February 2009 Archives

As we are confronted with an economic uproar, consumers get used to potential changes in their standard of living.  Businesses are having difficulties keeping their establishments afloat.  Although, it seems one business in particular still can see the light of day.

According to the U.S. Census Bureau, the gross sales for beer, wine and liquor stores, in 2007, has raised $9.5 billion since 2002.

What could be better than an ice-cold beer at the end of the day?

In the midst of a recession, are consumers indulging in happy hour?  Local liquor stores are saying yes.

A trend has begun among certain liquor stores; while all sorts of companies try and pull through during a time of financial crisis, these stores are making more than they thought.

Michael Myers, owner and manager of Mom and Pop's Liquor Store on Massachusetts Street, said that the recession hasn't affected his store much.

"This is going to sound strange but, if anything it may have helped," Myers said.  "It's cheaper to buy alcohol and take it home than go out to a bar or restaurant."

Myers said his store is doing great and that sales have improved.  His gross income from January 2009 has gone up compared to January 2008; way more than he expected.

Diane Spurling, owner of Diane's Liquor on Massachusetts Street, said that her overall sales have done better since the downturn of the economy.  Spurling, who has owned Diane's Liquor for 15 years, said that even though sales are doing better, she has noticed that her customers have changed their spending habits.

"The person that used to buy 30-packs are now buying 12-packs," Spurling said, "that's where you see them downsizing."

Cory Nelson, Overland Park senior and an avid customer at Diane's Liquor said that he has cut back on his usual alcohol purchases.

"I would say that I have been going for the cheaper beer these days," Nelson said.  "I know I don't want to stop buying it, so I figure, with the slump that we're in right now, I'll cut the corners a little."

Larry Johnson, manager of the Cork and Barrel on Mississippi Street has also noticed his customers going for the less expensive items.

On a different note, some customers just can't let go of their more expensive tastes of alcohol.  Danielle Littman, Chicago senior, said that she still buys what she wants at liquor stores.  Her favorite brand of beer is a Craft beer brewed in Colorado.

"I love New Belgium Brewing Company," Littman said.  "But when I have a lot of people over or a party, I definitely go for 'Bud heavy' [Budweiser] because it's cheaper."

Budweiser, along with other brands of beers like Michelob, Busch and Natural, is produced by one of the major brewer's in the United States, Anheuser-Busch.  And, just like these community liquor stores, they have had increased revenues and sales during the recession.

According to iStockAnalyst.com, "The Commercial Appeal" by Jane Wardell, Anheuser Busch has had more earnings in the latest quarter even with concerns of increasing prices of raw materials.

Reports from Hoover's, Inc. showed that in December of 2007 Anheuser-Busch's Net Operating Cash Flow showed an 8.5% increase from December 2006.  Their total revenue from 2005 to 2006 was $681.4 million and since the last report in 2007, the total revenue raised by $287.2 million, leaving them with total revenue of $968.6 million in that year.

       

Lawrence flower shops had a sweeter Valentine's Day than expected this year.

"We thought it would be a lot worse because of the economic downturn," said Heidi Yoder, an employee of Bittersweet Floral, 514 E. Ninth St.

John McCaffery, owner of Bittersweet, said the store actually saw a 10-to-15 percent increase in Valentine's Day profits, selling almost everything it had in stock.

"That's why it was good, "McCaffery said. "There were no leftovers."

Local flower shops showed no signs of suffering from the National Retail Federation's predicted 15 percent decline in Valentine's Day spending, with sales being the same or better than last year. The NRF estimated that consumers would be spending an average of $100 on Valentine's gifts, about $20 less than the previous year.

Heather McKeel, head designer and manager of Englewood Florist, 1101 Massachusetts St., noticed that people were spending more money than usual in the store.

"It was kind of a strange Valentine's Day," she said.

Jonathan Shoulta, Lenexa freshman, was one of those customers. He found himself the day before Valentine's, frantically trying to find a gift for his sweetheart. Shoulta opted for the traditional Valentine's Day fare: dinner, chocolates, a teddy bear, and, of course, a dozen red roses.

"Fifty dollars was worth it," he said.

Valentine's Day is the biggest holiday for florists, accounting for 25 percent of holiday sales for the year, according to the Society of American Florists.

"It's a big, dang deal," said Sharon Reynolds, president and owner of Owen's Flower Shop, 846 Indiana St. "Imagine doing two months of work in three days: it's just hundreds and hundreds of flowers a day."

"It's a florist's worst nightmare," McKeel said.

Most flower shops hire extra help the week leading up to Valentine's Day. Both Owens and Englewood hired additional workers this year, nearly tripling their staff for the holiday.

Reynolds estimated that cut flowers consisted of 80% of sales. Gifts such as candy, balloons and stuffed animals accounted for 8% of revenue.

Reynolds expected sales to be down 15% this year. To her surprise, sales actually increased 28%. Though the average order was down, Reynolds thinks the increase is a result of the advertising Owens did this year. Part of Owens success was due to the store's Jan. 1 merger with University Floral. Many of University Floral's customers took their business to Owens. If anything was going to cause lost revenue, she said, it would be the influence of Internet sales.

"Internet has changed everything," Reynolds said. "It's hard to establish that report when you don't come into the store."

In the face of a recession and advertising difficulties, Reynolds has no doubt Owens will stay afloat, citing that its foothold in the community and strong clientele base keep the business alive and well.

"It's a challenge, but it's a case of the strong survive," she said. "We're going to weather the storm."

Seth Dolan spent many hours one Saturday afternoon glued to a computer screen instead of watching KU beat Kansas State in basketball.

 

But Dolan wasn't writing a paper for an English class or finishing a project for History. Instead, Dolan, Roswell, Ga., sophomore, finished an application to transfer to the University of Georgia next year.

 

"Transferring to UGA is a last resort option for me, but it's getting to that point now," said Dolan.

 

While the nation's economy continues to worsen, Dolan is one of many students looking for alternative methods to handle the rising costs of college. 

In the 2008 academic year, non-residents made up 30 percent of the student population, according to registrar records. 

Source: Student Counts - State by Campus, various years, Institutional Research and Planning

Though the majority of students at the University continue to come from Kansas, in 2008, students from al 50 states attended the University, with the majority of non-residents coming from Missouri and Illinois. However, as the economy worsens and tuition costs continue to rise, these out-of-state students may choose instead to stay in-state for college.

 

Though only a small drop from 2007, non-resident enrollment has steadily declined since 2000, as tuition costs continue to rise. During the 2009 academic year, non-resident undergraduates who are not first-time freshman pay more than $17,000, which is a $1,000 increase from tuition costs for 2008. In comparison, full-time undergraduates who are residents of Kansas pay a little more than $7,000, only about $400 more than they paid in 2008, according the Registrar.

 
Source: Annual, Academic Year, Tuition and Required Fees 2008-09 Composite Report, Big 12
While the University of Kansas remains one of the most affordable public universities in the Big 12, out-of-state students paid over $16,000 in 2008, over twice the amount paid by in-state students.

 

 

Rather than take out loans to meet growing costs or drop out of school altogether, out-of-state students like Dolan, who received no scholarships to attend the University and whose mother is a single parent, resort to different measures, like applying for in-state residency status or transferring back to schools in their home state.

 

In Fall 2008, the University had more than 300 applicants for residency, said Renee Wiesner, Assistant Registrar in charge of residency and fees.

However, students do not merely need to live in Kansas for an extended period of time in order to qualify for in-state residency. They must meet four specific criteria, which include verification that they live in Kansas for reasons other than education. 

 

For students like Dolan, who are only in Kansas to attend college, and for Kansas residents who initially went out-of-state for college, transferring back to a university in their home state is a more viable option for saving money.

 

"There has been much more transferring going on nationally in recent years," said Lee Furbeck, Associate Director of Admissions and Scholarships. In 2008, 1,230 residents transferred to the University, a large increase from the 995 residents who transferred in 2007, according to the Registrar.

 

While students transfer for many reasons, economic issues are a main cause, and public universities tend to fair well in harsh economic times, said Furbeck.

Although the University remains one of the most affordable public universities in the country, according to publications like the Princeton Review, out-of-state students still have trouble affording the costs.

 

If Dolan decides to transfer to UGA, he will pay about the same amount in tuition as residents at the University of Kansas and will be eligible for the HOPE Scholarship, an award open only to Georgia residents who remain in state for college.

 

Yet Dolan, who considered transferring to UGA after the fall semester of his freshman year, is still holding out.

 

"I finally feel comfortable here," Dolan said. "I have a great life here, and I can't imagine going to school anywhere else.  But I guess I might have to."

From the runway to the streets, it is obvious that skateboard culture has recently become an influence on youth fashion. Bright colors, crazy patterns, and unexpected style combinations are among some of the characteristics that define this growing trend. The style stems from Japanese Harajuku street fashion and has adapted to American taste, by incorporating baggy or heavy clothes common among skateboarders. This style can be seen all over the country and the style has a special presence in Lawrence. It has spread from skateboarders to the general public though exposure from an increasing number of fashion web sites.

Web sites like High Snobiety, Hype Beast, C to the JL, and Sneakhype are among some of the sites that have propelled board fashions. While these sites are in competition with each other, this industry differs in that promoting other sites helps to promote their own site as well. Competitors are more like partners. By working together, the companies can increase awareness of the culture and increase popularity for their site. Unlike other businesses, these sites make their money though the amount of traffic their sites receive. The goal is to increase frequency and time on the site, allowing better sales for featured ads. Making money is important, but these sites really strive for visibility and appreciation of the culture. By first establishing a web site known for featuring fashionable products, these companies can later develop into a brand and sell their own products. Sneakhype has already begun this transformation.

Two KU students, Pat Galbraith (20) and Eric Giroux (20), created Sneakhype on July 24, 2008. It features various brands of clothing, art, music, and architecture.

"Sneakhype goes beyond clothes and features anything that exudes freshness. It's more about a lifestyle than just a look," said Eric Giroux, one of Sneakhype's founders.

Sneakhype was developed through the site Blogger, but after increasing in popularity, the site transferred to a different server and registered a domain. The average number of visits to the site was 20,000 per day, but after registering a domain the visits doubled to more than 40,000 per day. The increase in visits provided confidence and the company felt ready to sell some products of its own. Sneakhype featured and sold its company's first T-shirt on a small scale as a trial, selling 40 shirts and giving away some for publicity. The shirts were a good way to check the current strength of Sneakhype as a brand name and also make some money. Although Sneakhype does not yet make much money on products and advertising, the developers of the site do receive samples of products from companies it features. For now, Sneakhype serves as an online fashion magazine guiding those interested in skateboard style and further defining the style's identity. Sneakhype has gotten hits from many countries, but the highest rated are English-speaking countries such as the U.S., Canada, and the United Kingdom.

With the increasing number of sites like Sneakhype, many companies have realized the growing popularity of skateboard fashion and are trying to enter the market. Nike is one of these companies, with its new subsidiary, Nike SB.

"I think these big companies are figuring out that this is a sophisticated, progressive, and wealthy demographic that will spend a lot of money on clothes, so they want to get in on the spending. It's another group of people companies can sell to," said Pat Galbraith.

Instead of developing another brand for this style, some companies are collaborating with underground brands to reach a new audience with their products. The North Face is collaborating with Supreme to enter the market, developing a North Face jacket with the appearance of a chain link fence. Collaborating allows for a mainstream brand to fit into the underground style, while the underground style becomes more mainstream. The effect is a trade-off that provides more brand recognition for both companies.

"I would have never bought a North Face jacket before, but now that it's collaborating with Supreme, I'm actually considering it," said Dylan Skies, a frequent visitor of Sneakhype.

Florists may not be the first thing people think of in terms of struggling businesses in this economy. But just as any other luxury consumer item out there, flowers aren't usually on the top of everybody's list. Local Lawrence florists have been feeling the effects of the economy, but in an unexpected way.

Perhaps it's because of the recent merge between Owens Flower Shop and University Floral, but Owens has actually seen a large increase in sales in 2009 compared to 2008. In January and February of 2008, $97,784 was recorded as YTD. For January and February of 2009 though, Owen's reached $123,523 YTD revenue.

The clanging of free weights at Maximus Fitness and Wellness is a familiar sound to owner Eric Stein. More important, even in a shaky economy it means he still has customers. Unlike other businesses which are suffering nationwide, the clanging is showing no signs of stopping.

            Stein's Lawrence facility is one of six Maximus centers throughout Kansas, making Maximus the largest privately owned health club chain in the state. While many companies are downsizing or closing their doors, business for Maximus is actually growing.

            Stein says Maximus had a 10 percent in-store increase in 2008, and chain-wide numbers for January of this year are on par with last year's. The company plans to build two more facilities in Lawrence and one in Shawnee by the end of the year.

            "Right now the economy hasn't hit us," said Stein "We are one of the very few companies that are lucky to say that we are having this type of growth."

            January was the club's best month to date; the 1,600-member club gained 600 members in the last month, said Operations Manager Sarah Beffort.

            Fitness centers across the area are seeing their numbers increase as well, bucking nationwide business trends.

            Jason Grindel, general manager of Snap Fitness 24/7, notices the same growth.

            "The economy hasn't affected us as much, being just a small neighborhood gym," said Grindel. He said that an affordable membership fee of $35 per month helps keep business consistent.

            The season helps business as well.

            "It's the time of year when people are thinking about getting themselves in shape with their New Year's resolutions," Grindel said. "If anything, we've seen a spike."

            Health clubs are not the only fitness organizations seeing growth. KU Recreation Services and Intramural Sports are seeing steady use from KU students.

            The budget for Intramural Sports, about $95,000 annually, supports operating costs, equipment, and the salaries of 75 to 90 employees, according to Matt Beck, coordinator of intramural sports.

            Even with a sizable budget, cost concerns still arise due to rising costs. Beck is considering staffing cuts in order to continue the current number of programs and considering cutting back hours to reduce energy costs. He hopes to make the department more efficient without having to reduce the level of service to students.

            "We won't see less programs," said Beck. "But we probably won't see any more added either."

            The funds for Intramural Sports come from student fees each year, which helps to ensure that the budget remains steady despite cost issues in times of economic decline.

            "Even with budget cuts, students voted to raise fees," said Beck. "It must mean we are doing something right."

            Programs offered by the Lawrence Parks and Recreation Departments also remain strong.

            LPRD offers over 800 youth and adult recreation programs. The enrollment of the department's programs has increased greatly in recent months.

            "People are taking advantage of us more in difficult times," said Program Supervisor Jo Ellis. "I think our fees are much more reasonable for the same quality of programs that other places have."

            Ellis is constantly monitoring potential changes to her budget. In addition, she relies on other sources of income to supplement her programs, including sponsorships and donations.

Ellis also believes that strong community support for her programs keeps them growing in times of recession. She cites a recent Lawrence city council meeting in which the city was considering closing the Lawrence Nature Center, which is run by LPRD.

            Over 300 residents were present at the meeting to support the center.

She sees this as an example that the role of recreation in Lawrence will continue to grow in the near future.

            "I think we have such a good reputation that people continue to look at us through difficult times," Ellis said.

            While Ellis and others see such constant growth, local fitness and recreation centers are still seeking ways to ensure stability and to continue improving business for the future.

            "Our strategy to fighting a bad economy is just to give better customer service," Stein said. "As long as we really raise the bar on our services, business will continue.

            "We just have to work a little harder, that's all."

Untitled Album

Some KU students find economic bad times to be a bonus

Marcy Brammer, Wichita junior, sets a pile of clothes on the counter and reaches for her wallet.  

"That'll be $84.16," the sales associate said.

Brammer hands her her debit card and smiles.

"I'm not participating in the recession," Brammer said.

While most people are cutting back on expenses like designer clothing, some students find themselves with a larger disposable income than usual.

"It always seems like stores are having sales," Brammer said.  "I've been able to get things like designer jeans for less so I've been able to buy more."

Amena Mustic, Britches Clothing Store Manager, said Britches typically has deals or promotions on its premium denim and has seen a lot of college-age girls coming in and shopping.  Mustic said that the designer brands had been selling really well, especially with the nice weather.

Brammer is a member of the Delta Gamma sorority and has all her living expenses paid for by her parents.  In addition she also receives an allowance of $400 a month.

"I don't have to pay rent or utility bills and except for little snacks and eating out I don't have to pay for food," Brammer said.  "I know my parents aren't going to pay for everything forever so right now I'm just trying to take advantage of it."

Bailey Knott, Wichita sophomore, has also seen an increase in her shopping lately, primarily on more expensive clothing.  She said her parents typically give her a couple hundred dollars a month as spending cash.  Lately, Knott said she feels like she has been using it all up earlier in the month because she's been buying more clothes.

"I don't know if it's the bad economy or the season change but I feel like every store is having a sale and I just can't say no," Knott said.

Stores selling designer brands say they haven't seen a decrease in student shoppers even with the bad economy.  Nancy Knight, Shark's Surf Shop Manager, said she's seen a cut back in older people but not yet in students.

"Students have still been coming in and willing to spend 80 to 100 dollars on a pair of shoes," Knight said.

The National Retail Federation reported recently that the 2008 holiday shopping season saw a 2.8 percent decline in total retail sales.  It said that although sales in some areas such as sporting goods, and book and music stores went slightly up, clothing and accessories stores were down 9.4 percent seasonally adjusted year-over-year.

Information Provided by the US Census Bureau

Despite this Joe Flannery, President at Weaver's Department Store, said Weaver's always sees many students and there hasn't been any drop-off.  Weaver's carries designer lines like Ralph Lauren and Vineyard Vines.  Flannery said that a lot of college-age girls are continuing to come in and shop the cosmetics and fragrance buying items by brands like Clinique.

"If I'm still getting as much money as I was a year ago, and I can get more stuff with it, why wouldn't I?" Brammer said.

Girls are not the only ones out shopping more, many college age boys have been taking advantage of the recession hit clothing stores.  Crosby deMenocal, Bedford, N.Y. junior, said he has been buying a lot of clothes recently with the recent warm weather and upcoming season change to spring.  

deMenocal lives alone in an off-campus apartment and receives a monthly check from his parents.  He said his parents typically give him around $1,000 to use for rent, utility bills, and groceries.  Whatever amount is leftover that month is extra spending money that he said he usually spends most of on designer clothing like Lacoste.

"I know when I get out of school I won't be making enough to afford nice polos and stuff," deMenocal said.  "I mine as well shop now and worry about cutting back on spending later."

View Larger Map

"We already have a $1500 debt from a different credit card, so we're focused on paying the one that has interest off first," Holland said.

Holland is just one of millions of customers that take advantage of addition discounts in reward for opening a department store credit card. Some stores ask customers to open cards after asking if they would like to save a percentage off on their purchase. That's how Karie Plumb got interested in a card from The Gap.

"I was able to save 20 percent when I opened a card and I can use it at other stores besides The Gap," Plumb said.

General Electric Money Bank, or GEMB, is the bank that provides the services for Gap Incorporated's credit cards. Gap Inc. is the parent company of The Gap, Old Navy, and Banana Republic, all three of which has separate credit cards that customers can use at all three stores. With the changing economy, GEMB is just one of the many banks that are going through some tough times. According to Fitch Ratings in a New York Times article by Tara Bernard, "losses on the cards are rising at a faster pace than the broader credit card market -- reaching a three-year high of 10.51 percent in January, up 44 percent from a year ago."

Jory Taplin, manager of Old Navy, 3234 Iowa Street, says that despite the economy, the amount of applications that the Lawrence store has received for credit cards has not changed.

"It's been a steady amount. We received more at Christmas, but we always get a lot more then," Taplin said.

Although the amount of willing customers has not changed, the process in which customers obtain credit cards has. Customers are finding it harder to get credit cards approved through Old Navy and other stores because of a change in the terms of processing an application.

"It's the same criteria as getting a credit card. We go off of credit score. However, it used to be that a lower credit score could be approved, but they have raised the credit score limit for approval," Taplin said.

 

 

 

Hong Kong and Shanghai Bank Corporation, or HSBC, the bank that provides services for Best Buy's credit cards, is also having problems. According to a Deal Book article by Andrew Ross Sorkin, "there was the acknowledgment that HSBC might have lost the $1 billion it had invested with Bernard L. Madoff, the New York money manager who authorities say has confessed to running a $50 billion Ponzi scheme."

Holland knows that when the bill finally comes after the 18 months free, she is going to have to pay that amount, but she is ready for whatever happens.

"In the back of my mind, yes, I am a little afraid that I'm not going to be able to pay it off, but I'll be ready for it when it comes," Holland said.

Arielle Martin, Barnstable, Mass., sophomore, grew up amidst the gleaming lighthouses and sturdy fishing docks dotted along the coast of Cape Cod. She lived 70 miles away from Lexington, Mass., where the Sperry Top-Sider shoe was invented but didn't own a pair until coming to the University of Kansas. She said that the standard boating and water-weathered shoes weren't popular at her high school, but she noticed sorority women wearing them at the University. "They're popular because they're trendy and expensive," Martin said.

According to the official Sperry Top-Sider Web site, the "authentic original" shoe was invented in 1935 by Paul Sperry, who used a pen knife to cut siping into the outsole of a rubber sneaker. The shoes have a non-marking sole to prevent marks on boats and have traction for slick surfaces. Despite the lack of exposure to bodies of water at the University, Sperry Top-Siders remain popular among students on the KU campus.

Kaitlin LaVigne, Orchard Park, N.Y., sophomore, said spending summers at her cottage on Lake Erie exposed her to different types of boat shoes. Like Martin, she didn't purchase a pair until arriving in Lawrence. She said that the shoes are common apparel on the boats of the Great Lakes. "They fit with the East Coast ensemble of Polo shirts and Bermuda shorts," she said. "It's just what they wear."

 

Preppiness is nothing new in terms of fashion. Lisa Birnbach's "The Official Preppy Handbook" was published in 1980 and outlined "preppy" standards of education, upbringing and fashion, including must-have items like Sperry Top-Siders. "These have been in Prep closests since sailing lessons started in sixth grade," Birnbach wrote. Martin and LaVigne both admit that their parents owned a pair of the broken-in boat shoes before they did.

Both girls also bought their first pair of Sperrys at Shark's Surf Shop, 813 Massachusetts St., the only Sperry retailer in Lawrence. Owner Chris Cox said the store has carried Sperrys for five years. He said he visited a yacht store in Newport Beach, Calif., saw the demand for the shoes and decided to introduce them to the city of Lawrence. "They were popular from the day we brought them in here and are still growing," he said. Cox said he saw a steady sales increase of about 20 percent a year in the Sperry brand until they exploded in 2007 and reached 105 percent. Cox said that usually a sales increase of 10 percent is good for the business.

Local shops that cater to popular items like Sperrys greatly benefit from being in the location of a college town with trend-following students. Shark's employee Amanda Hufford said that the preppy style of bright polos and colored shorts complements Sperrys and increases their popularity. She said that the shoes are comfortable because they form to the feet, making them wearable virtually all the time. Hufford owns a pair in tan and pink. "I'm addicted to them," she said.

According to Hufford, the most popular women's shoe sold at Shark's is the Sperry Bluefish in Linen-Oat, which features tan leather and mesh and retails for $75. The most popular men's shoe is the Sperry Billfish in tan, selling for $100. While neutral colors are the best-selling currently, Hufford said pastel-colored and plaid shoes would become more popular in the upcoming spring season.

Cox's sales percentage of Sperrys decreased from 105 percent in 2007 to 71 percent in 2008. This behavior is common in consumers' purchasing patterns according to Frank Jurden, lecturer in marketing. "Fashion-driven businesses are notoriously unpredictable," he said. "The challenge for most businesses is to build sustainable growth for employees and shareholders rather than chase fads." He said that the decrease in sales at Shark's can be applied to the rise and fall of the Innovation Adoption Curve.

The Innovation Adoption curve illustrates the steady increase of popularity of a product, rising through Innovators, the Early Adopters and peaking at the Early Majority. The natural progression of this curve is to decrease with the Late Majority and Laggards. "As new fashions come in, as the 'edge' becomes mainstream, many early proponents of a trend opt out," Jurden said.

Malcolm Gladwell, author of "The Tipping Point," sees a similar theory in the 1990s popularity of Airwalk, a shoe primarily designed for skateboarding. Gladwell says that the brand had successful diffusion- how a contagious idea or innovation moves through a population- due to its ability to "take information from a highly specialized world and translate the product into a language the rest of us can understand." The key to this success is having Innovators who are the starting point for the trends interact with heavy influence upon Connectors who spread the trend farther into the mainstream.

The Airwalk brand died after a successful run into the late '90s; however, the fate of Sperrys on the KU campus is up for debate. Cox recently signed a deal with the Sperry brand to carry the entire line of men's and women's shoes at Shark's, which features more than 100 styles for each sex. Cox is optimistic about the growth of Sperry sales at Shark's Surf Shop. "Sperrys are something that will never go away," he said.

 

Sitting in the in the salon chair Megan Piersee, a Lawrence resident, glares at her dark roots in the mirror while waiting for her stylist to mix the color. "I usually don't let it get this bad, but I've been trying to save money so I've pushed my last few appointments back so I'm not coming as often. It was either that or switch salons" said Piersee.

With the current state of the economy, salons and day spas all over Lawrence have been seeing differences in their clientele. "We haven't necessarily lost any clients since the economy has weakened, but we have seen people pushing back their appointments or canceling spa treatments or nail appointments," said Scott Sueper, Stylist/Co-owner of Images Salon and Day Spa. All salons are seeing some kind of change, but it seems some are benefiting from it.

The corporate salons such as Beauty Brands and Supercuts often have cheaper prices than the individually owned salons. These types of businesses have experienced a different change during this time of economic struggle. "Since we are a corporate business we have cheaper prices, and from that we have actually seen an increase in business," said Rhiannon Tiner, Stylist/Manager of Lawrence Beauty Brands. Rhiannon said that they have seen an increase of business by almost 200 percent since new year began. "One things our new clients have been saying is they just couldn't justify paying what they did at their previous salons during this time," Tiner said.

Full service salons are not the only businesses the economy effects. Walk-in salons have seen the greatest change with an increase of business. "We have been picking up a lot of clients from full service salons and even people from the other corporate salons," said Kim Schweda, Stylist at Supercuts. Most new clients have said that the walk-in salon is more useful now than ever before. "Now that I've quit going to my usual salon, I can just wait until my hair looks like need it done and just go when it fits into my schedule. I've found that I'm going less often and spending a lot less which saves for other things my family could be needing right now," said Sandra Joy, a Lawrence resident.

Credit: Shanna Larson

The high-end salons that have reported no change are an exception. "I think one reason that we haven't seen a great deal of change is because we do have specials on certain services and we have built relationships with our clients so we work with them to give them what they are looking for," Sueper said. "I have been getting my hair done here for 3 years, and they haven't changed their prices with the economy, but they do suggest styles and colors that will take less maintenance so I am able to schedule my appointments every 10 weeks instead of every eight," Piersee said.

The economy has affected many other businesses in negative ways, but corporate hair salons have seen a change in the positive direction. "I was never really concerned about my job, because hair will continue to grow, but I didn't expect us to gain anything from the situation that's for sure," Tiner said.

Beauty Brands and other corporate businesses have always been successful in Lawrence, but during a time of economic difficulty, they have gained clients and even beat out some of their competition. "It just goes to show that the economy doesn't affect everything in a bad way," Tiner said.

 

     

      With so many ways to listen to music today, music stores around Lawrence are changing displays and lowering prices to keep business up to avoid the fate that other retailers have seen.

      Major music retailers are closing their doors permanently; Virgin Megastore in New York City's Time Square announced in a press release Tuesday that it will be having the "biggest sale in music retail history." It is not stated in the press release why it is shutting down but recent numbers have shown that hard-copy music sales are decreasing. According to the Recording Industry Association of America consumer purchases have dropped 7.9 percent since 2002. The retail price of the compact disc dropped 20.5 percent from 2006 to 2007 while retail value for full-length album downloads has risen 54 percent, according to RIAA. 

      Love Garden Sounds hasn't felt the pressure as Keif's has. Supplied with mostly used items it is able maintain healthy business. "It's bottom up in the record industry now. There are no more N*syncs selling millions. Big record labels are down, and we're doing fine because we sell used stuff," Love Garden co-owner Kelly Corcoran said.

      Loyal customers keep coming back even with less money in their pockets. Frequent Love Garden customer Noah Compo from Lenexa refuses to shop for music anywhere but independently owned stores. "The people who work in used record stores like Love Garden are actually music people themselves, and you get both a more informed staff at the store and a very positive sense of camaraderie when you shop there," Compo said.

      The laid-back atmosphere and obscure merchandise keeps him coming back, though he isn't afraid that the economy is going to hurt the stores he loves so much. "The current economic environment is making people watch their money more, which may lead them to spend eight dollars on a used CD instead of 15 on a new one," Compo said. The buy, sell and trade philosophy of used record stores keeps their customers happy by giving them extra cash for their CDs, which in turn broadens their selection for other customers. "Besides, people are loyal to independent record stores in a way that no one would ever be at a big chain store," Compo said.

TOPEKA, Kan. (Feb. 19, 2009)--Despite impassioned testimony by groups supporting its passage, the bill in the State Senate that would extend insurance coverage to more fully cover autism is on hold.

State Senator Ruth Teichman, Republican from Stafford and chair of the financial institutions and insurance committee, said that the autism insurance bill still has many questions that need to be answered. The recent state budget crisis that has emerged has others in the committee sending the bill to the Kansas Insurance Department for some questioning.

"My fellow committee members do not want to work it," Teichman says.

The bill was heard on January 29. Supporters of the bill hope to expand treatment of the disease by forcing health insurance companies, including the State Employees Health Plan, to cover diagnosis and treatment of autism. Autism is developmental disorder that impairs communication in children, among other things.

It's Friday night and Lawrence, Kansas, residents are deciding what to have for dinner,but because of the economy those residents are going out to restaurants less  and instead are buying food at their local grocery store to prepare at home.

                Lawrence grocery stores have reported an increase in sales on certain items in their stores that they say is caused by the weak economy. People trying to save money on food are turning more and more to pre-made items such as frozen dinners, pizzas and, believe it or not, spam. Many residents are also turning to cheaper store brand items to stretch their budget a bit further.

                "Convenience was the buzz word two or three years ago," said John Olsen, store director for Hy-Vee, 3504 Clinton Pkwy, Lawrence, KS 66047. Shoppers are now looking for price, as well as convenience when considering food. Olsen said that many restaurant goers are turning to grocery stores to spend less money.

                Dillons, a branch of The Kroger Co., and Hy-Vee have both seen growth in private label items since the economy started its downturn. Both companies have taken aggressive stances to keep prices as low as possible to ensure consumers keep coming back. Hy-Vee constantly searches for producers with the lowest prices, said Olsen. Kroger targets consumers with coupons based on their purchasing habits, said Sheila Lowry, a spokeswoman for Kroger.

"I used to go out to eat twice a week, but now I'm cutting back. My food budget is just too small," says Laura Riggs, Lawrence, Kansas, resident. Riggs said she had to set aside $60 per week for food to make sure all of her other bills are paid in full and on time. Riggs is one of many consumers who are making the same budget cuts.

Grocery stores have not suffered as much as other businesses have in the weakening economy. Areas such as buffet lines, salad bars and floral departments have seen significant decreases in sales as consumers cut unnecessary items out of their budget, but shoppers can make changes in their food purchasing to remove stress from their budget. Ultimately, food is a necessity.

In Sept. 2008, the Dow Jones Industrial Average saw a loss of nearly 1000 points in a one month period. Kroger stocks reflected the DJIA, dropping from $27.78 to $23.78 per share. Since the beginning of 2009, Kroger stocks prices have experienced a steady decrease. Wednesday's loss set the price at $20.97 per share, the lowest price since June 2006.

"Number one, put money in people's pockets who are in trouble now -- extended unemployment benefits, the modest tax cuts, increase in food stamps. That will help grocery stores and other businesses and keep Americans who are good, honest, hardworking people afloat," said former President Bill Clinton on CNN's Larry King Live on Tuesday.

The signing of the $787 billion stimulus package on Tuesday sets up grocery stores to see a boost in sales in the coming months. The bill gives money, tax breaks and food stamps to many underprivileged Americans. Consumers will spend that money in a number of places, including grocery stores.

Nathan Peterson never had trouble paying for rent before the recession. His job as a server at the Mexican restaurant On The Border left him with plenty of money in his bank account.

 

But over the past few months less people have been dining at On the Border. The lack of business and lack of tips have left Peterson's wallet empty and his bank account dwindling as the bills have piled up.

 

"I was just sitting here thinking oh no my bank account is empty and rent is coming up" Peterson said. "I am going to need to come up with that money."

 

Peterson, a sophomore at Johnson County Community College, gathered up some of his old belongings and sold them in an attempt to bring in money he wasn't making at work.

 

"I took an old stereo to a pawn shop, sold some old piano books, and took a few clothes to Plato's Closet," Peterson said. "I got about $40 for everything, which isn't much but it's something."

 

More young people are selling clothes to places like Plato's Closet, 3514 Clinton Parkway, resulting in higher inventory.

 

Plato's Closet is a second-hand vintage clothing store that buys gently used clothing then sells the clothing at a reduced price.

 

"We definitely have an increase in buys and inventory," said John Nichols, owner of Plato's Closet. "More and more people are coming in the store to sell clothes, generally college students."

 

The inventory in Nichols' store has been steadily increasing since the recession officially began in October.  The store now has nearly $10,000 more in inventory than four months ago, and about $18,000 more in inventory than last February, Nichols said.

 

"I feel like over winter break we had way more buys than sells," said Caitlin Handley, Plato's Closet employee. "People just need that extra money now more than ever."

 

For some young people struggling in this economy the money from selling clothes is not just something extra, but something essential.

 

Willie Christ attended KU last semester, but couldn't afford to go back for the spring semester. He works 15 hours a week delivering pizzas for Glory Days Pizza, and was told he wouldn't be receiving anymore hours.

 

"The money I make working 15 hours a weeks barely leaves me with enough to pay rent," Christ said. "A lot of people work there and they all want hours. Times are just tough now."

 

Christ usually makes between $300 and $350 a month, depending on tips. His rent is $319 and his electric bill around $40.

 

"I tried to sell some clothes to some second-hand stores," Christ said. "But they wouldn't take my stuff. I guess they are getting pretty picky now."

 

The surplus of clothes at Plato's Closet has resulted in a higher inventory of some items and a lower inventory of others, Nichols said.

 

"We can only take certain numbers of certain items," Nichols said. "If I look at the inventory and see we have too many tank tops, then we don't take anymore tank tops for a while."

 

For second-hand stores like Plato's Closet the inventory drives sales, Nichols said. With high inventory and low prices, Plato's Closet is positioned well to prosper in a recession.

 

"A store like this is recession resistant," Nichols said. "Not recession proof like food, but people who have stopped buying retail might start buying second hand."

 

Right now, however, the buys are outnumbering the sales. The inventory in Nichols' store was $53,000 in October and has grown to $62,000, while sales are at $40,000, Nichols said.

 

Brent Sams, KU graduate student, sells to Plato's Closet on a regular basis.

 

"I usually only get around $10 or $15," Sams said. "It is usually just a little extra money for me because luckily I still have a job as a teaching assistant at KU."

 

Some young people, like Peterson, are not as lucky. Peterson can no longer rely on his job to pay his bills.

 

"I generally work about 25 to 30 hours a week," Peterson said. "But my hours have been getting cut and I have been desperately trying to pick up other people's shifts."

 

Peterson's rent and electric bill amount to about $350 a month, while his income as a server often fluctuates.

 

"On busy weekends I could make as much as $100 a night," Peterson said. "But on a regular weekday evening I am averaging about $20. Making $100 is very rare, it is more likely that I make $20 or less."

 

Going out to eat is usually the first thing people can cross of their budgets when trying to save money, Peterson said.

 

"The economy has definitely affected my wallet," Peterson said. "And now I have to look for different ways to get money."

Ashley Jackson, Overland Park, junior, sits in her geology class. Some students have textbooks open on their small desks. Her textbook, or e-text, is on her laptop.

 "The book was a lot cheaper, and I didn't have to lug anything around in my backpack," she says.

The trend for electronic textbooks is rising. In a 2008 study by Collegiate Research Services, 18 percent of college students nationwide reported that they had either bought or used electronic course materials. More students majoring in business or computer sciences used electronic books than those who had alternative majors.

KU offers several major courses with electronic course materials. The Spanish department uses the program Quia, as an online workbook, and the business department uses Wiley Plus as a textbook option.

Professor Marilu Goodyear teaches public administration classes. She plans to use only electronic textbooks in her class in fall 2009. Goodyear has not used an electronic textbook before, but is excited for the opportunity.
 
 "I was pretty impressed with the system. It was kind of neat that the instructor could go in and put notes in the textbook. It has an ability to customize it," she said. "It would be cool for the students to be reading and see off to the side instructor comments and stuff instead of reading, coming to class, and then getting comments. It would be in one package."

The increasing number of electronic textbooks and course materials cause concern for many local bookstores. Jayhawk Bookstore is a privately owned store that has been in Lawrence for 32 years.
 
"Profits are disappearing. More is on the internet than before," said Janet Muggy, co-owner of the Jayhawk Bookstore. "Bookstores will be cut completely out. All negotiating will be between the wholesalers and the professors most likely. It could be the end, that's the scary part,"

 
Most online course materials that are used are priced at around 50 percent of what their textbook counterparts are. Brad Heins, general manager of the University Bookstore, warns that since electronic books cannot be returned, the initial price tag may not save as much money as you think.
 
"It is easy for a supplier to say, 'Hey we can give your students a book for $60 instead of $100,' but you have to take into account the buyback," Heins says. "Upfront cost is the total cost. A physical textbook is reused and you can get around 50 percent back. It's a better investment."

The future of the textbook does not scare Beat the Bookstore, which is owned by Dan and Denise Keating. Beat the Bookstore opened three years ago and has seen steady business. They have experienced waxing and waning profits, but base the differences on the fact that they are a new business.
 
"The move to electronic textbooks hasn't affected us tremendously so far," Denise Keating said. "If things go that way we will figure it out. You can't worry about it."
 
The Jayhawk Bookstore, University Bookstore, and the Union Bookstore all supplement book sales with other entities such as t-shirts, art supplies, and other trinkets. Muggy thinks these items are vital to the store's profits. "I really think you need all supplies," she says.

    Waving teenagers in Statue of Liberty costumes on the streets of Lawrence are not enough to attract costumers to Liberty Tax Service.  Still trying to overcome a bad reputation caused by a previous owner three years ago, Liberty Tax Service located at 810 W 23rd St. now suffers from a lack of business due to e-filing.  As of February 2009, Liberty Tax Service's sales decreased by 12 percent with only 177 income tax returns and net fees of $41,525.  However, the Liberty Tax Service located at 3010 Iowa St. has had only 97 tax returns with $23,111 in net fees.
    "Taxes are different these days.  The IRS is pushing the public to file electronically," manager Julie Thorton, Olathe, said.
    Thorton said e-filers are young adults who have simpler returns with little or no property.      
    "I have filed my taxes electronically for three years.  I feel good knowing I do not have to rely on a professional tax preparer to get my things done," said Corrie Maness, Olathe senior.
    The IRS promotes e-filing not only because it is free to American citizens but because it is easy and the returns tend to be error-free.      
    "I never thought I could prepare my own taxes until now.  It always looked difficult to me," Benjamin Henderson, Lawrence junior, said.


    According to the Internal Revenue Service, 89.8 million Americans filed their taxes electronically in 2008.  This is an increase from 76.7 million e-filers in 2007.
    Thorton said that Liberty Tax Service does not target the group that e-files, which may be its problem.  
    "We target people who need bank products, people who have trouble e-filing and people who have complicated returns.  Fees vary among the different types of returns," Thorton said.
    Advertising to it's target market is another factor to the recent decline in business of Liberty Tax Service.  

State Budget Crisis Puts Pressure on Local Non-Profit

         In response to Governor Kathleen Sebelius' proposed budget for 2010, along with the Bert Nash Homeless Outreach Program and the Lawrence Art Center, The Shelter, Inc. could face cuts in the funding it receives from the city of Lawrence in 2009. 

         The Shelter, Inc. has provided services for children and their families in Douglas County and surrounding areas since 1981. Located on 11th street, The Shelter is a non-profit organization offering a wide range of programs in addition to their emergency shelter for juveniles.

View Larger Map

         Although its name may be deceptive, The Shelter is not a drop-in center like the Salvation Army or the Lawrence Community Shelter. Judy Culley, executive director of The Shelter, said, "We take in children at risk of being in the custody of the state. The kids we work with could be picked up by law enforcement, in police protective custody, or placed privately at the shelter."  

         Other programs include a juvenile intake, pre-filing diversion, foster care, adoption services, specialized case management and high school truancy diversion programs. "The juvenile intake service is very important to the community," Culley said. "Our staff is on call 24-hours a day to law enforcement officers to help them with crisis intervention for families." 

Mid-Level Hotels Lose to Recession, Less-Expensive Hotels Benefit

By Kamaria Cartledge 

            Janice Stevens, Ulysses, Kan., can't believe the recent deal she and her family got 

at a Lawrence hotel.

            "Me and my family stayed at the Econo Lodge and breakfast and dinner was all taken care of along with a clean, comfortable room," Stevens said. "Usually we stay at the Holiday Inn when we come to visit our daughter at KU, but since the recession, we just don't have the extra cash."

            The current recession has caused Stevens and other Americans to travel less. As fewer people travel, mid-level and luxury hotels suffer. For those who do travel, less- expensive hotels benefit from more business.

            The Holiday Inn, a franchise hotel under InterContinental Hotels Group, fell 22.2
 percent from 2008 to 2009 in annual corporate earnings, according to InterContinental Hotels Group Annual Review. The Holiday Inn is the largest hotel in Lawrence with 192 rooms. David Owens, general manager, said only 50 percent of the rooms are occupied on the weekdays.

            "Right now we're on a hiring freeze and had a few lay-offs" Owens said. "We've
 combined job positions to reduce labor expenses."

            On the other hand, the Econo Lodge, a franchise hotel under Choice Hotels
 International, benefits from the recession. The Econo Lodge increased 3.2 percent in annual corporate earnings from 2008 to 2009, according to Choice Hotels International Annual

Lawrence, KS: The Econo Lodge receives more 

business during the recession. Annual sales increased 3.2 percent.

 

Review. Joel Schossow, assistant general manager, said the recession brought in more  business.

            "Business is great, so we are able to provide our guests with more amenities without
 raising our prices," Schossow said. "We' ve always had continental breakfast, but beginning in October 2008, our guests also receive dinner."

           The Econo Lodge contains 110 rooms with nightly rates from $59.95 to $79.95. The Holiday Inn charges nightly rates from $91 to $129.95 

              "Before the recession, business was very slow," Cannon said. "But since the end of
 November 2008, almost half of our rooms are occupied on the weekends."

            Motel 6 on North Third St. contains 50 rooms with nightly rates from $45.99 standard 
Lawrence, KS: Motel 6 receives more business because of 

the recession.

rate to $65. Evan Engle, front-desk clerk said the recession reduced dead periods.

            "Most of our customers are either business travelers or construction workers," Engle
 said. "Since mid-December, more construction workers stay here for longer periods."

            While less-expensive hotels and motels benefit from the recession, mid-level hotels
 and luxury hotels make changes to increase business.

            SpringHill Suites Marriott on One Riverfront Plaza contains 105 rooms with nightly rates from $104 to $135. Audrianna Kozlowski, front-desk associate, said the new Customer Relationship Management system increases business. This system has been active since June 2001in other Marriotts throughout the nation, but the Lawrence Marriott just started using the system in December 2008. The CRM system allows the Marriott to send guests e-mails on their birthdays.

            "Guests call-in and ask if we'll lower our prices or give them a discount," Kozlowski
 said. "We don't lower our prices, but the CRM system gives us a chance to form close relationships with our guests."  

            SpringHill Suites Marriott also provides guests with discount rates for government workers,such as teachers and military officials.  

Lawrence, KS: Luxury hotels lose business during the recession.         

              While mid-level hotels make changes to increase business, luxury hotels also make
 adjustments. The Eldridge on Massachusetts St. contains 56 rooms with nightly charges from $145 to $289 per person. Ryan Kehr, guest services manager at The Eldridge hotel said more business meetings have had to cancel since October 2008.

            "Most of our guests are on business travel, and when they cancel, our hotel is slower
 on the weekdays," Kehr said.

           "I really enjoy my stay at The Eldridge, but it is very expensive," Joe Harvey,
 hotel guest and financial advisor, Parkville, Mo., said. "But if I was traveling with my family right now, I definitely wouldn't be staying here."

 

 

            "Pets are welcome!  Stuck-up, snobby, better than thou people are not!" reads the sign on the front door of Beyond the Door, one of the many vintage consignment shops in Lawrence.

            Beyond the Door, 918 Massachusetts St., is in its second year of business in Lawrence after Sherry Fitzgerald, owner, decided to move from Florida in 2007 to Lawrence with her son, who, Fitzgerald said, knew she would not have a lack of business, but rather a boost.

            "Business has definitely picked up in the past year," Fitzgerald said.  "People have gotten to know me and the store and are always bringing in their friends."

            Since moving her business, sales have skyrocketed, which she attributes to the high demand of resale clothing in Lawrence.  Her busiest days are Friday, Saturday and Sunday, when her average sales total $850, as opposed to an average of a mere $150 on most weekdays.

            According to the National Association of Resale and Thrift Shops, 74 percent of the 182 participating thrift shops reported an increase in sales and 79 percent reported an increase in the last year of new consigners, sellers and donors as of October 2008. The resale industry has become a multi-billion dollar a year industry.

            "While many people focus on the upscale side of resale," says Adele Meyer, Executive Director of NARTS, "there is a demand for items in all price ranges. Just as consumers want and patronize a variety of retail outlets from Neiman Marcus to Wal-Mart, resale shops of all types are needed."

            According to the NARTS website, the resale industry has grown by approximately 5 percent every year in the last three years because of the growing popularity of resale items and because of increased awareness of recycling of all forms.

            Now stores like Beyond the Door are doing more to improve business at the start of 2009, as more competitors in second-hand retail shops are popping out of the woodwork to compete in the recent down-spiraling economy.

            Most of the consigners for Beyond the Door sell apparel, like local designers Girls With Guns, Ecoboutiquo and Uptown Monkey.

            "When I moved to Lawrence in August, my friend Lacy brought me here," said Anna Waskowski, 19, who is a regular customer at Beyond the Door.  "They have a lot of really well-priced vintage things that other stores like Arizona Trading Company and Wild Man Vintage don't have."

            Fitzgerald also welcomes bands and musicians to play in her store at anytime.  She doesn't pay them, but they still want to play there as a way to broaden their fan base and because of the atmosphere of Fitzgerald's store. "I just had the Boxcar Bandits [a bluegrass band from Texas] contact me to come in to play on February 20^th," Fitzgerald said.

            Because the demand for second hand retail has gone up in the last year, retailers have had to make changes to their stores and the way they do business, like bringing in bands to play, to make them stand out among their competition.

According to America's Research Group, a consumer research firm, about 16 to 18 percent of Americans will shop at a thrift store in a year and about 12 to 15 percent will shop in consignment shops. At the same time, only 11 percent shop in factory outlet malls, 19 percent in apparel stores and 21 percent in department stores.

            "Since we've opened, we've been very successful," said Phil Chiles, owner of Wild Man Vintage, 939 Massachusetts St.  "We don't have to advertise much here; word of mouth is what get us most of our business, but we're hoping this new addition will bring in even more customers."

            Not long ago, Chiles decided to open up the back of his shop to sell more second-hand and vintage items--but not clothing.  Instead, he will sell more items such as posters and home décor.

            Wild Man Vintage has been selling vintage clothing, jewelry and shoes since 2005.  Chiles began his business after the previous tenant, another vintage shop, Sugar Town Traders, went out of business.

            "I like the idea of people not throwing their stuff away," said Lacy Meyers, 18, who began working at Wild Man Vintage in September 2008. "We have some really exceptional second hand pieces here and the prices are really good."

            Like Beyond the Door, Wild Man Vintage gets a substantial amount of its inventory through consigners such as local designers Kitty Reese and Hot T.  The consigners get 70 percent of the selling price, and the store keeps the remaining 30 percent as profit. 

            Another way Chiles brings in inventory is through buying and selling.  People can bring in their discarded clothing to sell to the store for 60 percent store credit or 40 percent cash.

            On average, a t-shirt at a higher-end trade shop like Arizona Trading Company, 736 Massachusetts St., can cost anywhere from $5 to $20 and jeans can cost over $100 depending on its label.  This is more than most of the vintage consignment stores in Lawrence. 

            For example, all clothing--from dresses to jeans--at Beyond the Door that isn't on consignment, ranges from $4 to $10 and clothing at Wild Man Vintage can cost anywhere from $5 to $15.

            There are, however, other stores in Lawrence who sell on consignment that are not second-hand or vintage shops.  MissFortune's Creation Station, 726 Massachusetts St., contains items that are priced anywhere from $.50 to $400.  It, however, is also making some changes for 2009 that Jennifer Fortune, owner, hopes will draw in more customers.

            They are currently expanding the higher-end jewelry, adding lotions and other body care products, revamping the incense area and having our employees make some of the jewelry.

            "The clothes and jewelry at the stores in Lawrence are unique and you know that by shopping there you won't have something that everyone else has," said Kirin Arnold, 19, student at the University of Kansas.  "And it's a better deal to shop locally and support the community."

-30-

There's nothing like a night at the movies.

The parking lot is packed. Couples walk arm in arm toward the double doors, hurrying to get out of the cold.  A little girl hops alongside her father, tugging his sleeve toward the line of people inside.  Upon entering the building, the smell of popcorn and the loud hum of conversation overwhelm the senses.

It's a busy evening for Southwind Hollywood Theater in Lawrence, Kan., and busy evenings can no longer be taken for granted. Jon Ratzlaff, general manager of the theater, is sensitive to the atmosphere at Southwind.




"Right now, it's fabulous, definitely. November and December, however, were pretty low. I think we can blame that more on poor product than the economy, " he said. "We didn't exactly have Harry Potter playing during those months."

Poor product may take the blame in this case, but theaters nationwide are struggling to keep attendance steady.  According to box-office website "Media by Numbers," last year had the lowest attendance since 1995.  The number of tickets sold dropped from 1.4 billion in 2007 to 1.2 billion in 2008.

Mary-Nell Gleeson, a Lawrence native, said the drop in attendance was unsurprising.  She said that "evenings out " were getting too expensive.

"It's no longer cheap entertainment," she said. "People can't afford to spend eight or nine bucks for one evening."

Greg Weseloh, Liberty, Mo. junior at the University of Kansas, disagreed. He said that going to the movies was actually a cheap activity compared to going to sports' arenas or concerts. He also said the experience was too unique to die off.

"That's something you can't replicate. When you have the big screen like that and surround sound, you just can't beat it."

Movie attendance reached its peak in 2002 when epic movies like "Spiderman," "The Lord of the Rings: The Two Towers," and "Star Wars: The Clone Wars" hit the big screen to combine for a gross total over $1 billion.  Since then, attendance has declined.


One factor has always kept the industry's earnings growing, however.  In the last decade, ticket prices have increased at an average rate of 25.1 cents per year.  Despite the decreasing attendance, movie theaters still made a profit. In 2007, ticket prices went up by 33 cents, and the total box-office gross grew 4.09 percent. The increase helped to make up for lost attendance.



This trend remained steady until 2008, when the total box-office gross went down by .22 percent.  This isn't the first dip to occur in recent history. In 2005, the gross decreased by 5.19 percent--a more significant drop. In the two years that followed, however, the total box-office gross increased by 3.7 percent and 4.09 percent.  The dip of 2005 became a mere fluke due to, as Jon Ratzlaff said, poor product. 

 With the economic recession looming in the foreground, however, the dip of 2008 is being taken more seriously. Mike Van Horn works for AMC Theater as manager of theater systems support. Headquartered in Kansas City, Mo., AMC owns 353 movie theaters in the United States and Canada.

Van Horn said that raising ticket prices was still the most viable option for making money in the movie industry.  Whether the revenue decreases or not, ticket prices are raised habitually once--sometimes twice--a year.


"You will never see the prices go down.  It's just the market we're in and we have to keep up with it," he said.

Van Horn said the next two years will show the true effects of the economic recession, and that AMC is large enough to absorb the losses. While shutting down theaters would be unfortunate, Van Horn said this would be an opportunity to update the other theaters with better technology.

"It is, ultimately, worth the money to get out of one or two-screen markets and go to larger concepts, like stadium seating and 3D entertainment," he said. "It's that kind of stuff that will separate movie theaters from home entertainment."

Chris Armstrong, owner of Travel Leaders, said business has been steady, despite the boom of Internet booking.
Photo by Aly Van Dyke

by Aly Van Dyke

The wait at the Texas customs' gate had stretched into an hour. The muted grumblings had escalated into impatient shouts, and a swarm of people gathered around the security guards.

But Trisha and Tim Betts, of Tecumseh, stayed put. And they didn't so much as break a sweat.

Their travel agent booked their flights, and he had left them plenty of time to catch their Kansas City, Mo., connection.

"I remember thinking, 'I'm so glad I called Travellers,'" Trisha said. "People complain that travel agents cost too much, but that made it all worth the little extra money. It's relaxing just to know it's taken care of."

The Betts have used Travellers Inc., 831 Mass. St., for 17 years. Although Trisha considers herself somewhat "old-fashioned" because she never uses Web sites like Travelocity or Expedia, she said she's never regretted her loyalty to her travel agent.

But the Betts aren't alone in their of use travel agents over booking online.

According to a recent study, more travelers are returning to traditional travel agents, and the Internet's complexity may be the cause.

Transition in Flux

A study compiled by Ypartnership, a travel-market research company, showed that more people are abandoning the click-and-order method of travel for the traditional, brick-and-mortar travel agent.

While the online-booking sector of U.S. travel experienced a decrease in percentage points in 2008 from 2007, the use of travel agents saw an increase in percentage points.

The percentage of people who booked leisure trips through travel agents last year increased 4 percentage points from 2007, according to Ypartnership's 2008 National Leisure Travel Moniter.

The study also showed that the number of people who booked a flight or hotel reservation through a traditional travel agent - a travel segment typically booked online - increased 6 percentage points last year.

Simultaneously, online travel agencies have lost traffic and business, according to travel-industry research.
 

• ComScore Inc., a market research company for online industries, reported last year that traffic to Orbitz, Expedia and Travelocity was down 23 percent, 25 percent and 16 percent respectively.
• The Ypartnership study showed a decrease of 1 percentage point in leisure trips booked online and a 3-percentage-point decrease in the number of flights booked online.
• PhoCusWright, an online-travel research company, reported the first single-digit growth in online travel last year since it began tracking online travel trends in 1998.

Arrival to Today

Travel agents and research groups point to the complexity and limitations of booking online as the cause for this change.

"The Internet's not for everyone," said Chris Armstrong, owner of Travel Leaders, 4104 W 6th St. "When you book online, you have no idea whether it's going to be a dream or a disaster. We take the scary part out of that."

However, Melissa Teates, director of research at the American Society of Travel Agents said the return to travel agents is also a result of the economy.

"In an economy where you want to stretch your dollars as far as they'll go, travel agents can help you get the best deal for your money," she said.

Gregory Dunn, Ypartnership executive vice president, attributed the consumer trend away from online booking toward traditional travel agents to three other factors: lack of time, desire for complex trips, and increase in cruise sales - travel still largely booked through traditional travel agents.

Departure from Tradition

Despite the reported increase in the use of travel agents, some agencies may be jumping ship to become travel advisers who charge by the hour.

Before 2002, travel agents received commission for booking flights through specific airlines. In those days, flights represented close to 60 percent of a travel agent's business, according to ASTA statistics.

Enter online booking near the turn of the 21st century.

In 2002, four major airlines cut commissions to reduce prices online, thereby eliminating the middleman.

By 2008, flights were 23.6 percent of a travel agent's business, according to ASTA data. The number of agents had dropped 31 percent.

John Novotny, vice president of Travellers Inc., said watching customers leave his office to book online has been one of the most frustrating parts of his job.

"Why wouldn't you pay $28 for service from a local business that pays taxes here when the overall cost of the trip is $1,500?" Novotny said. "It just amazes me."

Today, agents sell 85 percent of cruises, which still provide agents commission. But that ship may be sailing as well, leading some agents to abandon commissions altogether and become travel advisers.

Novotny said that he empathizes with agents who abandon a commission-based travel business, but that Travellers Inc. wouldn't be changing its model anytime soon.

"Everything is done via the Web site of suppliers, but some still prefer to do business person-to-person," Novotny said. "We're a business that's going to stay that way for those people."

I tried to do this the way the instructions told me to, but I couldn't figure it out. I hope this still works. It did when Terry helped me in the media room...