With people stuck at home for much of the past two months, there have been some changes in shopping habits – one good for small-town America, one not so good.
Many people have shied away from the big box stores in regional shopping centers that have seen a significant number of COVID-19 cases. Neighboring Kandiyohi County has recorded 468 cases of the deadly coronavirus as of Monday. Stearns County, the home of St. Cloud, will have over 2,000 cases by the time you read this column. Shoppers are also avoiding the grocery stores in regional centers, preferring to buy their goods closer to home.
Shoppers staying closer to home, patronizing their local stores, has been good for small towns at a time when business has otherwise been tough. If we can just capture some of these shoppers convincing them to support their local stores as the fear of the virus fades, we will have gotten some benefits from its otherwise deadly and destructive impact.
On the downside, a growing trend for people to shop online for a very broad range of things they need and want has accelerated. Area environmental service departments are seeing an increasing volume of recyclables coming in, including a huge amount of cardboard.
That cardboard is being generated by all the boxes being delivered to people’s homes by the U.S. Postal Service, FedEx, and UPS. A large number of the boxes are coming from Amazon. Other national mega-chains are also participating in the online shopping wave as well.
Back in September, we wrote that we had recently met a driver for UPS who gave us some insight into how pervasive Amazon’s sales are in rural Minnesota. He said 60 percent of his deliveries were Amazon packages. That was before COVID-19.
As many stores in America had to shut down, in cities big and small, Walmart, Target, Home Depot, Costco, and other multi-billion-dollar giants saw their sales jump. They were allowed to stay open because they sold goods that were considered essential. They didn’t rope off the areas where the non-essential products were sold. They sold them right alongside those essential goods while main street America suffered.
“Walmart’s years of investing billions in integrating stores and e-commerce have paid off handsomely during this pandemic,” Phil Wahba writes in Fortune magazine.
“The retailer’s online sales in the U.S. rose 74% in the fi rst quarter, as customers stocked up on essentials like food and cleaning products and items like toys, electronics, and home furnishings, attracted by the option of being able to drive up to a store to collect an order rather than venture in—or to simply order items on Amazon.
“The news sent shares in Walmart, the No. 1 company on the Fortune 500, up 2% on Tuesday. They have risen 24% since the first U.S. lockdowns started in early March and are near all-time highs. Walmart also operates a large international business and the Sam’s Club warehouse chain,” the Fortune story says.
Amazon was expecting to see a profit of $4 billion in the second quarter of 2020. It is experiencing some difficulty, however, due to substantial delivery problems because it can’t keep up with all the orders.
People who have ordered little or nothing online in the past are getting in the habit of doing it. People wary of going to a crowded store will order online to stay safe. They see how convenient and easy it is. The signs are in the amount of cardboard coming into county environmental services facilities.
We’ve now hit 100,000 deaths in America from the COVID-19 disease. Two months ago, on March 28, fewer than 3,000 people had died from the disease. There is another 100,000 number that also tells a story of the deep impact of the coronavirus on our lives.
“Economists project over 100,000 small businesses have permanently closed their doors so far due to the pandemic, according to a recent study from researchers at Harvard University, the University of Chicago, Harvard Business School, and the University of Illinois,” Abha Bhattarai writes in The Washington Post.
“Profit margins for small businesses are slimmer compared to larger ones, and experts say many more could be forced into bankruptcy in the coming months,” she writes.
“We are going to see a level of bankruptcy activity that nobody in business has seen in their lifetime,” James Hammond, chief executive of New Generation Research, told the Washington Post. “This will hit everyone, but it will be harder for small businesses since they don’t have a lot of spare cash.”
While the giants of commerce are made stronger by COVID-19, main street and the retail business in America are decimated.
“It’s a self-fulfilling prophecy: the bigger, stronger players are taking even more market share,” Mickey Chadha, senior credit officer at the rating agency Moody’s, told The Washington Post. If this is our future, it is one that leaves America less diverse, less vibrant, less colorful, and less entrepreneurial.
“I say, phase 2 we close Walmart, Costco, and other big names and let all the small businesses have a turn at making money,” a post on Facebook said this past weekend. Add Amazon to that group.
How this story ends for small-town America’s businesses depends on the people of our community. Shop local every chance you get and help write the final chapter of this story.