Retail Industry and COVID: What is The Jobs Outlook for Small Businesses?

Retail is a huge sector of the Washington, D.C. metro area's economy, and small businesses play an important role. According to the D.C. Policy Center, 69.11 percent of D.C.-based businesses have fewer than five employees in the area. Companies in the area with less than 50 employees account for "almost 60 percent" of employees in retail-trade.

Retail industry and small businessesEvery area of retail—for better or worse—was impacted during COVID-19. When stay-at-home mandates, capacity, and social distancing measures were put into place in the spring of 2020, it sent the industry into chaos.

Let’s take a look at how small retailers in the D.C. area performed before and during COVID-19, along with what they'll likely look like after the pandemic.

Before COVID-19

Before the pandemic arrived in the DMV in March 2020, aside from food and beverage stores, general merchandising stores were the second-largest employer in the retail sector. Thanks to population and income growth, along with tourism, demand had grown. Jobs were plentiful.

New construction throughout the DMV also consistently expanded merchandising opportunities, especially since retail projects and mixed-use development projects have been steady since the recession ended. In the D.C. metro area, shopping center vacancy was fifth lowest in the U.S. at 4.8 percent. Furthermore, construction for commercial real estate throughout D.C., Virginia, and Maryland was ongoing. All of which broadened job opportunities.

During the pandemic

As the pandemic hit, retailers deemed "essential" were allowed to operate in-person, but most did so with shorter hours, fewer employees, and other limitations in place. As a result, many employees were either laid off or had hours drastically cut. Retailers not deemed "essential" had to shutter their doors. As a result, many retailers in the DMV had little choice but to send employees home until officials said they could reopen. Small retailers couldn't follow the lead of virtual retail giants by shifting online since most were not equipped with the cash, tech, and manpower necessary to keep operations going. While a few retailers did manage to pivot by offering curbside or traditional delivery, this wasn't easy for most when operating with a skeleton staff.

Over time, small retailers were slowly able to reopen with specified guidelines in place, but many opened without full job recovery. Since D.C.-area retailers heavily rely on local workers and tourists, with no one downtown, they had little choice but to cut back on staffing. Other small retailers, like their larger counterparts, suffered supply chain issues and had no products to sell. 

According to the U.S. Census Bureau's Small Business Pulse Survey, most D.C.-based companies feel the pandemic has had a "large negative effect" on businesses. The week of May 10, 2020, 54.3 percent of small businesses in D.C. felt this way. But in July 2021 32.8 percent still responded the same way. Both percentages were roughly 7 percent higher than the national average, indicating many area businesses are still apprehensive.

Looking toward the future

Recovery for small retailers is likely going to be tough, especially in the short term while pandemic conditions fluctuate. Looking toward the long-term, many may struggle as increased numbers of local workers transition to remote status, meaning people are less likely to spend lunch hours or other times shopping and socializing downtown. State of the U.S. and local economies post-pandemic might also impact small retailers, depending on consumer willingness and/or ability to spend. However, it's not all doom and gloom.

  • Southeast D.C. is booming. The latest mixed-use development project broke ground in June 2021. Upon completion, it'll add 156,000 square feet of retail. Other areas of D.C., Maryland, and Virginia are also rapidly expanding with similar construction projects.
  • New retailers are opening and filling empty storefronts. Many acknowledge the difficulties ahead until normalcy returns, but for now, are going forward full-speed.
  • Many consumers are highly inclined to buy local and shop nearby small businesses when they are able to spend, and employers need staffing.

These initiatives, and others, will increase jobs. They might not be brought back as instantaneously as they were lost, but over time should see recovery. Required skillsets probably won't change much, but it's given employees are likely to use technology in ways they hadn't before to accommodate our "new normal."

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