[caption id="attachment_19250" align="alignleft" width="235" caption="Carlos Rivas"][/caption]
Today, Sonoma County retail vacancy hovers close to 15 percent. All sectors are affected, and many businesses have ceased operations while others look for rent reductions from landlords in order to survive the decrease in customer traffic and reduction in revenue due to heavy price discounting.
Retail expansion, ongoing until 2007, continued as homeowners found ease in acquiring equity loans through refinancing in an ever escalating housing market. As the housing bubble broke, those funds began to dry up. Unemployment presently at 10 percent, not including the under-employed and those no longer seeking work, has forced retailers to fight for a share of the decreased dollars available from consumers.
The evidence is apparent in the grocery industry as major chains offer heavy discounts to draw customers. Safeway ads are replete with bargain prices and new techniques to attract customers including shopper cards that offer returning customers lower prices. Smaller chains and local grocers without volume buying power experience lower revenues and profit as margins decrease in order to maintain their customer base.
Kohl’s, Wal-Mart, Home Depot and Friedman's Home Improvement advertise heavily, offering bargain prices in heavy competition and are assessing consumer trends to draw from a finite number of customers. As layoffs have become necessary, remaining employees are trained to provide better customer service and to make sure shoppers find what they are seeking. Consumers not concerned with service are turning to the Internet seeking bargain prices.
Retailers will need to adjust to the market by refining their operations and adjusting inventories to meet consumer demands. More importantly, however, will be local government’s involvement in facilitation of local business.