Alabama Retail Tries To Rebound After Coronavirus Shutdown

BIRMINGHAM, AL — As April comes to a close, so does Gov. Kay Ivey's monthlong shutdown of retail stores throughout the state. As retail reopens — with social distancing restrictions — many businesses will try to rebuild from what has been a devastating drop in revenue.

The easing of restrictions comes under a new “safer-at-home” order that runs through May 15, replacing Ivey’s stay-at-home order that expires Thursday.

While some businesses were allowed to stay open during Ivey's shutdown, retail stores all over the state were left playing a waiting game of sorts wondering what to do about sales, about employees and about their rent and overhead.

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"We closed our doors on March 22. We had to lay off 65 people that day. It was the single hardest decision we ever had to make. It's also the first time those doors have been closed in 70 years," said Michael Gee, owner of the Pants Store, which has shops in Mountain Brook, Trussville, Leeds, Tuscaloosa and Huntsville. "We went to work and ramped up our online businesses on pantsstore.com and our Facebook site Pants Store VIP. Online business increased dramatically, but it's still not enough to sustain our business."

Safer At Home

For business owners such as Gee, being able to reopen Friday was welcomed, even with the restrictions under which all retail has to open.

The safer-at-home order means:

• All people are asked to wear face coverings in public and to continue proper hand-washing and hygiene.
• Nonwork gatherings of 10 persons or more are prohibited.
• Employers should take reasonable steps to avoid gathering of 10 persons or more.
• All retail businesses will be allowed to open with a 50 percent occupancy rate.
• State beaches will be open.
• Elective medical procedures may resume.
• Entertainment venues and athletic facilities will remain closed
• Hair salons and other close-contact businesses will remain closed

Unless prohibited by the order, all employers can open as along as they avoid gatherings of 10 or more employees, maintain social distancing of at least 6 feet, disinfect frequently used items and surfaces, encourage hand-washing, prevent sick employees from coming into contact with others, facilitate remote working and minimize employee travel.

"We felt like we had to get our doors open sooner than later to survive," Gee said. "We will have occupancy limits in all stores, implemented customer flow and spacing, increased cleaning and sanitizing, and we will have hand sanitizer readily available. We are beyond excited to welcome our customers back in our stores on Friday."

Shops such as the Pants Store or the Lili Pad, a children's clothing store in Cahaba Heights, have to alter the entire retail experience by adding social distancing procedures. The Lili Pad's Katherine McRee posted an informative update on Facebook regarding what the store is doing to reopen:

McRee said that if customers had not continued to shop via text or phone with curbside pickup, the Lili Pad would not have survived the shutdown. "The last six weeks have honestly been an emotional roller coaster for everyone, small businesses included," McRee said. "Come Friday morning, we — not just the Lili Pad, but all small businesses — need y'all more than ever."

The Aftermath

Alabama saw 406,732 unemployment claims between the week of March 16 and the week of April 20 this year, compared with 13,597 during the same time last year.

So many Alabamians being unemployed also means a drop in income that would normally have been used to purchase retail goods. So in addition to the loss of income during the shutdown, retail businesses will feel the effects of the shutdown long after reopening.

Lower revenue for retail stores also means lower sales tax revenue for the state. That dip in revenue dips into the Alabama Education Trust Fund for next year's public school budget. This could have major implications on state funding for teacher units, textbooks, athletics and more.

In the past, when sales tax revenue has slipped, school systems were forced to make cuts as their budgets became prorated. In the early 2000s, Alabama school systems faced a 40 percent cut in the Education Trust Fund, which forced teacher layoffs, cuts in extracurricular activities and student resources.

Although sales tax collection numbers are not available for the month, many retail businesses have reported between 80 and 90 percent drops in revenue for the month, which would require a major spike in sales for the remainder of the year to offset the losses.

"Our sales are down by 80 percent," McRee said. "The drop was sudden, and we had to react and adapt super fast. We immediately started 'text shopping,' FaceTime Shopping and continued with selling on Instagram and Facebook. We began shipping and offering curbside pickup. The month of April, we had 500 curbside pickups and shipped about 100 packages. We wanted to do everything in our power to continue to provide a personal experience. We also gave out children’s face masks for a donation to the Bundles of Hope Diaper Bank. We are fighters and will come back stronger than ever."

Alabama Retail Association president Rick Brown was critical of the governor's closure of small retail businesses but not big box stores such as Walmart or Target.

"The Alabama Retail Association and many of its members don’t understand a public policy that sends the same number of consumers to a smaller group of retailers creating denser crowds," Brown said in a statement. "This policy seems at odds with the Alabama Department of Public Health’s stated objective to avoid large gatherings."

Brown made the suggestion weeks ago to reopen small retail stores with occupancy restrictions and social distancing standards similar to those placed on big box stores. "This will diffuse consumers to more retailers, thus limiting crowds. An added benefit is that this policy change will invigorate our local economies and keep retail employees employed."

Brown stated that retail stores and restaurants are the state's largest private employers and that their value goes far beyond just sales tax revenue.

"Local retailers are what makes your community a community," Brown said. "It’s what gives it a unique flavor. If those retailers aren’t around anymore because they’ve gone out of business, we won’t have the uniqueness in our individual communities that we enjoy today."

What Local Residents Can Do

A rebound for retail in the area depends on customers and getting the money back into small businesses.

"With graduation and Mother's Day in the next two weeks, it is a critical time for our merchants and retailers to try and recoup lost revenue," said Suzan Doidge of the Mountain Brook Chamber of Commerce. "Many of these business have changed their operating procedures to accommodate customers, but make no mistake — this has not been an easy time for any of them."

Doidge added that "the new normal" is not ideal, as half capacity means half the revenue for these stores.

To celebrate reopening, the Lili Pad is having Mom’s and Mimosas in the morning and Mom’s and Margaritas in the afternoon. "Of course, we have made adjustments and changes for safety," McRee said. "We have removed the children’s play area, but we will be offering crayons and paper for the children to color. We will allow no more than 20 people in the store at a time and practice social distancing. We want everyone to have a safe and fun shopping experience."

"If there ever was a time to shop local, it is now," Doidge said. "All of these business have been here for our community, and now it is time to be there for them."

SEE ALSO:

• City Of Birmingham To Require Face Coverings Effective May 1
• UAB Expert Defines Coronavirus Terminology For Everyday Life
• Auto Insurers Return More Than $100 Million To Alabamians