They are writing letters to the Berkeley Chamber of Commerce outlining their plans to boycott the city.
And they are steering clear of downtown shops because of the weekly anti-war protests that in recent weeks have become increasingly volatile.
Two weeks after the Berkeley City Council refused to apologize to the Marine Corps for calling them "uninvited and unwelcome intruders," Berkeley businesses said they are feeling the backlash from people who don't want to spend their money in the city.
"We're hearing of folks canceling reservations and canceling hotel rooms, and we know there is a direct correlation. How big, I don't know. We're in a tough economic period anyway," said Ted Garrett, chief executive officer of the chamber.
Garrett said the chamber has received an estimated 300 e-mails, letters and faxes from people upset about the council's action and its refusal to apologize.
"Folks are upset," he said. "Unfortunately, they are blaming the businesses."
Mo Hallaji, owner of Pollo's at Shattuck Avenue and Addison Street, said his business has declined 10 percent to 15 percent this month because of the traffic jams and fighting associated with the protests.
"They are killing our business," Hallaji said. "Everybody is against the war,
Quentin Moore, owner of Berkeley Hardware on University Avenue, is not far from the Marines' recruitment center at 64 Shattuck Square, and the protests might be causing a downturn in his business, he said.
"I see maybe two or three customers in here and maybe (the protests) are the reason," he said.
Anti-war group CodePink, which held another rally Tuesday, has been holding protests since last fall, while the group The World Can't Wait got involved recently. The demonstrations are becoming increasingly volatile: Police have arrested five people recently, including two last week.
Also last week, protesters violated their city permit by moving away from the recruitment center and yelling through a megaphone.
"The downtown is like a full-time circus right now. There isn't a day when we're not hearing the drums and the noise (from the various groups). I think it's off-putting," said Susie Medak, managing director of the Berkeley Repertory Theatre.
CodePink leaders, who went door-to-door Tuesday, passing out sandwiches and pink window signs reading, "Another Berkeley Business for Peace," disputed the notion that the protests are negatively affecting downtown businesses.
"If they want to blame the downturn in the economy on a protest against the Marines, it's a pretty bad excuse," said CodePink co-founder Medea Benjamin.
City Councilmember Dona Spring also said she doesn't view the protests as a problem. She said only the businesses on the same block as the demonstrations are being affected.
"Every anti-war group in the East Bay wants to come and protest. This is where the action is," she said.
On Jan. 29, the Berkeley City Council agreed to send a letter to the U.S. Marines, calling them "uninvited and unwelcome intruders." At the same time, the council also approved a fee-waiver for a parking space and event permit for CodePink's weekly protests.
Many were angered by the move that they viewed as anti-military and anti-American. An estimated 30,000 e-mails were sent to City Hall, condemning the council's move.
On Feb. 12, anti-war groups were confronted by hundreds of military supporters, veterans and parents of soldiers, who rallied in front of Old City Hall in the hours leading up to a City Council meeting. The meeting was scheduled to reexamine the city's original anti-Marines stance.
In the early hours of the next morning and after more than 125 people spoke on both sides of the issue the council voted 7-2 not to send the letter to the Marines. The council also refused to apologize, and outlined its support for those protesting the presence of the Marines' recruitment center.
Garrett said merchants are being punished for the council's actions.
"(We) strongly encourage the City Council to offer a public apology to our community and the countless others who were offended by their actions folks who roll up their sleeves every day and work hard to serve their country and their community," he wrote in a recent letter.
Deborah Badhia, executive director of the Downtown Business Association, said the fall-out and the protests have been a "hardship" on businesses.
"In spite of any political issues that are going on, we still want the public to know that they are welcome and invited in Berkeley," she said.