ECONOMY: Local discount businesses prosper in tough economic times

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October 10, 2008

By Joe Olenick<br><a href="mailto:olenickj@gnnewspaper.com">E-mail Joe</a> The Lockport Union-Sun %26 Journal Fri Oct 10, 2008, 12:59 AM EDT

The first day a coupon for Wayne’s Appliance ran in the Union-Sun & Journal, owner Wayne Hendler said people came in that same day to redeem it at his South Transit Street store.

It’s an indicator that businesses such as his can thrive in tough economic times.

Since the store opened Sept. 15, Hendler said business has been very good. Some of the first-day customers have returned to the store looking for different things. The refrigerators are the biggest draw, but once people come in, they find other items.

“Usually we just advertise our refrigerators,” Hendler said.

Wayne’s Appliance offers used washers, dryers, refrigerators, stoves, dishwashers, televisions and mattresses. Some of the most popular items are refrigerators and stoves, things people are going to need regardless of the economic situation. When refrigerators go down, people need to replace them quickly or they’ll lose some foods that need to be kept cold.

“We have ’fridges for $100,” Hendler said. “Where are you going to find that?”

He added the store has flown through window air conditioning units and electric stoves. Microwaves have been moving pretty well, too, Hendler said.

On Thursday the stock market fell again, with the Dow Jones industrial average finishing down 678 points to a five-year low of 8,579.19 points. As the economy continues to worsen, discount retail shops become more attractive options for those who want to save money. And that includes looking for things such as used appliances.

“People can’t afford new,” Hendler said.

Hendler actually started his business 11 years ago, selling right out of his warehouse. He opened a location in Williamsville about a year ago when he began to carry more products for his expanding business. Hendler decided to open a store in Lockport after his wife kept encouraging him to open one in the city. Most of his deliveries were coming from Lockport, anyway.

When money is tight, people search out cheaper groceries, too. One option they are choosing is Aldi’s stores, as a way to cut costs without eliminating the quality of the groceries they need, spokeswoman Martha Swaney said.

“We’re certainly seeing new people who are finding out about Aldi’s,” she said.

To keep its prices low, Aldi’s uses several strategies to cut costs and pass those savings on to consumers. Swaney said Aldi’s cuts unnecessary expenses by keeping stores small and focusing on selling about 1,400 items that are bought frequently by consumers. Products that are in highest demand are only available in certain quantities. Still people can find what they need, she said.

“We offer 90 percent of items found on the average shopping list,” Swaney said.

That’s significantly less product than 95 percent of supermarkets who carry all kinds of brands. Aldi’s brand goods are also sold, and they compare favorably to the national brands, Swaney said.

“We surprise with our quality,” she said. “Products are rigorously tested.”

Aldi’s also encourages people to bring their own bags or reuse old bags, cutting another cost found at other supermarkets. There is also a cart return system where customers pay a quarter to use a shopping cart. They get the quarter back when they return the cart. It cuts down on any possible parking lot damage to cars, and the store doesn’t have to hire employees to chase down missing carts.

Swaney said Lockport is a competitive market, but Aldi’s usually is successful in such markets.

Financial recovery may be a ways off nationally, as experts have said the economy will continue to worsen. One concern that has improved a little is gas prices. Although the price per gallon has dropped, the average is still over $3.50 a gallon in the area. Will that affect the discount business? It might not a problem for Hendler.

“We deliver,” he said.

Contact reporter Joe Olenick at 439-9222, ext. 6241.

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