Rethinking the Path: Tucson small businesses adapt to new realities | News

Inside Midtown Mercantile Merchants, a multi-dealer retail marketplace that’s kind of a modern take on the antique mall model, more than 100 small businesses operate side by side.

Located in a shopping center that is itself a bit of an antique, having housed Tucson’s first El Rancho grocery store in 1958, you’ll still see plenty of spaces run by the usual demographic: women 55 and over offering antiques, collectibles and handmade goods.

But there’s also vintage clothing racks curated by women in their mid-twenties, hoisting the cellphones to promo their wares on Instagram, and booths run by young men moving their e-commerce T-shirt biz from Depop to brick-and-mortar — or at least a few square feet of a retail store.

“The demographic change has been huge,” says Tamara Mitchell, who first opened the store in a smaller location on East Speedway in April 2016. “Our biggest group of sellers are now young women age 20 to 35, and the next demographic is young men in the same age group.”

That shift is being driven in part by the rise of online resale platforms and side hustle culture, which have created a new pipeline of young sellers. Many start by selling clothing and vintage goods through apps like Depop before moving into physical booth space.

At the same time, Mitchell said, the model offers a lower-risk alternative to opening a stand-alone store — an increasingly important factor for younger entrepreneurs navigating rising costs.

“They’re not paying the overhead,” she explained. “They don’t have to deal with employees or taxes.”

It might seem that more than a few of them are testing the waters in Mitchell’s retail marketplace, using booth space as a way to test and grow their businesses before taking on the full cost of a stand-alone shop.

But for most, that next step is no longer the goal.

“I’ve only had two do that,” Mitchell said. “And they were not successful. I’ve actually had more merchants come from running their own stores, and they tell me they’re happy they don’t have to do it on their own anymore.”

For decades, opening a stand-alone shop was the benchmark of small business success. In Tucson today, that path is looking less certain.

Instead, a growing number of entrepreneurs — particularly younger sellers — are opting for models that reduce risk. Others who do go it alone say survival depends on something less flashy: staying lean, staying disciplined and adapting constantly.

Autumn Ruhe, owner of the Tucson toy store Mildred & Dildred, said her business was shaped as much by timing as strategy. Opening in 2007, just before the recession, forced an approach that has stuck ever since.

“We never got a chance to develop expensive habits,” she said. “In a way, we felt like the people who grew up in the Great Depression — really counting our pennies and just reusing things and staying really frugal. I think the store coming of age in that time has helped in terms of just keeping it really simple, keeping it really tight in terms of spending.”

That early constraint became an advantage. Without a large initial investment or an elaborate buildout, the store was able to weather downturns that have closed many bigger retailers, particularly in the toy business.

“I think partly I just didn’t know what I was doing,” said Ruhe, with a laugh. “And I think that actually worked in our favor.” Nearly two decades in, Ruhe still describes the business in the same terms.

“I always see us as kind of scrappy and just kind of doing what we need to do,” she said.

Independent operators today face a very different environment than they did even a decade ago. Amazon competes with every small business, and even the big-box retailers are following its model, boosting online ordering and delivery.

Restaurants and bars are among the few businesses that still draw people out of the house. But even that advantage is narrowing as customer behavior shifts, particularly among younger consumers.

“Gen Z is coming of age. The trend is less drinking, staying at home more,” said Scott Safford, co-owner of Tap & Bottle.

For a business built around social gathering, that shift presents a fundamental challenge. Founded in 2013 by Safford and his wife Rebecca, Tap & Bottle helped pioneer Tucson’s craft beverage scene with a hybrid retail-and-bar concept focused on local beer and wine. Since then, the Saffords have expanded the business into multiple concepts, including Westbound, a cocktail-focused bar built from a shipping container, and Sunshine Wine, a newer addition on the Sunshine Mile that pairs an extensive wine selection with a small kitchen.

In response to changing customer habits, the couple has broadened its offerings beyond beer, adding wine and cocktails across its locations to appeal to a wider audience.

“It’s made it more destination-y for everybody,” said Rebecca. “We always like to create places that we want to hang out at.”

Maintaining that atmosphere while growing has required a deliberate approach to both staffing and location. Rather than scaling quickly, the Saffords have focused on building neighborhood-driven spaces anchored by familiar faces.

“A lot of it’s staff — having those regular bartenders and hiring people who live close in the neighborhood,” Scott Safford said.

In a market where customers have more reasons than ever to stay home, that kind of connection has become as important as anything on tap.

That emphasis on experience extends into Tucson’s restaurant scene, where operators say creating a distinct atmosphere has become just as important as the food itself.

At Rollies Mexican Patio, chef and owner Mateo Otero has built his brand around a sense of familiarity and connection.

“We want it to feel like you’re at a family member’s backyard party,” he said.

That feeling — relaxed, welcoming, rooted in culture — has helped Rollies stand out in a city known for its depth of Mexican cuisine, and expand to a second location, Rollies West. But like other small business owners, Otero said maintaining that experience requires constant attention, particularly as costs rise and customer expectations increase.

“There are definitely challenges right now,” he said. “Rising food costs, labor and the overall cost of doing business.”

At the same time, he said, customer expectations have risen. “Customers expect more. It pushes us to stay consistent every day.”

As the business has grown — from a single concept into multiple locations and a food truck — that has meant staying closely tied to the original vision.

“As we grow, we’re always asking ourselves if what we’re doing still feels like Rollies,” he said. For Otero, that focus on experience is ultimately what keeps people coming back.

“People don’t just come for a meal — they come for the experience.”

That same dynamic is playing out across Tucson’s small business landscape, from restaurants to retail shops, where owners say emotional connection is becoming a key differentiator in an increasingly competitive market.

At Mildred & Dildred, Ruhe said that often means offering something simpler — and more personal — than what customers can find online.

“People come in just because they’re having a bad day… to improve their day a little bit,” she said, having noticed it’s not just the 10-and-under set anymore that likes hanging out around toys (it probably helps that her store features many nostalgic favorites — “dolls and trains and kind of classic toys”). That emotional connection has become a growing part of the business, particularly in the years following the pandemic.

“It almost seems like after the trauma of COVID-19, people are wanting something simple and something sweet.”

It’s a reminder, Ruhe said, of what small businesses can still offer in an era dominated by convenience and e-commerce.

“That’s something we can do that Amazon can’t.”