America Closed: Thousands Of Stores, Resorts, Theaters Shut Down

Mar 16, 2020
Originally published on March 18, 2020 7:53 am

In an unprecedented attempt to contain the coronavirus outbreak, thousands of stores and other businesses are closing their doors to customers.

Apple, Nike, Patagonia and scores of other retailers are closing thousands of stores across the country. In the nation's largest cities — New York City, Chicago, Los Angeles and San Francisco — officials said they were ordering restaurants, bars, and cinemas to close. Restaurants will be permitted to do takeout business.

Grocery stores and other retailers that sell food or basic supplies are staying open while limiting hours to allow for cleaning and restocking of store shelves.

But outside of that, American business of all kinds are closing their doors to customers.

Chairlifts and gondolas have stopped running as dozens of ski resorts in Colorado, Utah, Vermont and elsewhere have shut down. Starbucks is removing chairs from thousands of locations and only doing to-go business. And McDonald's is closing the dining rooms in thousands of company-owned stores and only serving customers at drive-thru windows.

Gyms in some states are being ordered to close as officials decide that rooms full of people working out and breathing hard isn't an acceptable risk. Casinos are turning out the lights on their slot machines and card tables. The water is not running down the slides at indoor water parks in California, Wisconsin and Pennsylvania.

"We will be closing all of our retail stores outside of Greater China until March 27," Apple's CEO Tim Cook said in a statement. Stores in China are re-opening as that country says it has contained the outbreak. Cook said working with China has helped Apple chart a course for its response in the rest of the world.

"One of those lessons is that the most effective way to minimize risk of the virus's transmission is to reduce density and maximize social distance," he said.

Many small businesses are struggling with the decision of whether to close too.

"It's been particularly hard as a small business owner to know what to do because I feel like I'm the one making the decisions for myself and my family and my clientele," says Alanna Quan, who runs a hairdressing business outside of Los Angeles.

Alanna Quan closed her hair salon outside of Los Angeles. "It's a huge decision because it's half of our income for our family," she says. Her husband works for a small business as well. "So we're very concerned about his job, his hours," Quan says.
Courtesy of Alanna Quan

"Honestly, a lot of my clientele decided for me," she says. "They all started pushing their appointments back. So by the time the vast majority of my clients who were scheduled for March and early April pushed back to late April and May, I decided to close the salon."

Small businesses are particularly vulnerable — many don't have enough cash on hand to survive an extended shutdown. And if a lot of small businesses get hurt, that can be very damaging for the overall economy.

"Half the people who work in this country work for or own a small business," says Karen Mills, who headed the Small Business Administration after the financial crisis. "In 2009, when I took office in the first quarter, we lost 1.8 million small business jobs."

Many smaller companies can't survive an extended shutdown without help, she says.

"Their average cash buffer is about 27 days, and for restaurants and some Main Street businesses, it's even less," she says. So she says if you shut the door, you, "turn off the spigot of all the cash coming in and you're still paying employees and other expenses like rent and your loan payment, then pretty soon you run out of money and it's not a very long time frame."

Mills says Congress has already approved some emergency SBA loans for small businesses and that's good. But she says more help is needed and policymakers must have a robust response. "We'll have a really devastating effect on small businesses that could have a lasting effect on the economy," Mills says.

In one sign of just how suddenly some companies decided to shut down operations, Matt Denner, who lives in Des Moines, said he called on Thursday night to try to cancel a cruise he and his girlfriend were set to sail on starting Saturday.

"Royal Caribbean told us that we could not cancel it," he says, because they had just missed the deadline to cancel up to 48 hours in advance and still get a refund. So Friday they flew to Puerto Rico, but when they got there they were told the cruise line had cancelled all trips for the next month.

Denner says the cruise lines and other tourism companies "just were completely unprepared."

The U.S. Chamber of Commerce Monday called upon lawmakers for more action.

"We need big, bold policy moves now to ensure businesses continue to function, meet payroll, and keep American workers employed," said Tom Donohue, the Chamber's CEO. "We must not let this public health emergency leave a lasting, permanent impact on our economy, small businesses, and American workers."

The U.S. Chamber is proposing to suspend some rules and regulations to make it easier and faster for small businesses to be able to get the emergency loans some will need to survive.

And it's asking the government to cancel payroll tax payments from March through April so business can keep that money.

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So a lot of Main Street businesses are in big trouble because of this coronavirus outbreak, and they're going to need help from the government very quickly. And we have more from NPR's Chris Arnold.

CHRIS ARNOLD, BYLINE: Many restaurants, local gyms and other businesses have been ordered to close their doors to customers. Others are having to decide for themselves. Alanna Quan runs a hair salon outside of Los Angeles. With most of her clients canceling, she's closing, too, for now.

ALANNA QUAN: It's a huge decision because it's half of our income for our family. And my husband works for a small business as well, so we're very concerned about his job, his hours and their sales revenue, which I heard is down 70%.

ARNOLD: And if a lot of small businesses get hurt or go under, that could be very damaging for the overall economy.

KAREN MILLS: Half the people who work in this country work or own a small business.

ARNOLD: That's Karen Mills, who headed the Small Business Administration, or SBA, after the financial crisis. Mills says if you look at businesses with fewer than 500 employees, half of them have less than a month of cash reserves. Many smaller Main Street-style businesses have just a couple of weeks' worth of cash.

MILLS: So if you shut the door and you're still paying employees and rent and your loan payment, then pretty soon, you run out of money.

ARNOLD: So she says a major focus of the government has to be getting cash to businesses that need it quickly so they don't go under. She says emergency SBA economic injury loans are one way to help. They have low interest rates, she says, and long payback terms.

MILLS: That should put cash in your hands quickly. We used them very effectively in the Gulf during the BP oil spill because we had shrimp boats - they couldn't fish because the Gulf was full of oil.

ARNOLD: Of course, we're talking about a much wider impact now than shrimp boats in the Gulf. Congress has already approved some money for these emergency loans. Mills says more will be needed, and it's likely that small businesses will need help beyond what the SBA can do because so many could be in trouble. Some experts are calling on the Treasury Department and the Federal Reserve to work with thousands of banks around the country to issue emergency loans. And the clock is ticking.

ERIC GROVES: Last week, we started to poll business owners in terms of the impact on their businesses.

ARNOLD: Eric Groves is a co-founder of Alignable. It's a networking site with 4 million small-business owners as members. And he says nearly everybody says that their business is getting hurt.

GROVES: In just over the last couple of days, that number has increased. Up to over 80% are feeling that impact on their business.

CALVERT THOMPSON: Today, actually, we had zero clients.

ARNOLD: Calvert Thompson runs a massage and spa business in Herndon, Va.

THOMPSON: We have 13 full-time W-2 employees, and definitely trying to figure out what I can do to help keep all of our heads above water during this.

ARNOLD: Thompson says she is trying to get a $40,000 SBA loan, though she's not sure what the terms will be, and she says the process has been confusing. She doesn't want to borrow more than she can pay back, but she also needs to pay rent on her location and her equipment. And she wants to help her employees who get paid by commission.

THOMPSON: To be able to supplement them so that they can stay in their apartments, just sort of dole it out.

ARNOLD: But Thompson says some money needs to start reaching businesses like hers very soon.

THOMPSON: This is my entire life's work. I've been in business and really successful for going on 15 years now. And in a matter of - really, in a matter of weeks, we could reach a critical point.

ARNOLD: Chris Arnold, NPR News.

(SOUNDBITE OF MAN MOUNTAIN'S "TO BE MADE AS NEW") Transcript provided by NPR, Copyright NPR.