Lei shop owners say that more people are looking elsewhere for cheaper lei — or forgoing their purchase altogether — as the slumping economy takes its toll and chain stores eat into their business.

At Flowers Forever in Lihu'e, Kaua'i, graduation sales of floriculture items dropped about 20 percent compared with last year, said store owner Alan Tada.

"With Costco and Wal-Mart in the picture now, all the small businesses are affected," Tada said.

Pua Lei owner Avery Kano, who opened his business last October in Kapa'a, said customers who turn to chain stores for cheaper lei are probably getting what they pay for, Kano said.

"Although they are at a less expensive price, you don't get the quality you would get at a local flower shop," he said.

Kano acknowledges that it's possible more family and friends opted to create their own lei for graduates this year by plucking flowers themselves or stringing together pieces of colorful ribbon.

Daniel Paik, general manager of Aloha Island Lei & Floral in Honolulu, said sales at his store are down about 30 percent from the previous year.

The lei shop also provides lei to some of the box store chains and drug stores.

"Sales on that end have remained stable," Paik said. "It's the retail stores that are hit hard."

FLOWER SHORTAGE

Paik said he noticed sales starting to decline last November, a bad omen since most florists make their highest profits in the first half of the year, particularly in the May-through-June graduation season.

The drop in business might have been more severe were it not for a shortage in local flowers this year.

"People didn't have too much choice," he said, and probably had to pay more for what they did get.

While Paik still serves a reliable core of loyal customers, he's noticed that more customers in general are "price shopping."

"A lot of them will call to check," he said. "Some of them will call back and some won't. They're looking for the best price, although they may still call back if we have what they're looking for."

Paik said changing shopping habits are also contributing to the drop in traditional retail lei and flower sales.

"People may not go (to a box store) to buy lei, but if they're already there to buy alcohol or whatever for the party afterward, they'll just pick one up because they're already there," Paik said. "Their prices are competitive, but it's not like people are saving two dollars per lei. It's more about convenience."

'CUTTING BACK'

Steve Fujikami, owner of Fujikami Florist in Honolulu, said flower sales in general have been in decline over the past year. He estimates that sales at his shop are down nearly 30 percent.

"Flowers are a discretionary (purchase)" he said. "Everybody is cutting back."

Floriculture and nursery sales in Hawai'i decreased from $109 million in 2007 to $99 million in 2008, according to the National Agricultural Statistics Service's Hawai'i Field Office.

The poor economy has played a devastating role by forcing customers to watch their spending, with sales at JC's Flowers in Wailua, Kaua'i, down about 25 percent compared with last year, said owner Calvin Wada.

With fewer visitors traveling to the Islands, Wada has been reaching out to local clients by offering incentives such as buy seven lei, get one free.

"I have a lot of regular customers, so I can't complain," he said.

Tada said flower shops in Hawai'i always face the difficulty of having to pay about 40 percent of every dollar for freight. He recently cut his workforce by 20 percent to 25 percent to compensate for the economic crunch, with 14 or 15 employees now on-call.

Despite the economic hardships, the tradition of presenting lei won't fade anytime soon, he said.

"I personally want to see the aloha spirit spread more because that's all we have in Hawai'i apart from any other place in the world," he said.