Facing a challenge of sales declines
Firms that depend on daily spending scramble
Karen Carrier stepped into her restaurant on Monday morning, went into the kitchen and told herself: “Get on the line and cook. That’s what I have to do.”
Outside the Memphis restaurant, all looked normal. Inside, Carrier was pressed to figure out a question facing almost every business: How to keep the enterprise stable amid the great coronavirus scare.
She sent one cook home. Taking over some duties at the stove, or “the line,” as she called it, was a way to control costs. It was her first step in response to the virus outbreak.
Small businesses help form the backbone of the Memphis economy, but Monday offered the first glimpse into the new world of self-quarantine and what it means for small firms trying to stay afloat. Layoffs, shortened work hours and enforced time at home seem certain to push unemployment in the metropolitan area above the current 3.9% rate.
“This is the week when we start to understand how it’s all going to play out,” said Carrier, owner of the Beauty Shop Restaurant in Midtown’s Cooperyoung district.
On Monday, tens of thousands of working Memphians were buttoned up inside their homes, suddenly selfisolated in the face of the virus outbreak. More than 150,000 children stayed home from school as well. The intensity of what is happening weighed further on Memphis as the day wore on. A wave of cultural, tourism and entertainment sites announced temporary shutdowns, following a flurry of school, church, sports and other institution closings late last week.
U.S. health officials figure self-containment can stop the virus from spreading rapidly the way it could among large groups. That has left many restaurants, merchants and enterprises that survive on daily spending by patrons trying to figure out how to stay solvent. A study for the New
York bank J.P. Morgan Chase last year reported only 49% of its small-business clients had enough cash on hand to run for two weeks. In Washington, government officials have discussed providing income assistance for people whose income dropped as they stayed home. But so far the assistance is still under debate.
“People are just scared to come out,” said a spokeswoman for 35-employee Desoto Athletic Club in Collierville, noting clients were scarce over the weekend and on Monday. “But we’re not closing down unless the government tells us we have to.”
Many companies, including The Commercial Appeal, have suggested or ordered thousands of still-employed workers to care for their jobs from home. While the Batteries + Bulbs store in Southaven had a full complement of four workers in the shop Monday afternoon, other small companies scrambled. Some, such as freight and logistics handlers, have to assure disrupted supply chains stretching to China furnish enough parts to keep assembly lines running and workers employed.
Near the 1,800-acre industrial park on Presidents Island, where factories employ more than 2,000 workers, The Port Restaurant idled some employees Monday. The industrial park appears busy, but only four diners came in during the usually busy breakfast time, while food sales shot up next door in the convenience store, said Nick Vrettos, owner of the restaurant and the store. He figures patrons no longer want to mingle and risk picking up the virus from other diners.
“They are coming to the store because they can just pick it up and quickly go, but as far as people coming in and sitting down in the restaurant, it’s getting light,” said Vrettos, who kept roast beef and meatloaf on the menu but cut the number of meat lunch entrees from five to three.
Many of the 26,000 enterprises open for business in metropolitan Memphis are in similar straits. Customers stop by, but not in the former numbers. Just before the virus threat set in, about 26,100 residents in the nine-county metro area were reported drawing unemployment and another 624,000 residents were working. If each enterprise idles one worker, the unemployment rate could double, and in turn curb spending at small businesses.
Over the weekend, sales had slumped about 40% at the Beauty Shop. And four weddings catered by Carrier’s other firm, Another Roadside Attraction Catering, were canceled over the last week. She took on some cooking duties and decided to change shifts and tasks.
“I have a lot of longtime employees. I want them to be OK,” said Carrier, whose restaurant was opened in 2002. “I told my staff I wanted them to understand: ‘We all have to work together.’ ’’
Carrier altered work shifts, so some employees work fewer hours but can still earn money. A night waiter with a daytime office job might give up a shift to a waiter lacking another job. She cut daily fish purchases to 10 pounds, though the restaurant maintained a full menu. And she decided 13-employee Beauty Shop would begin a curbside takeout and home delivery service. Ten catering employees insured as drivers took on driver duties for the restaurant.
“Everybody’s put everything on hold. It’ll come back,” Carrier said. “But we have to withstand it until it does come back.”
Memphis attorney Tawanda Williams adopted the same “withstand it” strategy. She worked at home Monday, making calls to clients.
Hearings on several of her misdemeanor and felony cases were rescheduled recently for April 20. Clients learning of the postponement worried they might be fined for missing the original hearing date. On the phone, she said, she assured people they were not in trouble. The courts were pushing back cases because of the virus.
Working at home spared her the daily commute, although Williams doubts she’ll give up her office Downtown near the courthouses.
“Once this passes and it gets back to as much normalcy as possible, I’ll keep doing what I’ve been doing,” Williams said. “A lot of clients, you need to meet them face to face. A lot of clients they want that contact.”
Not every firm requires regular personal meetings. When Taylor Jolley landed her job four years ago, she learned the firm embraced a work-at-home policy. Now it’s paying off. The firm, Obsidian Public Relations, is advising clients on ways to handle the coronavirus threat.
Obsidian’s 13 employees still come to the Downtown office, but many were like Jolley. She has divided her time between personal meetings with clients, collaborating in the office with Obsidian employees or working in a café between the clients and office using her Macbook Pro, iphone or iphone Pro.
“Most of our clients are needing support right now,” Jolley said.
On Sunday, she prepared communications documents for clients. They want to tell employees, vendors and customers how they are weathering the scare. She compares the impact of the virus threat to the famous 1982 Tylenol case. Criminals tainted acetaminophen capsules with poison. When the adulteration was discovered, Tylenol’s manufacturer quickly withdrew its product from every store.
“The Tylenol scare was different from what we’re seeing today but it relates to medical health and wellness,” Jolley said. “It’s one of those uncontrollable crises beyond the control of your business.’’
For that reason, she said, clients are being advised: “Make sure you’re staking steps and taking precautions to keep the consumer safe and the employees safe.” She’s also urging Memphians to aid small business in its time of crisis. Buying gift cards and sending messages of support are all welcome, she said.
Just how long this crisis will last is unknown. Carrier assumes human nature will take its course. Memphians bored by self-isolation will want to dine out again.
“We had a pretty good lunch” crowd Monday, Carrier said. “People were eating and drinking, They tipped well. I didn’t see a lot of regulars. But this is the beginning. By the end of the week, we’ll see how it’s going to play out.’’
owner of the Beauty Shop Restaurant i n Midtown’s Cooper-young district.