Northwest Arkansas Democrat-Gazette
Pandemic batters small outlets vital to recovery
WINCHESTER, Va. — Founded in 1744 and fought over repeatedly during the Civil War, Winchester, a city of 28,000 residents, years ago blocked off several blocks downtown to create a pedestrian mall — a bulwark for businesses against the big box stores on the outskirts of town.
In a normal year, hundreds of book lovers would have descended on Winchester this summer for Shenandoah University’s annual children’s literature conference.
Some would have made their way to Christine Patrick’s bookshop downtown. Winchester Brew Works would have rolled out kegs this month for Oktoberfest revelers. The Hideaway Cafe, occupying a prime location at the corner of Cork and Loudoun streets, would
be advertising its monthly Divas Drag Show.
But 2020 is no normal year. The literature conference, Oktoberfest and drag shows have all been canceled — casualties, like so much else, of the coronavirus pandemic.
The pandemic has hammered small businesses across the United States — an alarming trend for an economy that’s trying to rebound from the deepest, fastest recession in U.S. history. Normally, small employers are a vital source of hiring after a recession. They account for nearly half the economy’s output and an outsize portion of new jobs.
“Small businesses are the engine of the economy,” said Ahu Yildirmaz, co-head of the ADP Research Institute, a think tank affiliated with the payroll processor ADP. “In past recessions, they were the ones really fueling the economy.”
In addition to their economic impact, small businesses define communities.
Roughly one in five small businesses have closed, according to the data firm Womply.
To encourage foot traffic at businesses, Winchester even designed traffic lights to make it easier to traverse downtown on foot than by car, sometimes to the consternation of motorists caught in stop-and-go traffic.
But city planning is no match for a global pandemic.
“We’re in such a weird, weird time,” said Mayor John David Smith Jr. “Small businesses and families are hurting.”
Some Winchester businesses folded quietly in the spring, he said, choosing not to renew their leases. One was The German Table restaurant, which closed in April with this explanation on its Facebook page from its owner:
“I am always a happy and positive person, but I really think that this virus will be kicking a lot of small businesses in the ass!! With no positive changes in sight, reopening in maybe 4-6 months seems almost unrealistic.”
Others are holding on. They’re receiving government aid and loans or readjusting their operations to reach customers online. Some are now offering curbside service and deliveries or are benefiting from residents who buy local to keep cherished Winchester businesses from going under.
When the pandemic struck in early spring, the American economy fell into a sickening free-fall as businesses everywhere shuttered and consumers stayed home to avoid infection.
Even though hiring partly rebounded as businesses began to reopen, the nation is still down 10.7 million jobs since February.
ESPECIALLY VULNERABLE
Lacking the credit access and cash stockpiles of larger companies, small businesses were especially vulnerable to the economy’s sudden stop.
Many crumpled under the pressure. Extrapolating from numbers provided by Yelp and Womply, Steven Hamilton, an economist at George Washington University, estimates that 420,000 U.S. small businesses had closed permanently by July 10.
And small- business troubles aren’t confined to stressed-out owners. They generate nearly 44% of U.S. economic output, according to the Small Business Administration, and account for two- thirds of new hiring. (The agency generally defines small businesses as those that employ no more than 500 workers.)
Governments at all levels did scramble to protect small businesses. In addition to the expanded unemployment aid, Congress approved the Paycheck Protection Program, which provided $520 billion for 5 million businesses, most of them small.
In Winchester, too, the city government offered small grants — Christine Patrick’s Winchester Book Gallery received $ 500 — and suspended parking fees to encourage shoppers to keep visiting the downtown pedestrian mall.
But Congress has failed to agree on another financial rescue. Without further federal aid — soon— economists warn that the recovery is likely to falter and intensify pressure on small businesses that are straining to survive.
SOME BUSINESSES ADAPTING
In Winchester, Emily Rhodes, owner of Polka Dot Pot, didn’t wait. She knew the pandemic and the lockdowns it would require could wreck her business of offering pottery-making classes. Working with a tech-savvy friend in Ohio, she and her staff created a website from scratch, started taking orders and arranged for curbside pickup.
“To-go kept us going,” she said.
Rhodes also started delivering craft kits to customers. She dressed up as the Easter Bunny to take packages to children in April.
At the Hideaway Cafe, owner Victoria Kidd took a similar approach. The Hideaway began delivering “quarantine care packages.” Adults would receive wine or beer, baked goods, a roll of toilet paper and a thank-you note from Kidd’s 7-year-old daughter. Children would receive sweets, delivered by cafe workers in costumes — a pirate, a wizard, a unicorn or Kylo Ren of “Star Wars”.
Kidd also had another idea: “Beverage bonds” that allowed customers to pay now for coffee they’d drink later. The drive generated $10,000. As it turned out, few of the buyers ever redeemed their bonds; they just wanted to keep the cafe going.
The threat to their small businesses, it seems, evoked a protective instinct in Winchester residents. Many shared the idea, said Christine Patrick of the Book Gallery, that “If Amazon and Google own the world, we’re in trouble.”