Retailers making bold moves to post growth despite recession’s bite

For Larry Monte Jr., there’s only one way for a business to thrive in a recession: expand, market yourself aggressively and listen to what your customers want.

The owner of Monte’s cigar shop on San Mateo Boulevard in Albuquerque has taken his own advice, and it has paid off. So far this year, his business is up 20 percent over 2008.

First, Monte expanded. He bought a stand-alone building, moved out of a strip mall that the shop had been in for more than 30 years, built what might be the largest humidor in the U.S., expanded his hours and began marketing the new and larger store and cigar club with a vengeance.

“Half the people I know told me I was crazy for moving and expanding,” Monte said. “But being in business is about risk, and you have to manage that risk. I have watched so many businesses retreat and fail. I think you need to be aggressive in tough times.”

The recession started hitting New Mexico’s retail industry in October 2008, when the sector lost 800 jobs over the previous year.

The job losses have increased, with the sector down 3,500 jobs in February from the year before, according to the New Mexico Department of Workforce Solutions. The downslide is expected to continue, says agency economist Mark Boyd.

“The economy is weak, and people are not spending money the way they used to,” Boyd says. “We’re not just down 3,500 jobs in February, but we’re down the growth that is typical of the retail trade in New Mexico. It’s one of those industries that usually adds jobs.”

Despite the gloom, Monte threw grand opening parties for his retail shop and the cigar club, Club La Gloria Cubana. The parties featured free Cuban coffee, food, chocolates and some complimentary cigars. The cigar club opening was advertised with a live broadcast from a local radio station. Monte also keeps the store open an extra hour every day and decided to open four hours on Sunday.

At Robeks Fruit Smoothies and Healthy Eats, owner Michaela Higgins concentrated on customer service to boost her business, which she says is up a little over last year.

“These people come in and spend their money on something I want to sell them. I love it, and I love them,” Higgins said.

Customer service at Robeks means greeting customers by their first names, explaining to them that the smoothies are all natural with no syrups or sugars added, and doing everything to make the customer want to return.

Higgins, who has been in business for three years, says her customer base is growing.

“I have done some radio and print ads, but most of my business has come through word of mouth,” Higgins said.

Larger retailers are trying to acknowledge the recession in their advertisements.

“They’re creating marketing messages around the recession instead of denying it. They’re addressing the economy,” said Ellen Davis of the Washington, D.C.-based National Retail Federation. “We are seeing the economy being at the forefront of much of the advertising.”

Many retailers are changing their merchandise and product placement to address the economy.

They’re stocking less expensive goods and putting that merchandise in prominent positions in stores, Davis said.

From an operational standpoint, retailers are cutting back on inventory, closing underperforming stores and cutting back on employees’ hours.

“At this point, the retail industry is in survival mode and is doing everything it can to continue to operate the business while eliminating projects and initiatives that will not drive short-term growth,” Higgins said.

Small businesses have an advantage over large retailers because they can react quickly to the downturn, Higgins said.