‘We aren’t making it’: America’s neighborhood stores face uncertain futures

This article is reprinted from The Guardian:

https://www.theguardian.com/business/2020/mar/26/us-small-businesses-coronavirus-future-struggle

The ice-cream shop Island Pops in Brooklyn usually sees its business pick up from a winter lull this time of year, when the days are longer and the spring weather sets in.

Instead, its doors are closed to walk-in customers at the order of health authorities hoping to stem the spread of coronavirus by keeping people in New York City out of restaurants, bars, gyms and movie theaters.

Across the US small businesses selling coffee, cakes, pilates classes, books and artisanal cheese have popped up over the last decade, changing neighborhoods for the better, revitalizing downtowns. Now all that is under threat.

Loyal customers – and some big businesses – are trying to help. Buying gift cards, making donations. But on its current trajectory the scale this unprecedented crisis means many of these businesses just won’t survive.

Cities and states across the US this week issued similar orders to close restaurants to dine-in customers and close businesses which create crowds, leaving small businesses such as Island Pops uncertain how long it can go on.

“The government should understand that, one, we aren’t making it,” said Shelly Marshal, Island Pops’ co-owner. “And two, if we have to close up, there are five or six people who have to go home without pay. If they can bail the big banks out they can definitely bail small businesses out.”

Small businesses are the anchor of the US economy and employed 58.9 million people in 2015. Governments are introducing measures to help ease the burden of forced closures, but business owners are worried that help is coming too little too late as they see an immediate drop in business.

Like countless other businesses, Island Pops is encouraging customers to buy gift cards to use after the crisis passes to try to stem immediate losses. Otherwise, their only other income stream is delivery and pickup orders.

“Even that won’t take us through the month for our responsibilities,” Marshall said. “We have staff, of course we have rent, we have insurance, we have everything that still needs to be paid and we’ve gone through our emergency fund, which is our winter fund.”

As of Thursday morning, Marshall said it was unlikely the business could meet the minimum amount of pints it needs to sell each week. It has even become hard to rely on loyal customers, because they too are losing their jobs, or fearful a recession will limit their funds too.

Marshall said her neighborhood, a gentrifying part of Brooklyn with a lively food and drink scene, has been a “ghost town” this week. During one shift, she commiserated with an independent coffee shop owner, who told her at 2pm she was his fifth customer of the day, after opening at 6am.

Patrick FitzGerald, a lecturer at the University of Pennsylvania’s Wharton Business School, said while people might think the world is technology-focused, small businesses depend on in-person interactions.

“The reality is for 90% of small businesses, it’s face-to-face, one-on-one, transactions,” FitzGerald said. “And at the moment, those have all, for the most part have stalled, so the impact is highly dramatic.”

Technological advances can help, however, and FitzGerald said for any business which has been toying with using video conferencing, at-home delivery or pre-purchasing: “The time is now to deploy those.”

Amanda Holpuch is a reporter for Guardian US, based in New York.

Featured image credit: Anadolu Agency