national sentiment is clearly reflected in Maine, she said.

“The people who buy local are passionate about it and loyal about it,” said Lainsbury, “and generous in their support for a business like ours.”

But while some almost militantly buy local, other consumers move easily from small to large, she noted.

“We do have people who stand all night at Target, and will come and see us when we open,” said Lainsbury. “It’s not an either-or.”

People patronize small retailers because they can get unique items, because they want to keep money local and because they enjoy the relationships and level of customer service, Lainsbury said. For example, she knows what her customers want, can set aside items for them and even carry new products in a line if requested.

That concept of “relationship” is really at the heart of support for small businesses, said James McConnon, an economist at the University of Maine who studies the subject.

“A lot of Maine people really like to forge relationships with businesses and local communities,” McConnon said. “By developing those relationships and finding out what the wants and needs are of your customers in an informal way, these local businesses attract additional customers, if nothing more than through word of mouth — which is a very powerful way to grow a customer base.”

McConnon recently examined state sales tax returns to get a sense of how Maine’s retail sector — and small businesses, in particular — may fare during the holidays.

“A couple of indicators suggest to me that retailers are likely to see a slightly better year in Maine than last year in terms of consumer spending — and perhaps there’s optimism for the smaller specialty stores, given that consumers have been spending in that area, that they would continue to spend coming into this important holiday shopping season,” said McConnon.

Overall consumer sales are up 2.3 percent for the first nine months of 2011, compared with the same period a year ago. Spending in the “general merchandise” category, which includes chains, big boxes, larger retailers and others, is down 0.8 percent. But the “other retail” sector, which includes drug stores, jewelry stores, sporting goods stores, antique stores, smaller specialty stores and boutiques, was up 3 percent over last year.

Similarly, looking at an average of the last three months, compared with the same period a year ago, general merchandise was up by 0.5 percent, while other retail was up 3.8 percent. On bulk numbers, the general merchandise sector was consistently larger than the other retail sector — for example, in September, general saw $265.8 million in taxable sales, while other saw $201 million.

But, noted McConnon, “the other retail sector is, at least percentagewise, is outperforming the general merchandise sector going into this important holiday shopping season.”

That general trend line is encouraging for Maine’s holiday sales, said McConnon. Another positive sign is the fact that consumer debt has fallen during the year, he added.

That said, there are mitigating factors that may dampen holiday sales. Unemployment has remained steady in Maine, with about 52,000 people out of work, McConnon said, and energy and food costs are higher than a year ago, as well.

The Portland-based Market Decisions research firm said in a Nov. 22 release that a recent survey they conducted of 400 residents shows Mainers became increasingly pessimistic in October 2011 and their outlook about the future has darkened.

This may impact holiday spending, Market Decisions suggested.

“There is no sign of improved perceptions of the economy that would result in increased consumer spending,” the firm wrote.

According to the survey, which had a margin of error of 4.9 percent, 49 percent of Mainers say they are worse off now than a year ago and only 16 percent say they will be better off a year from now.

McConnon noted, however, that consumer spending has risen year over year for the last several years. And success for the small retail sector is important for a state like Maine, he said.

“Maine is a small-business state. There’s no question that the economic vitality of our communities depends critically on their success in creating and sustaining jobs,” said McConnon.

http://bangordailynews.com/2011/11/25/business/small-business-saturday-gaining-momentum-in-maine/ printed on July 28, 2014