Small Business

‘It’s a slow economy’: Small businesses struggle amid Harvey recovery, oil slowdown | News

For the past 12 years, Pat McDonald has been running a boutique in a quiet neighborhood in old Victoria, nestled amid late 19th-century Victorian homes just blocks from downtown.

The store smells sweet like the candles and locally crafted skin care lines she sells, along with clothing, jewelry, textiles and other trinkets. Over the past decade, McDonald, who runs the store with her husband, has built a following. Her customers love the store for its small-town charm and welcoming atmosphere, where they are often greeted with samples of Girl Scout cookies or chocolates, depending on the season.

But during the past year and a half, the number of customers coming through her glass doors has gotten smaller and smaller.

“We used to open the door, and we would have customers waiting to come in,” McDonald said. “And now, they’re just dribbling in.”

Without customers perusing the store and scouring shelves, McDonald has had a lot of time to think about the decrease. And she has her own guess about why: For many of her customers, they just don’t have as much discretionary cash as they used to. It seems as if a lot of them are still fighting with insurance companies or replacing things damaged by Hurricane Harvey. And some were already cutting back spending because of the oil downturn in the years prior.

But when customers aren’t spending, small businesses struggle. And when small businesses shutter, their communities hurt. Community development experts say mom-and-pop shops offer stability to neighborhoods, linking their residents with necessary goods, services and steady jobs. Yet the number of businesses in Victoria today is slightly less than it was in 2000, despite a population jump of 10 percent, according to state data and census estimates.

Economists say Victoria’s stunted economy could be caused by a number of factors, ranging from the recent oil downturn to nonexistent growth in homeownership, which gives residents access to equity that can be used to start businesses. Plus, Victoria’s elderly population is growing; the percentage of people 60 and older grew from about 18 percent to 21 percent from 2009 to 2017, according to census estimates.

“If there are retirees moving there and they’re living on a fixed income, then they’re going to have a very different spending profile, especially in a world with rising medical costs,” explained Jesse Thompson, a senior business economist for the Federal Reserve Bank of Dallas, Houston Branch.

And Victoria’s business owners are seeing the ramifications on the ground. McDonald, for example, explained that last Christmas, business at her store was about a third of what it once was in previous years.

“People who (in previous years) came in and bought maybe seven bracelets for the whole family maybe just bought two – one for the mom and one for the daughter,” McDonald said.

That means McDonald is less likely to hire extra hands. In previous years, she and her husband would hire three to four employees to help around the shop, but now they just have one, who works part time. Her guess is that it won’t pick up again until next Christmas.

“It’s a slow economy,” Will McDonald said. “We can make a lot of excuses about all that, or we can say, let’s get down to the business of serving our customers that do come.”

Marina reports on local government for the Victoria Advocate. She may be reached at or 361-580-6511.


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