How’s Your Economy, Small Businesses Death Watch Edition
It’s depressing, but not exactly surprising, to see a major New York Times story about one-third of the small businesses in the city have died or expected to shutter. Needless to say, it’s not just restaurants. The piece showcased Busy Bodies, a playspace for children in Brooklyn, and Bank Street Bookstore, a children’s bookstore, as among the casualties. From the article:
An expanding universe of distinctive small businesses — from coffee shops to dry cleaners to hardware stores — that give New York’s neighborhoods their unique personalities and are key to the city’s economy are starting to topple….
While New York is home to more Fortune 500 headquarters than any city in the country, small businesses are the city’s backbone. They represent roughly 98 percent of the employers in the city and provide jobs to more than 3 million people, which is about half of its work force, according to the city…
The first to fall were businesses, especially retail shops, that depended on New York City’s massive flow of commuters. And months into the crisis, established businesses that once seemed invincible, including some that had ambitious expansion plans, are cratering under a sustained collapse in consumer spending.
It was an easy call, sadly, to predict the demise of shops that depended on commuter traffic. In my short visits to NYC (where I am doing nothing except medical stuff, but that does mean a few cab rides), it’s spooky how underpopulated Midtown and the Flatiron district on weekdays. Another testament was how few restaurants near my hotel, which was on the edge of Midtown, were open; I wound up ordering from the same place repeatedly because it was open, adequate, and would deliver. I began to suspect it was in the money laundering business since that would explain its survival. It had no menu online, not even a website. When I asked to drop off one with one of my meals, they said, “We don’t really have one.”
We’d forecast a hollowed-out New York City, but seeing it happen, and quickly, is still disheartening, even before you get to the human trauma of job loss. Running errands on foot, being friendly with local shop staff, and the entertainment value of active street life, the charm of cities, will be diminished.
Here in Birmingham, as I’ve said, things look a lot like the old normal, but we’ve already had quite a few formerly successful restaurants close and others are trying to limp along on takeout, which of course means lower headcount. I know a local manufacturer plans to cut 40% of its staff once the PPP obligation passes, which is soon. More stores in underpopulated malls, even upscale malls, are vacant as national and regional chains close shops or even liquidate. Salons and gyms are still open but I don’t have a handle on how they are doing. I don’t see any local reports on commercial rent arrearages.
The flip side is Birmingham isn’t a tourist destination nor does it have many big businesses outside the University of Alabama and some large hospitals, so the decline in travel is hitting the city less hard than a lot of other parts of the US. However, there’s also typically a lot of moderate to big ticket home upgrading in this suburb (the kind that requires contractors). I see much less of it this summer than usual. But a lake about an hour from here which is one of the deepest and cleanest in the US has homes and condos on it selling like hotcakes; the only inventory is inferior properties.
That is a long-winded way of asking: how is your local economy doing? And specifically, how do small businesses seem to be holding up?