Downtown Scottsdale retailers struggling - East Valley Tribune: Business

Downtown Scottsdale retailers struggling

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Posted: Tuesday, June 17, 2008 9:59 pm | Updated: 12:07 am, Sat Oct 8, 2011.

A handful of tourists strode along the shady side of Brown Avenue in Old Town Scottsdale, stopping in T-shirt stores and gift shops, soaking up enough air conditioning to survive the sizzling 112-degree heat.

Downtown Scottsdale sales drop in first quarter

A few blocks west in the art gallery district, you could roll a bowling ball down the sidewalks and never hit a pedestrian.

Soaring temperatures and a slumping economy have hit downtown Scottsdale retailers with a dearth of shoppers and dwindling sales revenue.

Retail sales have been in the doldrums nationwide for the last couple of years, a factor of budgets pinched by employment worries and rising fuel costs that also raise the price of necessities like food and clothing.

People are shopping, but spending most of their disposable income at food stores, drug stores, discounters like Target and Wal-Mart, and wholesale clubs like Costco, according to the International Council of Shopping Centers.

For May, the national retail group reported wholesale club sales up 4.6 percent, drug store sales up 3.2 percent, and discounters’ sales up 3 percent compared to a year earlier. At the same time, sales at specialty clothing stores declined 6.5 percent.

That’s not promising news for Scottsdale’s downtown retailers, since the center-city retail core is mostly filled with specialty shops and eateries.

To add to their woes, many of the shops cater especially to out-of-town visitors. And hotel occupancy in Scottsdale and nationwide is down too.

About 70 percent of purchases at Herman Atkinson’s Indian Trading Post get shipped to someplace else, said Marilyn Atkinson, who runs the 54-year-old family business.

Atkinson said she saw signs of the weakening economy in 2006 when she placed merchandise orders and received the goods in five days instead of the usual three to four months.

“You know they are trying to unload inventory from the warehouse,” she said. “That was an early indicator.”

So she braced for a down cycle. It isn’t the first she’s been through. “You build capital in good times, you order less inventory, you build rapport and a base of repeat business. You have to have a built-in following,” she said.

In the new collection of upscale specialty stores dubbed The Mix, two retailers have already left, although The Mix landlord and retailer Jennifer Croll said one of the two is talking about moving back in.

The Mix only debuted in November. In February, it was swarming with affluent out-of-towners in Scottsdale for the parties surrounding Super Bowl XLII. On Monday, there were more shopkeepers than customers.

“This economy creates a tough situation for business people,” Croll said. “I wish we had opened the project sooner, wish we were further ahead going into (recession), but summer is always a tough time in Scottsdale.”

Amy Yount, who moved her boutique from Biltmore Fashion Park to The Mix, said April and May sales were better in downtown Scottsdale than in the Biltmore. Sales are pretty dead so far in June, but she expected that.

“If you’re shocked it’s hot in summer, where have you been?” she said.

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