by Sean Ruppert, Staff Writer
The owners and managers of local restaurants and retail stores say they have noticed a change in the spending habits of consumers as the economy has dipped toward recession.
Some said they noticed a shift in the types of items purchased by consumers, while other owners and managers reported a general drop in consumer spending at their businesses over the past year.
Carol Kaufman-Scarborough, a business professor at Rutgers University-Camden, said that when a downturn in the economy occurs, consumers often do more of their shopping at stores where they think they are going to get a better value. Dr. Kaufman-Scarborough said that this often means more business for discount stores like Wal-Mart and Target.
A federal government report issued Oct. 30 found that consumer spending dropped at a 3.1 percent annual rate between July and September, after growing at a 1.2 percent annual rate in the previous three months, according to The New York Times.
Dilip Patel, owner of the Speedy Mart convenience store at Five Corners in Dayton, said fewer people have been coming into his store for single items that could be purchased at a grocery store during a shopping trip.
”Not as many come in to buy milk or something like that,” Mr. Patel said. “Everyone has been looking more carefully at the prices. Certain products they will wait and buy at a bigger store if they think it will be less.”
Dr. Kaufman-Scarborough said that in an economic downturn, people will often cut back on eating meals at restaurants. She said recent research has shown that the first meal people are willing to sacrifice is lunch, choosing to bring leftovers or meals from home to work.
”People decide that they want to eat out less, but they still have to eat,” she said. “So they bring in leftovers or microwavable meals. You may end up seeing less of a lunch crowd at restaurants and more of a crowd around the microwave.”
Mr. Patel said he has seen a drop of about 30 percent in his lunch counter sales at the Speedy Mart over the past year. Alfred Claudio, the owner of Boardwalk Seafood, which is in the same strip mall as Speedy Mart, said his lunch sales have remained steady, though sales at other times of the day have dropped off while costs have increased.
”Every aspect of this business has been affected,” Mr. Claudio said. “People have less disposable income to spend here, and our costs have increased with fuel surcharges.”
Mr. Claudio said he has seen a significant drop off in business from senior citizens.
”We just don’t see people who used to come regularly as much,” he said. “Seniors are on a fixed income, so they have no other way to make it up.”
Mr. Claudio said he has had to cut costs by not opening the restaurant on Sundays, and going with a smaller staff.
Dr. Kaufman-Scarborough said the shift in spending habits will cause some retailers of more economical products to increase their business, as others see sales fall.
Chris Flecknoe, assistant manager at Halter’s Cycles, on Route 1 in Monmouth Junction, said that the cycle store has not been adversely affected by the economy. He said that the store’s business generally slows in the winter, but that the store is doing as well or better than it was during the same period in 2007. Mr. Flecknoe said that he has seen a change in the types of items and services being purchased, though.
”We have seen more people coming in to buy commuter bikes, or taking old bikes out to have them fixed up,” Mr. Flecknoe said. “More people have been trying to save on gas since it has been so expensive. They want bikes to ride to work if they are close enough, or to the store.”
Dr. Kaufman-Scarborough said that, no matter what the economy looks like, people will still need to purchase food, clothing and some kind of entertainment. She said that the only question is where they are going to get them.
Levi Marthi, a manager at Pierre’s Restaurant on Georges Road in Monmouth Junction, said people are still doing the things they have always done.
”People still go out, they still have birthdays and anniversaries and graduations,” Mr. Marthi said. “I think the media has made it out to be a little scarier than it actually is. People are still going out to do what they do, they just want to spend a little less. Hopefully it gets better.”
Marvin Dee, manager of Party Fair, on Route 27 in Kendall Park, said that people are still purchasing the same items, but he has noticed a change in the atmosphere as they do it.
”It used to be that while you were checking people out you could have a little bit of a conversation with them,” Mr. Dee said. “Now their eyes are fixed on one place, on the price display.”
Dr. Kaufman-Scarborough said that, while the concern over prices can drive many people to larger, discount retailers, there is still room for mom-and-pop businesses to be successful.
”Consumers in any downturn look for what they trust,” Dr. Kaufman-Scarborough said. “If they have gone to a local hardware store a few times and always gotten good advice and something that works, they will likely go back.”
She said that small businesses need to convey to consumers what it is that sets them apart from larger retailers.
”It can be a real opportunity for a mom-and-pop to communicate what they do better or differently, to show that they can do something for local consumers that the big stores can’t do,” Dr. Kaufman-Scarborough said. “Sometimes people purposely come out to support local businesses in an economic downturn.”

