Like other proprietors of surviving businesses, Mallory Slate says adapting to changing customer needs allowed his stores to flourish.

Bob Slate used to sell basic school supplies, but has moved away from those into more expensive specialty items.

"I used to laugh at people who would come inlooking for a special kind of paper," he says. "Iwould say, `We ain't no damn boutique here! Wesell envelopes and notebooks and paper clips.'"

The store has shifted to upscale and "pretty"merchandise, according to Slate, in response tocustomer demand.

Incompatible Elite

Oona's owner Kathleen M. White says changes indemand have made her store unsuited to the peoplewho frequent the Square. She says costumes such asgenuine flapper dresses and 70s disco outfits,rather than everyday clothing, now provide thebulk of her income.

"People who live in luxury condos don't buyused clothing," she says. "I look outside now andI see power suits and sneakers."

White says she is looking for a new locationand mentions Davis Square, which she calls "theSoHo of Somerville," as one possibility.

"I'd be a fool to sit here until no one'scoming in anymore," she says.

Sage's grocery store, on the corner of Brattleand Church Streets, has seen and adjusted tosimilar customer changes since its opening in1898.

Owner Charles E. Sage says his customer baseused to include a number of suburbanites who woulddrive into Harvard Square and shop, but that helost this group due to lack of parking.

Now Sage has tailored his inventory tostudents.

"We don't sell heavy things or big sizes ofthings," Sage said, adding that he also hasincreased his stock of snack items to cater tostudents and a walk-in crowd.

Sage's success is due in large part to itsability to adjust in a very competitive market. Ifa Square store defaults on its rent, another isalways waiting in the wings to replace it.

"The problem with Harvard Square is that youreally have to be on top of your business becauseof the competition for your space," says John D.DiGiovanni, president of Trinity PropertyManagement, a Square landlord.

In this cutthroat market, the same customersthat some small businesses complain about can savea store with their loyalty.