The economic crisis in the wake of the pandemic has been very strong at the global level, but multiple governments, instead of mitigating the negative effects, have deepened them. This is the case of the authorities in the city -and all of the state- of New York. The city is seeing how, at a record pace, main-brand stores are generating unemployment and affecting the local economy.
A New York Post report notes that “The Big Apple” saw nearly one in seven branches of nationally recognized chain stores close when the pandemic sent consumers into hiding.
The news comes from the Center for an Urban Future’s State of the Chains annual report that reported a record closing of 1,057 chain stores, including 70 Duane Reades, 49 Starbucks and 22 Papyruses in the last 12 months.
According to the Post, “The 13.3 percent drop breaks all previous records reported by the nonprofit agency since it began tracking the data 13 years ago. Last year, only 3.7 percent of all chains closed, compared to 0.3 percent in 2018,” which highlights the magnitude of the pandemic economic crisis and its deepening as a result of state regulatory measures.
Jonathan Bowles, CEO of State of the Chains, commented on how difficult 2020 has been to keep businesses afloat: “If national chains are shrinking like this, I have to imagine it’s twice as bad for mom and pop stores, which don’t have the same capacity to weather a storm or access financing.
The state is asphyxiating all companies and small businesses
When a few weeks ago, New York state authorities imposed a new curfew, the New York Post published another report explaining the complex situation that New York restaurants are going through: “Big Apple restaurant owners say revenues fell by about 30 percent over the weekend (November 14-15), as they were forced to comply with the governor’s latest efforts to curb the rise in coronavirus cases.”
Those “efforts of the governor” Cuomo were new “health measures”. One was a curfew starting at 10:00 p.m. that sent the city that never sleeps to sleep. This disposition strongly affected the logistics and working hours of food sites throughout the state and produced great losses of income for business owners and workers.
In the case of these big brand stores, it is notorious that the macro situation is impacting them. The closures are not coincidental, but rather causal.
The one suffering the most is Manhattan, which “absorbed the deepest cuts with 520 chain closures – almost half the city’s total – due to the municipality’s dependence on office workers, tourists and wealthy residents who have moved into homes outside the city,” the Post said.
“Midtown East, a strip that covers Rockefeller Center and Fifth Avenue to 60th Street, took the biggest hit with a 23 percent drop in stores,” the article continued.
Fast food stores -which serve, for example, sandwiches- or cafes are among the most affected items, since the former office workers now do home office, so they are lost customers for these restaurants. Subway, for example, lost 30 out of 287 stores. Le Pain Quotidien also suffered, having to pull down the blinds of 14 of its 37 branches.
In the same vein, large franchises such as Starbucks also suffered the impact and closed 49 of 351 stores.
Pharmacies and gyms were others that felt the economic blow. People, for example, began to train more at home and stopped needing to go to the gym. In the case of the pharmacies, the demand on the Internet increased and physical purchases decreased. Duane Reade/Walgreens, for example, suffered the closure of 70 of its 247 points of sale.
And the world of clothing and fashion was also disrupted in New York. For example, Victoria’s Secret closed 9 of its 22 stores, and Skechers closed 8 of 15.
Not everything was negative for NY stores
At least there were some noteworthy situations that should be pointed out. Not all stores closed. At least 40 chains added stores in a group led by Popeyes, a fast food chain that serves fried chicken, and added 11 new restaurants.
And Bowles, the executive director, thinks “there is a possibility that much of the decline in the food sector is only temporary, assuming that large numbers of workers return to their offices when the pandemic ends,” according to the NYP.
At the same time, these store closures could have a positive effect on business owners who aspire to become big, well-known brand franchises.
“We are going to see a new wave of entrepreneurship. From people who were lucky enough not to have businesses at this time, and we may also see some chains come into different parts of the city that weren’t as hard hit as Manhattan,” Bowles said, giving some encouragement to a city that is increasingly hit by business closures, unemployment and the departure of large companies to other states.