During the recession, businesses in Oakland’s Chinatown have struggled
on January 13, 2012
In Oakland’s Chinatown, Tsu-Wei Weng and his wife Yvonne invested their savings and dreams of prosperity in a frozen yogurt shop whose survival, like many small businesses, is threatened by the recession.
The nearly 400 square foot yogurt store, Tutti Frutti Frozen Yogurt, stands at the corner of 9th Street and Webster Street, the oldest business street in Oakland Chinatown. The long, narrow thoroughfare is crowded with open-air markets, grocery stores, bakeries and restaurants.
The 130-year-old community, home to almost 12,000 people in its one-half-mile radius, draws many Chinese and other Asians looking to realize their American dream. Some of them have made their fortunes and some have not.
Mr. and Mrs. Weng are newcomers to Oakland’s Chinatown. They wanted to make their store the first yogurt store in the district. “There have been too many Chinese restaurants selling traditional Chinese food like Guangdong noodles, Hong Kong milk teas or other Asian cusines,” said Mr. Weng. “I wished my new store could be different from the old ones.”
Opened in September, 2010, the shop looks clean and cozy. Its menu is colorful. Green apples and red strawberries are painted on the wall to excite customers’ appetite. Health advice printed on the wall suggests yogurt is a good dietary choice.
Mr.Weng invested $200,000 in savings amassed over 10 years in the shop’s franchise fees, equipment and decor. He and his wife hired three part-time workers. Sometimes,when Mrs.Weng serves yogurt and tends the cash register, she has to leave her 5-month-old daughter sleeping behind a curtain in the back of the store.
The store’s first–month sales in September 2010 were satisfctory. However, the foot traffic declined as time passed. After one year, sales have also declined and as of this fall, the yogurt store had not yet made a profit.
“Compared with last September, our business went down about 50 percent. This year, the average revenue is about $5,000 for September,” Mr. Weng said in late 2011. “This amount can barely cover the rent, the cost of three part-time workers and the cost of food.” He said will have to pay his utilities, insurance, and labor costs out of pocket.
On a Saturday afternoon — the prime time of the week for buying treats — a reporter observed that only 3 children dropped in. They drank milk tea, made in the Taiwan style of Mr.Weng’s home. Their total order amounted to about $10.
The store’s window seats, with street views, were empty. Mr. Weng had nothing to do but sit beside the window, looking outside, as his wife cleaned the store again and again.
Mr.Weng graduated from UC Berkeley in 2000 with a BA degree in computer science. His job with a software company supports his family. But his wife, a graduate of California State University, East Bay, with a BA degree in accounting, couldn’t find a job. The yogurt shop was supposed to be her first career.
But Oakland’s Chinatown has been hit hard by the recession. Fewer and fewer customers shop there, and job opportunities have been hurt. Food-related industries have suffered greatly, especially the small markets and restaurants. Demographic factors deepen the pain due to the concentration of seniors and low-income housing units nearby. From talking with neighborhood businesses, Mr. Weng guesses that business at Oakland Chinatown’s restaurants has dropped 30 to 40 percent.
Nearby, a popular banquet spot for over 40 years has been closed for months. Many of the local grocery stores have begun to close their doors.
“Food-related industries have suffered greatly, especially the small markets and restaurants,” said Jennie Ong, Chief Executive Officer of Oakland Chinatown Chamber of Commerce (OCCC).
Ong has worked with OCCC for 15 years. Her eyes shine when she recalls how prosperous Chinatown used to be. “You know, Oakland Chinatown’s sales volume had been over $10 million in 2006,” the highest performing retail node in the city of Oakland, she said.
Oakland and Alameda County took a more severe hit from the recession, though, than did neighboring San Francisco. In the fourth quarter of 2008, Alameda County taxable sales declined 14.1 percent from the year earlier period, compared to an 8.5 percent decline in San Francisco County, according to the website of the California State Board of Equalization.
Against this backdrop of economic pain, the choice to open a dessert or snack shop treat may have been risky,in view of local people’s lighter pocketbooks. A yogurt shop may make money in other places, Ong said, “but in Oakland Chinatown, it may not. How many people would spent more money on yogurt other than their normal meals? Recession must be one of the main reasons.”
To cope with consumers’ tight budgets, the Wengs decided to cut their expenses, too. First they cut their hours of operation from the old 10-hour business day, which ran from 10 am to 8 pm, to a shorter 6-hour business day, running from 12 noon to 6 pm. They also offered cheaper basic food and drink items, like soy milk and teas, for $1 a cup compared to $2 or $3 for a bowl of yogurt.
The Wengs aren’t alone in suffering from the recession.“My wealth went down,” said John Loh, president of Loh Realty & Investments, manager of Renaissance Plaza, which has been the center of Chinatown’s culture and business for 19 years. Loh said he has weathered three recessions in his lifetime.
Some of Loh’s apartments and shops for lease, have stood empty for months, he said. “But we Chinese have to live through hardship by ourselves. We have no one to count on,” he said.
Weng has visited the Oakland City Council twice seeking help to attract more business to Chinatown, but said nobody seemed be interested in his proposal, adding, “My voice is too weak.”
In the meantime, he has decided to sub-lease his shop in the morning hour to other people for Chinese or other style breakfast and lunch. “I hope this will work so I can survive longer,” he said.
Text and photos by Min Zhou.
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