It’s not a contest, but the coronavirus will have its winners and losers.
Business interruption insurance varies greatly by policy, but right about now you can bet there are plenty who wish they had read the fine print.
It’s pretty clear that independent restaurants are going to be on the loser list. Barbers and hairstylists are going to be on that list, too. They’re specifically named as non-essential businesses, so in Edmond and elsewhere they were forced to close by 5 p.m. Wednesday for at least 21 days. According to salary.com, barbers earn between $25,161 and $37,639. Three weeks or more of no revenue is going to hurt. A lot.
Few entertainment venues — movie theaters, bowling alleys and such — are independently owned but the ones that are, such as Kickingbird Cinema, will get pinched hard. The same goes for ice rinks, but what of the figure skating coaches who work as independent contractors and are prevented from giving lessons?
The City of Edmond is going to feel it, too, and one way or another that puts all Edmond residents on the loser list as somewhere, somehow, there will be some reduction of city services. Like every city in Oklahoma, Edmond depends on sales tax revenue to pay for everything from police and fire services to roads and parks. If retail spending grinds to a halt, so does most of the city’s revenue stream. And where retail is concerned, this may be the first swell of a sea change in commerce.
This week, Quail Springs national tenants including Macy’s and the Gap told lawmakers they are unlikely to remain solvent if they don’t get a big dose of government help. Take Macy’s, Gap, Old Navy, Pier 1, Ann Taylor, JC Penney, and Bed, Bath and Beyond out of the mix and any city accustomed to that money is going to have to tighten the belt a notch.
Marketing research firm Coresight Group reported that U.S. store closures in 2019 set an all-time record with about 9,300 closings. Throw a three-week mandatory shutdown into the mix and 2020 will dwarf that, pushing some of the teetering retailers off the ledge, out of their leases, and off the tax roll. That lowered demand for square footage in retail centers would then drive down lease rates, slowing development because the cap rates are less attractive.
Airlines, ouch. Amusement parks, eek. Hotels: See “Airlines.”
Who wins? Amazon. And a few other well-established online retailers that are selling even more products to bored shelter-in-place homestayers. Streaming services win too; if you were thinking about dropping cable (or at least HBO) to reduce your gag-inducing monthly telecom bill, you probably hit the pause button when you found out you were going to be stuck at home. Netflix has already agreed to reduce its streaming quality in Europe to avoid crashing the Internet.
Some hospitals are winning. Consider the one that treated Danni Askini, an uninsured Bostonian, who received a $34,927.43 bill for coronavirus testing and treatment.
Four U.S. senators, including Oklahoma’s Jim Inhofe, appear to have benefitted greatly by some well-timed stock dumps. They sold millions worth after the Senate Intelligence Committee was apprised of the forthcoming pandemic but before the public knew. All four have denied insider trading accusations, but nonetheless benefitted from the fortuitous trades.
The other winner: Diaper makers. Starting in December.
© Ted Streuli 2020