From Wall Street to Nassau Street
This is now a regular occurrence in Labyrinth Books, said von Moltke, who co-owns the store with Cliff Simms. Though it is hurtful for her to watch, she added, price-conscious consumers are a growing presence in the uncertain economic environment.
Labyrinth Books is one of many stores in Princeton affected by the current recession at a time when many local business owners are closing or considering filing for Chapter 11 bankruptcy. The recession has had a considerably milder impact in Princeton than in many other regions, some Nassau Street store owners said, but some also said they believe Princeton is no longer as insulated from national economic crises as it has been in the past. Notable closings include those of Chico’s, a women’s clothing store in Palmer Square, and Nassau Interiors, a furniture shop on Nassau Street. Though customers in the area are looking to save money, von Moltke said she has observed a “cultural shift” toward supporting local businesses.
“I’ve been in Princeton for almost my whole life … We have a relatively affluent community, although I think right now, this recession is sort of running deep and impacting people at all levels,” said Marco Cucchi, owner of Thomas Sweet Ice Cream & Chocolate. “Prestigious people in the financial services are losing their positions … [and] being in town, I see homes on the market for longer periods of time.”
Some stores in Princeton have suffered an estimated 10 to 15 percent decline in sales, said Peter Crowley, president and CEO of the Princeton Regional Chamber of Commerce.
“If you took a pulse [of the local economy] today, it would be blipping once in a while: still sort of steady but it’s not as fast as it was a year ago,” Crowley said. “Even though [Princeton is] a strong university town, Wall Street has an impact down here,” he said, adding that Princeton has not been affected as much as other areas.
A change in consumer sentiment
Sunita Midha, who co-owns the restaurant Mehek with Seema Chopra, also said that the loss of jobs in the financial sector is affecting her business. She explained profits for her restaurant are down this year and that customers are ordering cheaper dishes.
“[We need] more jobs in the financial district because in Princeton a lot of people work in the city, and they are involved in finance,” Midha said.
Midha’s restaurant is not alone in seeing declining profits. Customers are also ordering smaller smoothies, said Booster Juice owner Michael Pulaski, who noted that profits for his company declined 15 percent from last year.
Diane Weinstein, a local travel agent and an East Windsor resident, described the impact of the recession as cyclical.
“[P]eople all over are being more careful, which affects how much money I make, which makes me more careful,” Weinstein said.
David Rosendorf, owner of The Frame Shoppe on Spring Street, called the current economic situation “unchartered territory,” noting that profit margins have been declining for everyone as consumers look to save money.
“Today, customers are very concerned about what costs are, and any extras that are added on, customers usually today will not take,” Rosendorf said. “They’re looking for the basic package only.”
Rosendorf said he believes the media is largely at fault for the decline in consumer confidence.
“The problem is that the media has done a masterful job of scaring customers [from] spending money,” Rosendorf said. “The economy would be better if the media did not harp on the fact and give their take. I think that’s best left to economists.”
Michelle Farrington, owner of Farrington Music, said she also noticed more hesitation among customers, but she added that her business has not suffered a decline in profits and that she does not believe Princeton has been affected by the recession.
Surviving the recession
Many business owners said they hope only to match their 2008 sales, since 2009 is expected to be difficult for businesses as they adjust their prices to meet the falling demands of the market.
“Profits are eroding every day, and costs go up,” Rosendorf said. “This is part of our survival skills. If you have a business and you don’t adjust your business to what the market will pay, you might as well close your door.”
Rosendorf intends to adjust his business strategy by spending less on advertising this year. Cucchi, however, said he has taken the opposite approach and spent more on advertising. He recently collaborated with a University sporting program and joined the USG’s PrincetonPlus program, which offers a 10 percent discount to students, in the hopes of attracting more student customers.
Cucchi said that while ice cream sales at Thomas Sweet have held steady, chocolate sales declined by 12 percent this year.
“Historically, during recessions, ice cream tends to do fairly well,” Cucchi said. “People might not want to go out for dinner, but they’ll go out for ice cream.”
Labyrinth Books has taken a unique approach to dealing with the recession by purchasing books from England and taking advantage of the dramatic decline of the value of the pound in recent months, von Moltke said.
A more local focus?
Several Princeton residents said they are trying to support local businesses when they can.
Evelyn Sasmor, a Princeton resident, said she believes it’s important to support local businesses because their taxes fund local services. She also said that local stores provide a noticeably improved customer service during economic downturns.
“It’s the people that are right here that you’re helping,” Weinstein explained while shopping in Labyrinth Books. “I can’t afford to pay more to stay local, but with all things being equal, I choose to purchase from local businesses first.”
Von Moltke said she is hopeful customers like Weinstein will help her business through these difficult times.
“It’s possible that the greater trend towards [shopping on] the internet will be offset a little bit by more of a focus on being local and more of an understanding of what it means if a local economy is kept vibrant,” von Moltke said. “It could be that there’s a different kind of cultural shift that will benefit independent stores.”
Pulaski said he hopes the Obama administration will provide tax relief to small businesses, but many other business owners said they thought they would simply have to weather the recession.
“This has never happened in this country before, at least not to this extent,” Rosendorf explained. “There’s really no advice that anybody can really give you other than to hang in there and conserve what you have — and it might do some good to do a little praying.”