Oct 14, 2008 7:47 pm US/Eastern
Down Economy Hitting NY's Northern Suburbs Hard
YONKERS, N.Y. (CBS) ―
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The economic crisis is causing more than 70 percent of resident in northern suburbs to penny pinch.
CBS
As money worries wash through our economy, consumers are cutting back. A recent survey shows more than 70 percent of residents in New York's northern suburbs are spending less on new clothing and restaurant meals.
On Yonkers' Main Street, the long line of idle taxis tells you all you need to know about the local economy.
"People don't take taxis the way it used to be," cabbie Jean-Paul Thomas told CBS 2.
Cab drivers like Thomas say people are walking more and merchants say they're spending less.
"They're downsizing in quality," said Dave Sarran of Rivertown Liquors. "Instead of Chivas Regal, they might be buying Dewar's Whie Label. Instead of a $10 bottle of wine, they're buying a $5 bottle of wine. They're very price-conscious."
Sarran says he has seen ups and downs in his 35 years in the business, but never like this.
It is a business such as Rivertown Liquors that really helps drive home the point: the credit crunch that is locking up Wall Street is causing real pain for merchants on Main Street.
Sarran gets all his inventory on credit from suppliers, who got credit from their banks. Now the banks are squeezing the suppliers and the suppliers are squeezing Sarran.
"If you're late in payment once – just a couple of days – and you're cut off," he says.
Steve Sansone, who directs the Local Business Improvement District, says merchants are flooding his office looking for help.
"They're asking for marketing help, creative solutions, funding, if it's available," he says.
Sansone believes inexpensive stores and pubs that dish up comfort food may actually do OK during tough times.
"I think people are going to start to shop locally, eat locally," he says.
But Sarran is skeptical.
"Seeing is believing, we have to see it to believe it," he says.
He's not sure he'll have much reason to raise a glass anytime soon, but there were signs Tuesday that the credit crunch is easing a bit. A key lending rate known as "Libor" continued to inch lower. That's good news for consumers: many mortgages and consumer loans are tied to the "Libor" rate.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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