The Rhinelander Daily News - Online news and information for the Rhinelander, Wisconsin region

Black Friday marked the beginning of the holiday retail season in Rhinelander. As companies battled to position themselves with customers, the sluggish economy has taken a clear toll on consumer confidence. Big box retailers like Wal-Mart and Menards are emphasizing low price points in their sale catalogues, while business owners on Brown Street in Rhinelander are hoping to weather the storm.

A shift towards thrift on the part of consumers has helped some retailers. Wal-Mart announced recently it has seen a 2 percent jump this year in shoppers from households earning at least $65,000. Brent Sundby, manager of the Rhinelander Wal-Mart, said the economic climate provides an opportunity for his store.

“I’ve been doing this at Wal-Mart for 16 years. Looking at our holiday ad for this year, I’ve never been so excited about what we’re doing,” Sundby said.

Sundby said unlike some retailers Wal-Mart has not had to re-position itself in response to the economy because of its emphasis on low prices.

“Honestly, we’re running our program. Wal-Mart had a good third quarter. We softened our fourth quarter estimates a little but we haven’t changed our strategy and we’re winning.”

Sundby said he was still hiring staff at a time when some of his peers are making cuts. Sundby did say that Wal-Mart’s advertising has shifted its emphasis to lower price points and promoting sales on living goods.

“What I see is that we’re strategically targeting living goods. That’s where I’m seeing the price adjustment for the consumer’s benefit. Typically you would see higher end items in the top position on our ad but now you’re seeing more of the opening price points,” said Sundby.

According to Sundby, December is the store’s biggest month each year followed by November and July. The opening of the Minocqua Wal-Mart was expected to impact the Rhinelander store by 10 percent, but Sundby said that hasn’t happened. He also said sales in northern Wisconsin are normally better than the national average for Wal-Mart stores.

“When national projections are down, regionally we do better,” said Sundby. “That’s certainly been the case this year. We’ve had a good year in Rhinelander.”

Sundby said even with the opening of the Minocqua store, his gross sales are up from last year.

The Thanksgiving shopping weekend, from Friday through Sunday, accounted for about 10.1 percent of overall holiday sales last year, according to ShopperTrak RCT Corp. After pushing steep discounts throughout November that are usually reserved for the day after Thanksgiving, retailers like Kohl’s and Menards offered even bigger cuts and promotions for Black Friday in a frantic bid to pull in shoppers.

Customers were lined up outside Menards well before 6 a.m. on Friday morning to take advantage of the store’s holiday sale, with many items on sale only until 11 a.m.

Dane Powers, the Rhineland store’s general manager, said he looks forward to the Black Friday event each year.

“It’s kind of a fun atmosphere,” Powers said. “People know what to expect and they come here ready to go. I expect we’ll set records again this year.”

Like Wal-Mart, Menards emphasizes low pricing, which seems to be at the top of consumers’ lists this year.

“We’ve got the best prices in town and that’s what Menards is based on. We win the loyalty of our guests by having the best prices,” Powers said.

Powers said the store gears up for its holiday sales a month ahead of time, bringing in extra stock and training employees. On Friday over 100 team members were on hand to great the rush of Black Friday customers. Powers estimated the store would have over 8,000 customers over the course of the day.

Kohl’s Corp. opened its doors at 4 a.m. and offered discounts of 40 percent to 50 percent on a wider range of brands, including its priciest fashion labels like Simply Vera Vera Wang. The parking lot was so full Friday morning that cars were circling in search of a spot.

While the discount big box stores are thriving, higher end sectors of the retail industry are not and national statistics that measure consumer habits are grim. Retail sales fell 2.8 percent in October, the fourth straight monthly drop, as unemployment hit a 14-year high of 6.5 percent. The National Association for Business Economics last week projected that the overall U.S. economy, after shrinking at the annual rate of 0.3 percent in the July-September period, will contract at a rate of 2.6 percent in the current October-December quarter.

Consumer confidence rose slightly in November as a result of receding gas prices, but Americans’ views on the economy remain the gloomiest in decades as they grapple with massive layoffs, slumping home prices and dwindling retirement funds.

The New York-based Conference Board said Tuesday its Consumer Confidence Index now stands at 44.9, up from a revised 38.8 in October. Last month’s reading was the lowest since the research group started tracking the index in 1967. The Expectations Index, which is consumers’ assessment of the economy over the next six months, increased to 46.7 from 35.7 in October, but those numbers are way below last year’s.

“The persistent declines in the Present Situation Index suggest that the economy has weakened further in the final months of this year,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “But despite the improvement in the Expectations Index this month, consumers remain extremely pessimistic and the possibility that economic growth will improve in the first half of 2009 remains highly unlikely.”

Wall Street closely monitors consumer sentiment because consumer spending represents about two-thirds of all economic activity.

With all the talk focusing on Main Street during the election cycle, retailers on Brown Street are optimistic about their prospects and realistic about what consumers want.

Joan Belongia, owner of Brown Street Books said traffic at her holiday open house was up.

“We has a really good open house last weekend. It was much better than last year. I don’t know where it’s going because you never do,” said Belongia.

Still, Belongia said she has tightened her own belt in anticipation of consumers doing the same.

“I anticipated this happening so I ordered fewer books and unfortunately cut some of my staff because I want my store to be here next year,” Belongia said.

Belongia said she has also returned more books to publishers that offer that service this year in order to avoid holding too much inventory. She said shoppers in her store seem to be more inclined to buy feel-good books or books about history.

“People are looking right now for books that give them a laugh or feel-good books,” Belongia said.

Belongia said her store counts on the Christmas season each year and this year is no different.

“It’s the heaviest time for us. Christmas sales are what we count on. A lot of the retail stores in northern Wisconsin do,” Belongia said.

“It took a long time for American downtowns to decline and it will take a long time to build them back up again,” said Belongia.

Just up the street at KC Menagerie, owner Cindy Tomlanovich has stocked items she believes will suit customers’ changing tastes.

“The season has been good, but I’ve changed some of my inventory to reflect what customers want,” Tomlanovich said.

Tomlanovich said her holiday sales account for a few months’ work in a few weeks’ time, so the season is critical for her business. She has tailored her inventory towards high-quality and unique gift items that emphasize family interaction.

“I put myself in the shoppers’ place. I’ll still buy for all of the people on my list, but I may not buy as big or as much. I’m going to look for unique items that have the right price,” said Tomlanovich.

Tomlanovich said she does not worry about competing with the big box retailers, because her store offers a different experience.

“I don’t offer the same thing the big boxes do. I know they’re there but I don’t think about it too much. I’m offering customer service and quality. People can always beat me on prices, but they can’t give people the things I can,” said Tomlanovich.

Tomlanovich said she has stocked more high-quality toys this year and more board and dice games. She believes consumers are in the midst of a bigger shift that may benefit stores like hers.

“I think we’re starting back to old-fashioned family values. People are realizing the value of the dollar again and they’re not just out there blowing their money,” Tomlanovich said.

Belongia echoed the sentiment.

“If people are going to buy something, let them buy a book because that’s something that will last,” Belongia said.

Tell us what you think...

Comments »

Scott wrote on Dec 1, 2008 2:52 AM:

" I am originally from Rhinelander. My dad owned a hardware store downtown for 25 years. He had to go out of business because the 2 Marts (K & Wal) sold items cheaper than he could buy them. They would do that on purpose to run the mom & pop stores out. Then they raise prices once they got rid of the "compeition". I now live in San Francisco & this city has outlawed Walmart from setting up within it's borders. The result- lots of small thriving mom& pop stores in every neighborhood. Walmart has ruined the Midwest's downtowns and the rich culture that the little towns had before they sent their corporate teams in. I have no respect for Walmart.
Scott "

Beth wrote on Nov 29, 2008 11:16 AM:

" I can relate to the cutting back for sure this year. In its place i have tried to make sure i have a list of wonderful things that no store could put a price on and thats traditions. Something my child can take with him for a life time and not just a season. I think this economic crisis can be turned into something positive and help us focus on whats really important to us and that is family. While they may take our $$ they cant take away family values or traditions "

The comments above are from readers. In no way do they represent the views of the Rhinelander Daily News.