| A year ago in Sioux Falls, only a few hints suggested the serious trouble lying ahead for the nation's economy. The city's sales tax receipts were coming in ahead of the 2007 tally, and the unemployment rate of 2.7 percent was among the nation's lowest. Yet food and gas prices were rising and anxiety about the future was surfacing among families and small-business owners. That's why the Argus Leader decided to follow four separate families and Sioux Falls business owners through the upcoming months. The goal was to portray the effects of the shifting economy in human terms. So, last May, we introduced Pat Gustaf, Mark Griffin, the Micah Brunz family and Delilah and Quentin Parsons. Through the months that followed, their lives and financial situations changed sharply. We watched their stock market portfolios dive and their job situations shift. The business owners made cutbacks, changed marketing strategies. One had to lay off an employee. The families found ways to economize, still tried to save money and watched and waited like the rest of us. Here's one of their stories: LEWIS DRUG • What it Is: A regional drug store and pharmacy retailer • Founded: 1942 • Second-Generation Family-Owned: Mark Griffin, President and CEO • Employees: 1,000 • View for the Year: Cautiously optimistic that sales will be up this year March was a better month for Mark Griffin's Sioux Falls-based Lewis Drug. And now he hopes the thaw that comes with spring will translate to the retail business as well. After suffering a monthly decline in sales in January compared to the previous January, Lewis experienced a percentage-point increase in February and two points in March. That makes him cautiously optimistic that the economic downturn soon might be bottoming out. Q: What's behind your renewed sense of optimism? G: Spring always brings optimism in the retail business. We have Easter falling late, and when Easter falls late, with the weather changing more reliably in April, you gain momentum. Typically, that momentum will carry you into the garden center season. May is a large month for us in retail. You always look forward to spring, and look forward to momentum carrying from Easter. Q: So March was better for you? G: March was surprisingly good. Because of the doom and gloom preached by the national media and the politicians, we were structuring for the worst case scenario. So far, because of the wonderful environment Sioux Falls and the surrounding areas have in our market, we're pretty well insulated. To say we're living in a bubble isn't too far off. That's a good bubble. Q: Then you're seeing people starting to spend more? G: We see a sense of optimism creeping into the marketplace. There's a little bit of loosening up in the retail business, particularly if you're in the right niche. If you're Saks Fifth Avenue or Neiman Marcus, it's a different ballgame. But because of our niche, people always need medicine and health care. They need the staples and basic goods. We cover those bases very well. Q: You've talked about tightening your inventories, ordering smaller quantities and adjusting overhead costs so you're making fewer trips from distribution centers. Will that continue? G: Yes. We're a little more optimistic, but we're not ready to throw away the controls that we've implemented. Q: So you see your business strategy remaining the same this year? G: With a caveat. The economy is still a high-wire act without a safety net, and retail certainly qualifies under that description. But we feel a little better now. We will plan accordingly. It's my personal belief that retail business, the recession and the economy, will pull out by the end of the year. I think we'll see real spending at Christmas again. Q: No layoffs planned among your 1,000 employees? G: No. Q: Have you seen any effect yet from the stimulus legislation? G: No. I don't think it's really affected our customer base. The impact of the plan they're putting in will be a year or two down the road... a delayed reaction. Q: Has participating in this yearlong look at the economy and how it affects your company had any impact on you personally? G: It probably has given me more empathy for everybody because I do follow the other participants and their challenges and issues. I think the sensitivity factor is definitely part of that reading. |
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04/19/2009
A rosier view after tough times
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