Austin retailers attempt to attract pre-recession profits during holidays

This holiday season, some local retailers are hoping that the relative strength of the Texas economy will boost consumer confidence enough to dray in shoppers like in pre-recession times.

In the past year, local business owners have seen a downturn in revenue, said Dean Lofton, the executive director for the Austin Independent Business Alliance.

The alliance, however, has several ideas in mind to encourage residents to support independent businesses, including hosting the seventh annual Austin Unchained challenge on the Saturday after Thanksgiving.

Austin Unchained asks residents to purchase only from locally owned merchants for one day in hopes that consumers will eventually break the habit of solely shopping at chain stores. People do not need to make extra purchases. They are just asked to buy what they normally would from independent businesses instead of chains, Lofton said.

Last year, independent businesses in Austin showed a 4 percent increase in sales tax revenue the week of Austin Unchained, the largest increase in two years, according to the alliance’s Web site.

“With local business owners seeing slower sales, it’s more important than ever to buy local,” Lofton said. “We need to draw attention to not only the cultural value of these businesses, but also the economic impact they make on Austin.”

Lofton said two studies of the Austin economy inspired the alliance to begin Austin Unchained to help people realize how shopping locally circulates more money into the city’s economy.

A 2004 Big Box Retail and Austin report stated that if everyone in Austin shopped locally for one day, $14 million would return to the Austin economy. In 2002, BookPeople and Waterloo Records & Video generated a combined $6.9 million in the local economy compared to less than $1 million from Borders, according to the most recent comparison report released by Civic Economics in 2003.

To reach more consumers, the alliance and affiliated businesses have used social media Web sites like Twitter and Facebook, Lofton said. The association has also recently purchased five commercials to air on Time Warner Cable, Lofton said.

The Austin-Round Rock metropolitan area ranks as one of the top economies in the United States, but consumers do seem to be spending less based on how much sales tax the city has collected, said Greg Hammond, the director of research for the Austin Chamber of Commerce.

In October 2009, Austin was down 11 percent in sales tax revenue compared to October 2008, according to data collected by the chamber.

“There’s no hard data or good way of knowing how people in Austin will spend in the future,” Hammond said.

Austin resident Lucie Kolar said that although members of her family have never been big spenders, the current state of the economy caused her to adjust some of her spending habits. One of the ways she has curbed spending is by buying more used items.

In August, Kolar and her husband purchased a used car for their 22-year-old daughter. After beginning a home remodeling project last year, she has also begun looking at consignment stores to purchase used furniture. Chairs that cost $600 in new furniture stores can go for as low as $150 in consignment stores, Kolar said.

“It’s sad how the economy has affected us all, and people every day are losing their jobs,” Kolar said. “[My family] is just watching what we’re buying and making sure we’re not spending money on unnecessary things.”