In crisis, there is opportunity.
The economy tightened, disposable income shrank, discretionary spending decreased, but the news wasn’t all bad for business.
People who spent less still spent, just in other places; and those that wanted big ticket items had to wait, but they still wanted them.
Up and down Route 5 in South Windsor and East Windsor, companies relying on the discretionary dollar survived by picking up customers fleeing expensive undertakings, or they simply waited until their old customers came back.
“We thought this would be a recovery year, but it is really beyond our wildest expectations,” said Mark VanOstrand, owner of Van’s RV Center in South Windsor.
Last year was the absolute worst year for sales in Van’s 44-year history, but those customers have come back in droves this year with sales triple the first half of 2009, VanOstrand said. Customers held off spending $15,000-$30,000 for a towed recreational vehicle last year in the tumultuous job market, but as employment has stabilized, people are buying.
“At least at this point, if you haven’t lost your job, you’re not going to lose your job,” VanOstrand said. “Now, they are comfortable making that purchase.”
Disposable income has risen from 2009, although the levels are still below 2007, said Demetrios Giannaros, business professor at the University of Hartford. Many Connecticut residents lost their jobs and all their disposable income; others took pay cuts, missed raises or had to spend more on necessities.
Consumers are more cautious now than in the previous five years, Giannaros said. Even if they have the same level of disposable income, spending on vacations, restaurants and entertainment is down.
The desire to stay closer to home paid off for Splash Pool Supply in South Windsor. Instead of going on vacation, customers fixed up their backyards and invested in their pools, said Paul Healy, Splash owner.
While pool contractors are sucking wind, Splash excelled because the company works on completed projects such as filter repair and motor repair. New sales of cheaper above-ground pools are climbing, too, Healy said.
“People are being frugal and smart,” Healy said. “Instead of buying the whole new filter, they fix it, and that is a main part of what we do.”
The hot start to summer didn’t hurt either, compared to last summer’s cool and rainy June.
“When it is hot, people swim; and when they swim, we make money,” Healy said. “When the economy is good, things are even better.”
Staycation was the word at Nomads Adventure Quest in South Windsor. Since opening in May 2006, the lazer tag/bumper cars/boxing/wrestling/arcade business has expanded more into its 65,000-square-foot facility on the strength of area families skipping the Bahamas in favor of a day of activities at Nomads.
“We’ve been doing very well given everything that’s going on,” said Eddie Skowronek, Nomads manager. “It is nice to see a lot of families come in and have some fun.”
The latest Nomads expansion adds an adult entertainment section to the complex. When complete, the venue will sport a bar, a stage for performances and a banquet room.
“There’s nothing quite like Nomads in the area,” Skowronek said. “There are a lot of fun houses and arcades, but nothing has everything we have.”
While all these opportunities are helping companies survive in the crisis, many businesses are still in crisis.
Mark Passeri, president of A&S Boats in South Windsor, thought 2009 would be the bottom out year, but 2010 sales are lagging significantly behind last year.
“Ours is an industry built on disposable income, and there just isn’t any,” Passeri said. “We have to have people who understand the value of the family time they get out on a boat.”
Even though other businesses are showing some signs of a recovery, the gains are generally small improvements from a bad year in 2009. This feels more like the natural ebb and flow of the economy rather than the robust recovery necessary to drive up boat sales, Passeri said.
“Lost sales cannot be regained,” Passeri said. “Once those sales are gone in May, they’re gone. Even if they come up the next month, we can’t go back.”
At Van’s RV Center, where sales of tow RVs have returned to the glory days, the sales of high-end motorized RVs — starting at $75,000 — remain mired in the recession.
The motorized RV sales are better than 2009, VanOstrand said, but they are a much more expensive commitment. Consumer confidence must greatly increase before sales return to the records made from 2002-2007, he said.
Van’s workforce is still down 40 percent from 2007, with only 15 employees remaining.
“Eventually, the motorized sales will follow, but it may take a year or two,” VanOstrand said.
The sales New England Silica, Inc. in South Windsor normally associates with new home purchases have dropped over the past two years, as more people are digging in, owner Bob Bellody said.
But the hardscape provider’s overall sales remain nearly the same because as investment in new homes dropped, investment in existing homes rose. Customers are adding pools, landscaping and outdoor kitchens to their homes — perhaps making the houses more marketable — increasing the need for New England Silica’s concrete, masonry and industrial sand products.
New England Silica can weather any economic storm, Bellody said. Brand recognition, competitive pricing and quality products keep customers coming through the door.
“There is always going to be a certain amount of business out there. You just have to work harder to get it,” Bellody said.
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