Retail pays a price in Laguna
The Laguna Beach business slowdown used to happen only in the gray days of winter. Now it’s happening year-round.
Retailers in particular started worrying last summer when sales were not matching the nation’s economic turnaround. Combine that with a soft holiday season, and now it’s not surprising to see more commercial vacancies and other obvious impacts.
A simple stroll through town proves the growing fear: Something is not quite right in paradise. The city suddenly has become the discount sign center of south Orange County:
• “Up to 50% off.”
• “Only Sale of the Season: 60% off.”
• “Winter Sale.”
• “Pre-Spring Sale.”
“The fate of retail has been tough everywhere, including Laguna Beach, so I think we’re starting to see the fallout of that,” said Kavita Reddy, owner of Buy Hand and a Chamber of Commerce board of director.
Reddy is leading the board’s retail committee and has been tracking the situation.
“Business is definitely down for pretty much all retailers,” she said. “I personally think it’s probably going to get worse. The issue is people are just shopping less, and when they do shop, they shop online. People are shopping less because they seem to be allocating their dollars to eating out more and traveling.”
According to city and state records, overall restaurant revenues are increasing, but retail is flat at best. And without a long-term plan, the city, while flush with restaurants, has too much retail space to rely on $40 swordfish.
“The mix is terrible from the standpoint of retail sales,” said Dr. Dennis Myers, a longtime resident and volunteer who has tried to help analyze some of the city’s business issues. “You take out 40% for food and beverages, and probably another 40% for hotels, and you got very little left.”
A retired Mitsubishi executive and change management specialist, Myers led a city-sanctioned business task force in 2009 that issued a retail analysis report, which clearly showed a lack of retail mix and growth.
Eventually, the report said, this lack of diversity would cause problems, so there were some recommendations. But what happened to those free recommendations?
“All that came out of it was the city thought we ought to have some planted pots, and the keepers of the stores should wash their windows,” Myers said.
Reddy, meanwhile, hopes that the city follows through on its commitment to improve downtown and help facilitate a more flexible strategy to challenge the online onslaught.
“I think it’s the new reality now and we all have to adjust,” she said. “Online shopping is not going anywhere. It’s just so convenient. It’s really a big, big paradigm shift.”
While online shopping is not new, it’s encroaching in areas where it never played before: local, specialized goods. Plus, in Laguna, 80% of residents commute to work outside the city, making shopping — and parking — easier elsewhere.
“Online shopping is just beating up that very mediocre downtown shopping area,” said Myers. “There’s a whole group of people in town that don’t recognize that. They are living in a time gone by. It’s a slow death.”
Reddy admits that businesses need to adapt — and quickly. If the city can help loosen the reins on critical adjacent issues like parking, then that would be a huge lift.
“It is tough, but I think there are enough voices talking about it that I hope we can make some change,” she said. “Understandably, in a small town you have a lot of people who show up and they don’t want to see things change. Then you have the merchants who have to change or they’ll be out of business.”
The chamber lists nearly 50 commercial properties currently for lease or sale in Laguna. Many are small shops; some are bigger properties. For example, both the Coyote Grill and Ristorante Rumari buildings are up for sale. That doesn’t mean the restaurants would close if the buildings changed hands, but they are on the market.
Either way, restaurants and bars are not slowing down. If anything, they skew an economic picture in Laguna that is troubling.
One way or another, the business composition of Laguna will change, regardless of how many consultant reports come and go.
The question is, will we create our own destiny in a smart, creative way or simply let market forces do it for us?
DAVID HANSEN is a writer and Laguna Beach resident. He can be reached at hansen.dave@gmail.com.
