Hot Weather Blamed for Tepid Sales

A myriad of culprits are being called out for what some downtown Laguna Beach retailers are calling “the worst summer ever.”

Hot temperatures, anomalous rainstorms, high prices, spending-cautious consumers and foul-mouthed panhandlers are among the complaints voiced by local merchants about a summer leaning towards laid-back.

Even so, not every sector of Laguna Beach’s tourist-dependent economy is experiencing the doldrums.

While retailers typically count on the Christmas shopping season as their top sales period, local retailers rely on summer’s tourist influx to buoy their bottom line. The wave for retail sales this summer is pretty “flat,” Heidi Miller and Mark Christy, two long-time downtown retailers, agree.

“Everybody’s saying it’s the worst summer ever,” said Miller, owner of Tight Assets women’s apparel on Coast Highway and the World Newsstand on Ocean Avenue. More day-trippers spending less cash is one reason, she said, yet even her seasonal sun-worshippers are holding tight.

“I have regular customers who come here for the summer and usually spend $1,000 when they shop and, this year, they’re spending $400 to $500,” she said. Parking concerns and heavy traffic in and out of town put visitors off, she said.

Of his five Hobie shops along the south Orange County coast, Christy, who also owns Tuvalu home furnishings on Forest Avenue, said surf shop sales are lagging, too. “This year’s been more unpredictable than most,” he said, referring to a gloomy May and unusual weekend rains in July. “We were expecting more of an uptick than it’s been, but it’s not a train wreck.”

By offering early summer sales, it’s obvious downtown retailers are desperately trying to attract customers, Miller said. “Come on, you don’t have a sale in the middle of summer unless you’re really hurting,” she said.

“Sales are fairly significantly down. I can tell you for sure my business is down,” said Kavita Reddy, head of a retail task force and owner of Buy Hand, a handmade-gifts shop south of downtown that features local crafters.

The Chamber of Commerce task force meets later this month to track summer sales trends, said Reddy. “We’ve gotten calls from merchants wondering what’s going on with sales,” she said.

Actual sales-tax revenue figures that provide an objective yardstick of economic vitality won’t be finalized until October, said city finance director Gavin Curran, and the city won’t receive Laguna figures until nearly January.

“I can tell you we seem to have a lot of people riding the trolleys, using the parking meters and the parking lots and we seem to have a fair amount of people in town,” said City Manager John Pietig. “From the city’s perspective, things seem to be going well.”

Hotel occupancy is also going well, according to Atlas Hospitality Group president Alan Reay. In year-to-date comparisons provided by Smith Travel Research, he said this year’s occupancy rate for south Orange County hotels is 77 percent; last year’s was 73 percent.

With 248 rooms and a presidential suite at $10,000 a night, the Montage resort in South Laguna reports nearly full occupancy this summer. “We’re having a fairly typical summer,” said spokeswoman Leah Giuliano.

While the city may be succeeding at drawing visitors, its summer cash-cow is a detriment to downtown stores, says Joe Browne, who has owned the Shoe Cellar on Forest Avenue for 23 years. Browne points to higher parking meter prices as a shopping deterrent.

The city increased its downtown hourly parking meter rates from $1.50 up to $3 in June, said Ben Siegel, the city’s community services director.

The higher-priced meters are intentional, he said. “We think it actually helps merchants,” said Siegel by forcing visitors to park in peripheral lots for a lower all-day fee and then take the free trolley to town.

Most downtown retailers agreed with the rationale, he said.

Several underlying patterns are influencing receipts by Laguna’s merchants, according to Reddy. Beachgoers don’t tend to shop and, instead, spend money on food. More people are opting to shop online. And the biggest factor, she theorizes, is that the middle-class is being squeezed out.

The food-serving sector of Laguna’s economy may benefit from another trend. For the first time ever, people spent more money dining out than at grocery stores, according to U.S. Commerce Department data for March. Major department stores are recognizing that one way to a shopper’s heart is through his or her stomach, according to a Forbes report.

The Tommy Bahama store and Bar and Grill in Laguna Beach is in the right place at the right time, said Rob Goldberg, the company’s vice-president of marketing.

“There’s no doubt when there’s a store with a restaurant, there’s a 25 to 35 percent increase in sales,” he said. The first Tommy Bahama in Naples, Fla., also offered a full-service restaurant 20 years ago, Goldberg said. With the velocity e-commerce is generating, retailers are “scrambling” to get consumers away from their computers and into stores, he said.

Another factor affecting shoppers, said Miller, are transient panhandlers. Other retailers, who requested anonymity, agreed. “They sit outside of my store begging for money,” said Miller, “and when somebody doesn’t give it to them, they’re using four-letter words. Who would come here with that? I wouldn’t.”

Other shop owners say summer’s been a breeze, albeit slight. Joe Hanauer, owner of the Pottery Place bevy of shops and restaurants, surveyed 50 retailers in the surrounding HIP shopping district from Thalia to Bluebird streets. No one reported lower sales in July over last year and most reported a 3 to 10 percent increase, he said Wednesday.

“We have regular summer visitors who buy here every year so our sales are consistently strong,” said Lisa Childers, manager of Laguna Beach Books, located in the Pottery Place and operated by Hanauer’s wife, Jane.

Sales are strong enough, says Christy, to expand his home furnishings store. “If we were pessimistic, we wouldn’t be opening a second Tuvalu in San Clemente,” he said.