How small stores determine price cuts

TEXT OF STORY

Bill Radke: So the verdict on holiday sales so far is shoppers are buying more items than last year, but they're spending less money in the stores -- they are holding out for deep discounts. Now, the big retail chains have been able to come up with those price cuts. But what about the little guy? From our Entrepreneurship Desk at Oregon Public Broadcasting, Marketplace's Mitchell Hartman reports.


Mitchell Hartman: Here's the problem for small-store owners, says retail analyst Patty Edwards: Without sophisticated inventory tracking and market research, stocking for the holidays is pretty much a crap shoot. And in this economy, the margin for error is slim.

Patty Edwards: They don't have multiple millions of dollars to help run their dress shop, for example, and they're having to use their best intuition on how much inventory to carry, how to price it.

Gina Morris has a dress shop . . .

Gina Morris: Hi there. Oh please! Come on in.

Radish Underground has been open one year in downtown Portland.

Morris: It's a little bit of a slow start, but we're definitely feeling a vast difference from last year, when it was people literally scared to spend their money.

This year, Morris has ordered cautiously, but she doesn't plan to cut prices to compete with bigger retailers.

Next door is Martinotti's. The shelves are piled high with Italian chocolate and vintage wine.

Frank Martinotti So we tend to see customers with the income to buy some very nice things. I didn't really hold back much this year on my ordering. My mother said, "Frank, be careful," and I was.

Frank Martinotti says so far, his sales point to a much better holiday season than last year.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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