Businesses prepare for new climate

When state’s economy restarts, it will feel different for consumers

Consumers will likely face a business landscape altered by the deadly coronavirus after Gov. Ned Lamont and his advisers begin resuscitating Connecticut’s economy.

A plan is emerging less than three weeks before a May 20 deadline set by Lamont for recommendations on how to restart businesses. First will be the opening of outdoor areas at restaurants and bars, outdoor museums and zoos and offices and retail outlets.

“This is baby steps,” Indra Nooyi, co-chairwoman of Lamont’s Reopen Connecticut Advisory Group, said Thursday. “We have to tiptoe our way through it.”

With about one-fourth of the state’s workforce laid off or furloughed, consumer spending will not likely return quickly to levels seen before the pandemic, economists say. Unlike other recessions caused by economic or financial crises, this downturn was the result of a rare public health crisis that will not end soon, possibly reshaping long-term spending habits.

“You can open Connecticut for business, but will consumers spend and will businesses invest?” economist Peter Gioia said. “People are reassessing their lifestyles. We’re not going see consumption for consumption’s sake.”

Tourism, large venues and more

Some businesses will look different and forfeit revenue after they reopen. Offices will be vacant as employees grow accustomed to working at home, Gioia said. To enforce continued social distancing rules, restaurants may space tables further apart and barbershops could have fewer chairs.

Tourism, which the state said generated $14.7 billion in sales as of January 2019, could offer visitors fewer choices this summer than last year.

“A lot will depend on what can open first,” said Tony Sheriden, president of the Chamber of Commerce of Eastern Connecticut. “Beaches, parks, fishing in the Quiet Corner, outdoor recreation. That’s all easy.”

“Restaurants — how will that unfold?” he said.

Large venues, such as the Foxwoods Resort and Mohegan Sun casinos and Hartford Yard Goats games that thrive on crowds, probably won’t return quickly to business as usual.

“I think they’ll be a little longer coming back,” Lamont said. “Those places where it’s tough to socially distant, those places where you have a big crowd I think are a little tougher to make sure that we keep this virus under control.”

Members of fitness centers and gyms also may be required to book times online. The International Health, Racquet and Sportsclub Association asks gyms to consider how they might limit fitness class size, restrict members from congregating or implement strict cleaning policies.

Watching virus trends

Lamont’s Reopen Connecticut Advisory Group is watching the trend lines of the coronavirus as it affects counties differently.

“When there’s an outbreak in one part it does affect other parts of the state,” said Dr. Albert Ko, a Yale University epidemiologist and cochairman of the group. “You really want to make sure that the source of these infections is being controlled.”

The governor and General Assembly may be pressed to stoke economic growth, particularly because Connecticut has barely recovered from the financial meltdown a decade ago.

“It’s a crawl, walk, run strategy,” said David Lehman, commissioner of the state Department of Economic and Community Development.

He described a three-phase approach, starting with Lamont’s initial response to the pandemic with executive orders to shut businesses, extend tax payment deadlines, authorize loan forbearance and other moves.

The second stage is to reopen business; followed by recovery, which would call for investment, job creation and other strategies, Lehman said.

Glimmers of hope

Seven weeks into the lockdown, glimmers of hope are appearing as COVID-19 cases peak and the number of new cases begins to decline. The encouraging signs have sparked protests demanding government ease restrictions and let workers and businesses get back to making and spending money.

“I think there’s frustration and there’s anger,” said Senate Republican Leader Len Fasano of North Haven.

Lamont said a range of choices are available to gradually open restaurants and other businesses while guarding against a COVID-19 flare-up. Restaurants could operate safely as outdoor spots and waiters could wear masks and gloves, the governor said. Owners also could make money making meals to add to the food supply chain, he said.

And Lamont said barbershops could operate if barbers are tested or wear masks and customers have their temperatures taken. His advisory committee is considering a range of possible policies, he said.

Economist Donald KlepperSmith said officials must consider density and proximity of customers as businesses reopen. Will restaurants be forced to cut their maximum occupancy in half? If so, would that benefit chain restaurants at the expense of family-owned businesses, he asked.

Those are among the issues Lamont’s advisory committee is considering, Lehman said. “Nitty gritty” questions, such as whether a restaurant’s business model works at 50% occupancy, are part of the discussions, he said.

Bob Sulick, a co-owner with his wife, Danita, of Mulberry Street Pizza in Manchester and Mulberry Too in Glastonbury, said his Manchester business is a “small tight space” with a bar that “inherently is a place you want to be close together.”

If it’s forced to reduce the number of customers and take a revenue hit, Mulberry Street Pizza, which has furloughed 40 employees, has a diversified business that includes the bar, dining room and pickup and to-go services, Sulick said.

His advice to Lamont is to “be a little more aggressive” in allowing restaurants to open. “I think they should push it a little,” he said.

Fred Carstensen, a University of Connecticut economist, said the pandemic gives Lamont an incentive to push for public works projects such as data centers sought by universities and businesses.

Connecticut, with an aging workforce and cities that struggle to attract employers, has not fully climbed back from the Great Recession a decade ago. Before the pandemic, unemployment was 3.7%, a historic low, and the labor force gained back all the private sector jobs lost in the financial meltdown, though it failed to expand beyond the number of jobs available before the 2008-09 downturn.

Economic progress of the past decade is at risk, as the coronavirus tore through a huge swath of businesses in Connecticut.

“Recovery for Connecticut is not recovery,” Carstensen said. “It’s just getting back to where we were 15 years ago. We must be more imaginative. If we don’t, Connecticut is in the ICU.”

Gioia cautioned that the way forward could be difficult.

“People shouldn’t be despondent,” he said. “We’ll open up. It may not be pretty.”