Sales improve after pandemic’s initial shocks, but retailers’ concerns persist

Samuel’s Tuxedos and Gifts in Jefferson City opened in 1991 and is one of oldest formal wear stores in mid-Missouri. After the COVID-19 pandemic began, high school proms were cancelled, weddings were postponed and the demand for tuxedos instantly dried up.

“We lost a couple thousand tuxedo orders that we would have had for prom,” store owner Sam Bushman said.

The store lost a quarter of a million dollars in revenue in the first quarter of 2020, Bushman said.

Sam Bushman

Since the onset of the pandemic, several non-essential retail stores across Missouri have had to temporarily shut down or operate with limited capacity. Most retailers saw revenues drastically plunge, and some remain unsure about their ability to survive the pandemic.

“Some stores were already at the brink of bankruptcy because of changes in our buying habits, and COVID-19 no doubt sped that up and made it even tougher on them,” said David Overfelt, president of the Missouri Retailers Association.

Retail chains like JCPenney and GNC have announced permanent store closures across the state after filing for Chapter 11 bankruptcy. Twenty-one major retailers across the nation have filed for bankruptcy in 2020, according to Retail Dive.

Spending a ‘nest egg’

When the state started lifting restrictions in June, some hope for business returned as retailers saw an uptick in both foot traffic and sales.

“Two months of being pent up inside, you open the stores a little and you see a pretty big increase in sales,” Overfelt said.

U.S. retail sales rebounded by 18.2% in May and continued to improve by 7.5% in June as states started to lift restrictions.

“We’re seeing income being spent on more expensive items that people might’ve been holding off on, but being cooped up inside for two months, they have something of a nest egg,” Overfelt said.

David Overfelt

People began spending more due to an increase in disposable income after travel plans were canceled when the COVID-19 pandemic began, Overfelt said.

Allison Fontenot, manager at Fontenot’s Po’Boys, a Cajun and Creole food restaurant in Fulton, said she wasn’t surprised when the restaurant’s sales jumped. The restaurant recently moved to a better location, Fontenot said, and sales are more than what they were before the pandemic began.

“People are sick of being home now, and they’re willing to go out and eat,” she said. “We have so much seating space here that the 6-feet distance wasn’t really a problem.”

But not all restaurants are that fortunate. Restaurants in Missouri lost nearly $1.1 billion in the first two months of the pandemic, according to the National Restaurant Association.

Pivoting to e-commerce

When the shutdown was imposed, Five Pound Apparel, a clothing retailer in Springfield, had to furlough all 11 of its employees except for the store manager. Sales dipped nearly 43%, and the store moved business completely online.

“That was our only way of generating income,” store owner Brina Thomas said. “So we used our Instagram platform, Facebook and our email list to make a quick and easy transition to our website for customers.”

Five Pound Apparel donates five pounds of food to Ozarks Food Harvest for every item it sells. The store already had an online presence and customer base before the pandemic began.

To increase sales, the company created a T-shirt subscription club through which customers can pay $100 for five T-shirts and get one delivered to their door every month, Thomas said. The store later brought back its employees when businesses were allowed to reopen.

But shifting online has not worked for all retailers. Samuel’s Tuxedos and Gifts started door-to-door delivery and shifted online, but it wasn’t able to regain much of the lost revenue, Bushman said.

“It’s a little frustrating when you’re a brick and mortar with some website presence but you’re not being able to sell anything,” Overfelt said.

For some businesses like Linwood Lawns, a bed and breakfast and event space in Lexington, e-commerce isn’t even an option. Don Borgman, who renovated the 10,000-square-foot historic mansion in 2016, runs three businesses: mansion tours and lunches; a wedding and private event business; and the bed and breakfast.

Though Linwood Lawns has hosted a few private events and family guests while taking all the necessary safety precautions, its revenue was down 90% from March through May. The mansion remained empty for the most part during the period, Borgman said.

“My number one concern would be another wave or continuation of the pandemic for an extended period,” Borgman said. “If this (pandemic) resolves itself in a reasonable length of time, we’ll be okay.”

As some retailers have seen business improve, others are still in murky waters, waiting to feel the effects of recovery.

“Probably a good deal of businesses were lucky to even break even during those few months, so that’s why we’re glad to see it turn around.” Overfelt said. “And we just hope that it continues and that we can see a recovery.”

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