GRAND RAPIDS, Mich. (WOOD) — For many small businesses, the pandemic has become a story of survival. While many have not made it, experts say some key measures have allowed more than expected to keep their doors open.
For Field and Fire, a local farm-to-table bakery and cafe with two locations, it hasn’t been easy. But despite a two-month shut down in the early days of the pandemic, owner Julie Kibler said both locations continue to hold their own.
“Once we had the PPP loan come in, we were able to open back up,” Kibler said. “We were lucky enough that all but three of our staff members came back to work for us.”
Consultant Michael Berne, who advises communities across the country on keeping and growing business, said that despite shutdowns and other pandemic restrictions, there has been less damage done than expected.
“It’s been painful, no doubt. Cataclysmic? Not sure we’re there yet,” Berne said.
THE BUSINESSES THAT DIDN’T MAKE IT
Fifteen businesses in downtown Grand Rapids have permanently closed in the past eight months, according to a new COVID-19 impact analysis by Downtown Grand Rapids Inc. That’s up 50% compared to the same period a year prior, the organization says.
DGRI says the following downtown businesses closed since May:
- Zoey Ashwood Fine Art (May)
- Charley’s Crab (May 15)
- Grand Central Market (June 1)
- The Wheelhouse (June 4)
- Madcap Downtown Market café
- UICA (June 17)
- Dog Story Theatre (June 27)
- Bend Gallery (July)
- Perrigo Printing (July 1)
- Social Kitchen (July 7)
- Gina’s Boutique (Aug. 8)
- Sin Republic Salon (Aug. 28)
- GRAM Store (Aug. 30)
- Craft Beer Cellar (Sept. 26)
- The Dog Pit (Dec. 19)
However, downtown Grand Rapids added 19 businesses in the last six months of the year, including Morning Belle, Art Caribbean Fusion Cuisine, Alt City Beverage, Tupelo Honey, GRNoir, and The Marketplace Powered by Pack Elephant.
A consultant hired to create a blueprint for the future of downtown long before the pandemic started said national numbers are also better than early predictions.
RECIPE FOR SURVIVAL
Berne, the president of MJB Consulting, said the way businesses are adapting combined with government grants, federal loans and community fundraisers “has actually mitigated some of the carnage that we expected to see.”
He says the basic formula for survival tended to include the following:
- Selling outside
- Other revenue sources besides foot traffic
- Adapting what is sold to make the business essential
- “Critical” relief measures including the Payment Protection Program
- Community goodwill, including fundraising through GoFundMe
- Cutting business expenses
- Receptive landlords willing to work with cash-strapped businesses
- Eviction moratoriums
“We had several people come in and buy large gift certificates. When we first closed down, we had a GoFundMe page and our supporters donated quite a bit of money,” Kibler, the Field and Fire owner, said.
Nationally, a total of 8,721 retail businesses closed permanently last year, according to Coresight Research. Berne said that’s actually fewer closures than 2019, when 9,832 businesses shut down. It’s also well below initial predictions that the pandemic would shutter 20,000 to 25,000 stores.
“All of this is not to minimize what happened or how difficult this year was for businesses, but to say that it hasn’t been as much of an existential event for the retail industry as was predicted back in March and April,” Bern explained to Grand Rapids’ Downtown Development Authority Wednesday.
The real estate consultant says while the country is “obviously starting from a low bar,” there are reasons to expect this year will be better than 2020 for businesses, including more stimulus funding, pent-up demand and mass vaccinations for COVID-19.
TRENDS TO BUILD ON
While Berne says COVID-19 delivered “a real gut punch” to the downtown model, Grand Rapids’ downtown is no stranger to change.
“Downtowns are not the downtowns that they were and they’re not going to be anytime soon,” said Berne.
While shopping used to be the main draw for many downtowns decades ago, Berne said cities should treat downtown stores now more like an amenity.
However, he said Grand Rapids could be one of the few places that could successfully buck that trend through its business incubators and public-private partnerships in development.
“So much of the real estate is in relatively few hands and what I sense is a real sort of interest among some major stakeholders in making downtown retail work,” he said.
Berne told the DDA that the size of downtown Grand Rapids makes walking the entire area less likely, especially during winter. He said the answer to drawing more people downtown may lie in “clustering” similar businesses that will collaborate with each other. Berne said while the market will decide where clustering should happen, one spot drew more of his attention.
“Frankly the place where I imagine most retail tenants want to be is Bridge Street not only because of momentum but also because of the Bridge Street Market anchor. Grocery anchors are golden these days, right? Those are guaranteed foot traffic generators,” said Berne, though he warned the rents may be too high for sustainable shops.
WHO TO WATCH
With millennials in “family formation mode,” Berne says the focus for the future should be on Generation Z’s spending habits. Right now, interest in home cooking is leading to a “huge increase” in kitchen purchases, according to Berne.
“We will see if that sticks,” he said.
Another emerging trend: “pretty hip food halls” in retail centers, Berne said.