Results from The Gourmet Retailer's State of Retail Business Survey are in -- and overall, they reflect the American specialty retailer's ability to hold steady and even triumph in the face of difficult economic times.

Eighty-two retailers responded to our online survey. The breakdown of store type among respondents was as follows:

*Cookware shops, gift gourmet, cooking schools and gift basket shops: 55 percent
*Specialty food, delicatessens, cheese shops, confection shops and wine shops: 24 percent
*Supermarket grocery and natural food markets: 11 percent
*Coffee and tea shops: 4 percent
*Department store, mail order, and mass merchandiser-housewares and specialty food: 4 percent
*Other: 2 percent

Third-Quarter Sales Surprise
When asked how their third-quarter sales (July, August, September) for 2008 compared with those for 2007, 35 percent said they were above last year; 23 percent said they were the same as last year; and less than half (42 percent) said they were below those of the previous year.

2008 Holiday Push
Conducted just prior to the holidays, our survey also asked retailers to predict whether their 2008 fourth-quarter (October, November, December) sales would be stronger, the same or weaker than those in 2007. Twenty-six percent of respondents felt their sales would end above those of last year, while 16 percent said sales would remain the same. Fifty-eight percent predicted that sales in the 2008 fourth quarter would be down from the previous year.

Survey respondents indicated that they employed a variety of marketing and merchandising tactics to bolster holiday sales during the fourth quarter, such as offering discounts and coupons on traditional holiday items (which 70 percent of respondents said they did). Nearly 67 percent of respondents increased their local marketing efforts in the form of direct mail, radio ads and cable television promos. While 63 percent of respondents beefed up their in-store events focused on cooking, decorating and entertaining, more than half of respondents (56 percent) added new products and merchandise to their mix.

Retailers Take Action
Current economic conditions have affected retailers nearly across the board with fewer shoppers in the stores, fewer sales overall and a drop in big-ticket purchases. Respondents to our survey indicated that this has been their experience, with 71 percent citing overall reduced sales, and 69 percent, a lower number of shoppers.

But the retailers who responded to our survey also noted that they were focusing more on providing each customer with better service, contacting their customer base more (through e-mail blasts) and, in some cases, working collaboratively with other local merchants to improve traffic in stores throughout town.

Supply and Demand
We asked survey participants: "What can suppliers do to help improve your store sales of their products?" Not surprisingly, the two most popular answers were: "Provide lower pricing" and "Provide specials," such as buy-one-get-one, with 75 percent of respondents naming both of these options. Fifty-four percent of respondents indicated that providing in-store merchandising/marketing ideas for specific products would be helpful, while 29 percent would appreciate any efforts with regard to increasing consumer demand for products (getting the product featured in cooking and home magazines, cable shows, etc.).

Other responses mentioned a desire for suppliers to improve packaging and display; visit the store for demos; provide demo allowances; and offer free shipping to retailers.

Sales Growth
Even in a tough economy, there are sales gains to be had. Respondents to our survey said that most of their sales gains in the last six to 12 months have occurred in-store (65 percent), while 19 percent said online sales were growing. Just 2 percent of respondents have seen the most growth in catalog/phone sales.