The end is near, and it is something of a mixed blessing. Colorado Governor Jared Polis, who ordered a statewide shelter-in-place on March 25th, decided some businesses can now reopen---softly. Beginning April 27th, hair salons, dental offices, dog groomers, tattoo parlors, and a number of other businesses ordered closed because of the coronavirus, can now reopen. But the Governor’s edict does not apply across the board. Some cities and counties, including Denver, are holding off, keeping in place shutdowns for at least a short while longer.
There is a fine point on Polis’ order. Do not look for retailers, for example, to swing open the doors and return to business as usual. They will initially be reopening as curbside only. Only later, as we learn more about the virus’ growth, will stores allow customers inside, but only in limited numbers and with strict enforcement of social distancing policies.
For now, bars and restaurants will not be opening at all, at least in the normal sense. Their business will continue on a ‘take-out’ only basis for the time being. Business is now operating on a ‘new normal.’ And that may mean thinning the herd.
“Many businesses operate on a razor-thin margin,” said University of Denver Daniels School of Business Professor, Dr. Jack Strauss. “They can handle one, two or three weeks,” of being closed, he said. Not all of them can go much longer. Some may not survive. Adding to that, he said, people have gotten used to not spending money. If and when restaurants and bars get the go-ahead to open, they may not resemble the ones that shut down. Social distancing may mean fewer tables and, where costs are concerned, higher food and beverage prices.
Retail had already been down before Covid-19, in fact as much as 8.6 percent according to a recently released government report. A number of retail’s big names, including Payless, a low-cost national shoe chain went under last year. Neiman Marcus, once the gold standard of retail, recently filed bankruptcy. Sears, JC Penny and Macys also reported lagging sales. Each had earlier announced plans to close hundreds of underperforming stores across the country even before Covid-19 hit.
This downsizing comes as no surprise to Dr. Darrin Duber-Smith who calls these legacy retailers, ‘zombies.’ “All these companies were sort of dead,” he said. “They just didn’t admit it.” In retail, explained the Metropolitan State University of Denver Business School professor, a ‘zombie,’ is a company with huge debt and impossible cashflow challenges, “a company that doesn’t have a future but is still operating.”
Retail, said Strauss, “has been suffering for years and that’s going to continue.” Just in the month of January, he said, nationwide retail lost more than 10,000 jobs. But the death knell for retail is not a foregone conclusion, despite the rise in on-line buying by both younger and older consumers. While it may be evolving, retail will always have a place. “For certain things,” he said, “you just need to try them on, you need to see it.”
Restaurants, from mom-and-pop to nuevo-chic, in the age of coronavirus, are in a whole different world. Like families that cannot afford an unexpected $400 expense, most restaurants are also operating on paper-thin margins. Being closed is tough and carry-out is not paying the bills. There is now another variable that will greet them when they are allowed to reopen, said Dubin-Smith. “Availability of labor,” has suddenly become a new reality. Everyone up and down the restaurant hierarchy, from wait staff to kitchen workers, may now be able to make more in unemployment in the government’s stimulus package than by going back to work.
There is also the lingering fear for workers---not only in food service but in scores of jobs---about going back to a job where they could contract Covid-19. “People don’t want to put themselves in harm’s way,” said Dubin-Smith.
Polis decision to reopen the state is not uniformly embraced. Denver Mayor Michael Hancock has moved Denver’s shelter at home mandate through May 8th in order to boost testing and contact tracing capabilities. In making the announcement last week, Hancock also said before he gives the go ahead to resume some degree or normalcy, he wants to hammer together more guidance for businesses. Adams, Arapahoe, Boulder, Broomfield and Jefferson counties are also not ready to reopen.
Denver leads the state in numbers of coronavirus victims and deaths. Over the weekend in a CNN interview with Jake Tapper on “State of the Union,” Polis was asked if opening things back up while the curve of the virus has still not flattened is a good idea. “We always wish ... that I had next week’s information and next month’s information available to me today,” Polis said. “That’s not the world we live in. We have to make the best informed decisions, based on data and science, with the information we have.”
While the numbers remain ever-changing, Colorado has recorded more than 13,500 cases of Covid-19 with nearly 700 deaths. Denver leads the state in both counts with Arapahoe and Weld County following.