Driving habits hurt independent businesses

July 26, 2008 12:40:51 AM PDT
Americans' change in driving habits is actually hurting some independent neighborhood business owners who rely on suburban consumer dollars. Gas prices are not only keeping shoppers closer to home, but away from some specialty stores.

On a Friday afternoon, the only ones shopping at Reis Gifts in San Jose, are locals specifically those from the surrounding neighborhoods. It is not what owner, Paula Reis expected when she moved from her Alum Rock location in East San Jose, in November.

"They were supposed to follow me" said Paula, the Reis Gifts owner. "I have customers that live in Milpitas, that live in Fremont and they won't drive, I have not seen them since Alum Rock."

She blames their disappearing act on gas prices. So does her neighbor, at Bon Vivant Nails.

When he opened in December, he had customers from Milpitas, Campbell, and Mountain View.

"Because of the gas prices we really saw that growth slowdown, people weren't willing to drive 10 miles away," said Alex Lopez, the Bon Vivant Nails owner.

"An increase in gas is going to shape the behavior of consumers," said Marco Pagani, an Assistant Professor of Finance from SJSU.

Pagani says the ones changing their habits the most are those living in the suburbs; more specifically, homeowners who didn't mind driving farther to restaurants and stores, especially if it meant saving more on their homes.

"Now that gas is so expensive it's become more expensive to drive to this house, so the lower price for this house cannot compensate anymore for the higher price of transportation," said Pagani.

"We eat here local, I liked to go to Santa Cruz once a week, now it's once a month, so I try to stay more local," said Bernie Levine, a San Jose resident.

At Calee's Lilies in the Willow Glen Neighborhood, there's been a 30-percent drop in out of town customers. Even brides planning their weddings are trying to save on gas.

"They're less apt to make the trips down that it takes to plan everything and get everything set up," said Calee Grabinski, from Calee's Lilies.

And so the florist, at times, goes to them. In a time of tightened consumer spending, it may be those offering exceptional service who maintain customer loyalty.


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