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Retail Notes: Small businesses often more likely to survive economic downturn
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Published: January 4, 2009
The country's economic problems are putting the squeeze on a lot of retailers. But there are some businesses that just seem to weather economic downturns better than others.
Some small businesses, for example, many of which are family-run, tend to do well. They include consignment shops and auto-repair companies who provide such services as brake work, shock absorbers and minor engine repair.
Pat Dickson, an associate professor of business strategy at the Calloway School of Business and Accountancy at Wake Forest University, said that in a downturn, people usually keep vehicles longer and put off purchases of new ones.
He also said that small and local hardware, home-repair and do-if-yourself companies usually fare well in bad economic times.
"They tend to do better than the big-box stores during a downturn because you have people who are taking on projects that before they would have hired someone to do. If they don't know something, they are looking to buy not only the product but to get as much support as they can in terms of information."
Small businesses overall tend to be a bit more resilient to economic shocks simply because of their sizes.
"They operate on a much smaller scale that they can adjust their operations usually more quickly than some of the large companies can," Dickson said.
Kathy Baker, the director of the Family Business Center of the Babcock Graduate School of Management at Wake Forest University, said that family-owned companies may be better positioned to survive in economic downturns because they are typically more conservative with respect to debt. The notion of "patient capital" is important to these companies, meaning that they are not looking for a quick turnaround on their investment.
"Since they are privately owned, managers do not have the same quarterly earnings pressures of their peers as publicly-held companies," she said.
In Winston-Salem, business for several small businesses has been good this year.
Steven Benefiel, the co-owner of the Pet Supplies "Plus" franchise store in Reynolda Manor shopping center on Reynolda Road, said that pet supplies and food are like groceries.
"It doesn't matter what the economy is like," he said. "You still have to feed your pet. You still have to buy cat litter."
At Fleet Feet Sports at 1204-A Reynolda Road near Rebecca & Co., people are coming in for shoe fittings and other services.
Emily Davis, the co-owner of the franchise store, said that there are always people with foot problems.
"If it was a pure athletic store, I think we would be struggling more," she said. "But we get kids in here with foot problems, and certainly, a lot of adults who feel pain."
More thrift retail
Mega Thrift has opened a second location in Winston-Salem at College Plaza on University Parkway across from Joel Coliseum. The 9,600-square-foot thrift store moved into space formerly occupied by Budget City Thrift Store.
Mega Thrift opened its first store in the spring of 2008 off Peters Creek Parkway at Clemmonsville and Sides roads in the former Southern Family Market.
New eateries
Cook Out Inc. has opened a restaurant at 1010 S. Main St. in Kernersville. It's in the renovated building that once housed a Libby Hill Seafood restaurant that moved to Clemmons.
Cook Out, which is based in Archdale, has 58 restaurants, of which four are in Winston-Salem.
Many Cook Outs offer drive-through service only, but the Kernersville store is a sit-down restaurant.
Speaking of Libby Hill, Sharol Sumrell, the owner-operator of Libby Hill Tanglewood in Clemmons, and her husband, Chip, have opened a mobile eatery at 7836 North Point Boulevard near Trido of Japan.
The eatery offers pretty much the full Libby Hill menu, including fish and chicken. It is open from 11 a.m. to 6 p.m. Tuesdays through Fridays.
The Sumrells also use the mobile unit at festivals, footballs and for catering in the Triad.
■ Fran Daniel can be reached at 727-7366 or at fdaniel@wsjournal.com.
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