Saturday, October 25, 2008
Dollar daze: Consumers cut back; businesses feel the crunch
Consumers are cutting back their extra spending, and business owners are feeling the pinch.

Photos by JARED SOARES The Roanoke Times
Kenny Stone cleans a tire Tuesday at Tanglewood Auto Wash on Electric Road in Roanoke County. Regular customers used to stop weekly at the car wash, said part owner Mike Bell, but they are stretching washes to every few weeks. "It's tough right now," he said. Other businesses have noticed customers cutting back their spending, citing the economy.

Membership sales are down and more people have canceled their memberships at the Roanoke Athletic Club, said Bud Grey, vice president of wellness and fitness for Carilion Clinic. Some people have cited economic challenges. "There's this precipice that people view their athletic club as a luxury or a necessity," he said.
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Michelle Acree pulled her Ford Explorer into Tanglewood Auto Wash. Spilled milk soaked the seat.
It had been a while since Acree, a Hollins University student, forked over about $20 for a car wash. To save money, Acree had been washing her Explorer by hand in her driveway.
On Tuesday as a last resort, she turned into the car wash on Electric Road.
"I didn't know how to shampoo the seat," she said. Still, Acree opted to have only the one dirty seat shampooed, not all four, because it was cheaper.
Like Acree, people everywhere are becoming more selective about how they spend their money. As the economy declines, prices go up and the stock market fluctuates, certain purchases once considered necessities -- or necessary luxuries -- are moving down or completely off the priority list.
The choices are being felt at some Roanoke Valley businesses, from car washes to health clubs, restaurants and others, that depend on discretionary dollars to fuel survival.
A September survey by global consulting firm Booz & Co. reveals that more than one-third of consumers have made substantial cutbacks on regular purchases and activities, which include dining out, driving and shopping. They have trimmed spending on vacations, hobbies and entertainment. And as the economy worsens, they're planning cutbacks in other areas, including health club memberships and electronics purchases, the survey reveals.
According to The Conference Board, which calculates the Consumer Confidence Index, consumers' appraisal of current conditions eroded further in September. Those saying business conditions are "bad" increased to 34.2 percent from 32.7 percent, while those claiming business conditions are "good" declined to 12.5 percent from 13.7 percent.
And retail sales, which include sales at gasoline stations and restaurants, were flat in September compared with last year, according to the U.S. Commerce Department.
Regular customers used to stop weekly at Tanglewood Auto Wash. Lately, they are stretching car washes to every few weeks, said Mike Bell, part owner of the Roanoke County business
"It's tough right now," Bell said, explaining that traffic and sales are down. He would not reveal sales figures.
On a recent afternoon, he pointed to the business' enclosed car wash area. No vehicles were moving through it.
"For every 30 seconds that's off, we lose $18," Bell said.
While some consumers are cutting back on car washes, others are rethinking whether or not to pay for fitness.
Membership sales are down at the Roanoke Athletic Club and at the Botetourt Athletic Club, but membership renewals are up, said Bud Grey, vice president of wellness and fitness for Carilion Clinic.
Also, an increasing number of people have canceled their memberships, some citing economic challenges, Grey said.
Similarly, people are not joining the Roanoke Valley YMCA at swelling rates. New memberships are down 15 percent to 20 percent across all YMCA locations, compared with last year, said Cal Johnson, executive director.
In the past six months, the number of YMCA members seeking help paying their membership fees has jumped, he said. The nonprofit organization offers financial aid to those who cannot afford memberships.
Still, the economy may not be the only factor dampening memberships at these fitness facilities. Two new health clubs have opened in Roanoke in the last year -- Gold's Gym at Crossroads Mall and Planet Fitness at Towers Shopping Center. That has tightened competition for local fitness dollars, Johnson and Grey said.
Restaurants also are vying for consumers' wallets and leisure time, and some are not winning it.
Sales are down 20 percent at Full Moon Cafe, a bakery and food shop in Southwest Roanoke County. Owner Francis Moon said he may open on Sundays to boost sales. It's the only day of the week that his shop is closed.
At Trio Bistro Bar Bottle, an upscale eatery in downtown Roanoke, "our business is not what it needs to be," owner Sands Woody said. He attributed that in part to people dining out less and to changes that are affecting downtown commerce, such as lack of parking and the two-week closure of the Roanoke City Market Building last month.
Pat and Sky Wilder already have sliced their eating-out budget. The Bedford County couple used to dine out three or four times a week. Often, Sky Wilder would pick up a pizza from Papa John's on his way home from work. Recently, the Wilders have scaled back, eating out only once a week to save money and reduce debt.
"We have cut out a couple hundred dollars a month," said Sky Wilder, who, along with his wife, is taking a personal finance class at a Roanoke church.
To be sure, some local businesses are weathering the economic storm and thriving.
Olivia Byrd hasn't seen much evidence of an economic downturn at Rockfish Food & Wine, her Roanoke eatery on Grandin Road.
"My feeling is that people will cut corners where they have to, but at the same time, people feel like they deserve something special," she said.
Businesses offering beauty services, from haircuts to manicures, are holding their own. Zee's Salon & Day Spa in Roanoke was full of activity on a recent afternoon. Customers perched in chairs, having their hair styled and cut, while others awaited their turn. Zee Ritter, the owner, emerged from the back of the room, explaining that the day hadn't stopped for her. If the economy is tanking, it's not evident at Zee's.
"Hair is a necessity," Ritter said. "People want to look good."
Meanwhile, some businesses are hoping for a turnaround early next year. January is the busiest month of the year for most health clubs. It likely will be the true test of just how much the volatile economy is affecting membership sales at the Botetourt and Roanoke athletic clubs, Grey said.
After all, people may need exercise now more than ever, he said.
"If there's ever a time that you need stress release, it's with the economy tanking," he said.




