Last weekend, I walked a mile along M Street in Washington, D.C., where I live, from the edge of Georgetown to Connecticut Avenue. The roads and sidewalks were pin-drop silent. Movie theaters, salons, fitness centers, and restaurants serving Ethiopian, Japanese, and Indian food were rendered, in eerie sameness, as one long line of darkened windows.
Because the pandemic pauses the present, it forces us to live in the future. The question I asked myself walking east through D.C. is the question so many Americans are all pondering today: Who will emerge intact from the pandemic purgatory, and who will not?
In the past three weeks, I’ve posed a version of that question to more than a dozen business owners, retail analysts, economists, consumer advocates, and commercial-real-estate investors. Their viewpoints coalesce into a coherent, if troubling, story about the future of the American streetscape.
We are entering a new evolutionary stage of retail, in which big companies will get bigger, many mom-and-pop dreams will burst, chains will proliferate and flatten the idiosyncrasies of many neighborhoods, more economic activity will flow into e-commerce, and restaurants will undergo a transformation unlike anything the industry has experienced since Prohibition.
This is a dire forecast, but there is a glimmer of hope. If cities become less desirable in the next few years, they will also become cheaper to live in. In time, more affordable rents could attract more interesting people, ideas, and companies. This may be the cyclical legacy of the coronavirus: suffering, tragedy, and then rebirth. The pandemic will reset our urban equilibrium and, just maybe, create a more robust and resilient American city for the 21st century.
1. The Big Acceleration
To see how the pandemic is already reshaping American retail, you don’t even have to go outside and count storefronts. Your receipts and credit-card statements tell the whole story.
On Thursday, the U.S. Commerce Department reported that retail spending in March collapsed by the largest number on record. Travel spending—including on airlines, hotels, and cruises—is down more than 100 percent, if you include refunds. Department stores and clothing stores are facing an extinction-level event after having experienced years of decline. Pockets of resiliency and even strength include grocery stores and liquor stores, which in March had their best month of growth on record. Home-improvement spending is up as well.
Some of these changes are violent interruptions to modern life, like the closing of gyms and cessation of sit-down restaurant service. But in the long term, COVID-19 probably won’t invent new behaviors and habits out of thin air as much as it will accelerate a number of preexisting trends. (...)
The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers. Neiman Marcus has filed for Chapter 11. More legacy department stores and apparel retailers will almost certainly follow them to bankruptcy court or the corporate graveyard. As these anchor stores shutter, hundreds of malls that were already wobbling in 2019 will be knocked out in 2020.
The pandemic will also likely accelerate the big-business takeover of the economy. In the early innings of this crisis, the most resilient companies include blue-chip retailers like Amazon, Walmart, Dollar General, Costco, and Home Depot, all of whose stock prices are at or near record highs. Meanwhile, most small retailers—like hair salons, cafés, flower shops, and gyms—have less than one month’s cash on hand. One survey of several thousand small businesses, including hotels, theaters, and bars, found that just 30 percent of them expect to survive a lockdown that lasts four months.
Big companies have several advantages over smaller independents in a crisis. They have more cash reserves, better access to capital, and a general counsel’s office to furlough employees in an orderly fashion. Most important, their relationships with government and banks put them at the front of the line for bailouts. (...)
What’s more, by holding on through the next few months, America’s largest companies will be in a stronger position to incorporate millions of workers when the recovery picks up. “In the medium run, it’s probably going to be larger companies and chains doing the hiring,” Arindrajit Dube, an economics professor at the University of Massachusetts at Amherst, told me. In fact, at a time when the economy is shedding several million jobs per week, Amazon, Instacart, Walmart, Dollar General, Walgreens, and Kroger collectively have job postings for more than 700,000 full-time employees or contract workers. In the David-versus-Goliath battle between big and small businesses in America, COVID-19 is, contrary to New York Governor Andrew Cuomo’s recent assessment, no “great equalizer.” It’s a toxin for underdogs and a steroid for many giants.
Because the pandemic pauses the present, it forces us to live in the future. The question I asked myself walking east through D.C. is the question so many Americans are all pondering today: Who will emerge intact from the pandemic purgatory, and who will not?
In the past three weeks, I’ve posed a version of that question to more than a dozen business owners, retail analysts, economists, consumer advocates, and commercial-real-estate investors. Their viewpoints coalesce into a coherent, if troubling, story about the future of the American streetscape.We are entering a new evolutionary stage of retail, in which big companies will get bigger, many mom-and-pop dreams will burst, chains will proliferate and flatten the idiosyncrasies of many neighborhoods, more economic activity will flow into e-commerce, and restaurants will undergo a transformation unlike anything the industry has experienced since Prohibition.
This is a dire forecast, but there is a glimmer of hope. If cities become less desirable in the next few years, they will also become cheaper to live in. In time, more affordable rents could attract more interesting people, ideas, and companies. This may be the cyclical legacy of the coronavirus: suffering, tragedy, and then rebirth. The pandemic will reset our urban equilibrium and, just maybe, create a more robust and resilient American city for the 21st century.
1. The Big Acceleration
To see how the pandemic is already reshaping American retail, you don’t even have to go outside and count storefronts. Your receipts and credit-card statements tell the whole story.
On Thursday, the U.S. Commerce Department reported that retail spending in March collapsed by the largest number on record. Travel spending—including on airlines, hotels, and cruises—is down more than 100 percent, if you include refunds. Department stores and clothing stores are facing an extinction-level event after having experienced years of decline. Pockets of resiliency and even strength include grocery stores and liquor stores, which in March had their best month of growth on record. Home-improvement spending is up as well.
Some of these changes are violent interruptions to modern life, like the closing of gyms and cessation of sit-down restaurant service. But in the long term, COVID-19 probably won’t invent new behaviors and habits out of thin air as much as it will accelerate a number of preexisting trends. (...)
The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers. Neiman Marcus has filed for Chapter 11. More legacy department stores and apparel retailers will almost certainly follow them to bankruptcy court or the corporate graveyard. As these anchor stores shutter, hundreds of malls that were already wobbling in 2019 will be knocked out in 2020.
The pandemic will also likely accelerate the big-business takeover of the economy. In the early innings of this crisis, the most resilient companies include blue-chip retailers like Amazon, Walmart, Dollar General, Costco, and Home Depot, all of whose stock prices are at or near record highs. Meanwhile, most small retailers—like hair salons, cafés, flower shops, and gyms—have less than one month’s cash on hand. One survey of several thousand small businesses, including hotels, theaters, and bars, found that just 30 percent of them expect to survive a lockdown that lasts four months.
Big companies have several advantages over smaller independents in a crisis. They have more cash reserves, better access to capital, and a general counsel’s office to furlough employees in an orderly fashion. Most important, their relationships with government and banks put them at the front of the line for bailouts. (...)
What’s more, by holding on through the next few months, America’s largest companies will be in a stronger position to incorporate millions of workers when the recovery picks up. “In the medium run, it’s probably going to be larger companies and chains doing the hiring,” Arindrajit Dube, an economics professor at the University of Massachusetts at Amherst, told me. In fact, at a time when the economy is shedding several million jobs per week, Amazon, Instacart, Walmart, Dollar General, Walgreens, and Kroger collectively have job postings for more than 700,000 full-time employees or contract workers. In the David-versus-Goliath battle between big and small businesses in America, COVID-19 is, contrary to New York Governor Andrew Cuomo’s recent assessment, no “great equalizer.” It’s a toxin for underdogs and a steroid for many giants.
2. The Flattening of the Amercian City
3. The End of the Golden Age of Restaurants
4. The All-Delivery Economy
5. After the Fire
by Derek Thompson, The Atlantic | Read more:
Image: Joshua Dudley Greer
