This Hardware Store Shows How Essential Businesses Can Thrive in the Coronavirus Pandemic
by: Richard Lawson | CoStar News | April 8, 2020
On a recent weekday afternoon, one customer after another streams in and out of a family-owned Ace Hardware in the Atlanta suburb of Johns Creek, undeterred by the Georgia governor’s stay-at-home order to help slow the coronavirus’ spread.
Business is brisk. Family members scurry around trying to help customers. They're also fielding phone calls for orders because the store makes deliveries. And with people forced to stay home, they're focusing on the jobs that need to be done around the house.
“We were up $100,000 last month” in sales over the year-earlier March and this month has a strong start, Ralph Lukowiak, the store’s owner, says from behind a desk in his small office.
Hardware stores like his typically fall into the essential category and don’t have to close because they sell plumbing, electrical, lumber and other supplies that are deemed necessary during a national emergency.
Lukowiak’s small business is booming while many others around the country, not deemed essential, fear they may not survive temporarily closing until the health crisis passes.
For those businesses designated as essential, from grocers to hardware stores to pharmacies, sales can pick up during the coronavirus, while many businesses not considered vital are shut down and concerned they won't recover. A new survey of 1,221 small business owners in the U.S. from online loan company LendingTree showed that 71% of them fear they won’t recover from the steep economic downturn. It didn't say how many surveyed were considered essential.
Many small businesses don’t fall into the essential category: Nail salons, barbers, restaurants unless they do to-go orders, bars, gyms and more are considered nonessential and have closed. Others that can stay open may not be generating enough revenue to stay afloat.
Last week, the number of U.S. jobless claims increased to nearly 10 million. Many of those jobs represent small businesses.
The LendingTree survey shows that 47% have taken on more debt to help survive the pandemic. Eight out of 10, however, have no idea where to get emergency funding, and 64% are having trouble getting approved for financing.
To help small businesses survive, the $2 trillion federal stimulus package earmarked about $350 billion for a loan program. However, the program may not be sufficient. Dubbed the Paycheck Protection Program, small businesses can get forgivable loans to cover eight weeks of payroll and other expenses.
Small businesses have flooded banks with applications for the first-come, first-serve loans.
Big banks such as Bank of America initially favored businesses that had borrowed from the bank previously, the Wall Street Journal reports. But it reversed course quickly when the bank was inundated with complaints.
Another big bank, Wells Fargo, said it had reached its capacity already, according to the Wall Street Journal.
Meanwhile, Lukowiak with the Ace Hardware outside Atlanta doesn’t need the program. Over the past weekend, his store extended a streak of steady strong business.
People cooped up all week working from home ventured out to Ace Hardware for relief from cabin fever, perhaps to take on long-delayed chores around the house.
Lukowiak’s son Richard, the store’s general manager, says customers were buying “everything.” The store sells more than just building supplies, with grills being a big seller.
“I have a guy on hold who is buying 700 pounds of mulch,” Richard Lukowiak says.
They shortened the store hours like grocery chains and other retailers, doing so before big-box hardware stores like Atlanta-based Home Depot and Mooresville, North Carolina-based Lowe’s Home Improvement shortened their hours.
Those chains announced April 1 that they have temporarily shortened store hours, put limits on the number of customers in stores at one time and took other steps to ensure social distancing in the stores.
The boon for essential businesses may not last through the health crisis, however.
While the essential businesses survive stay-at-home orders, they probably will be “impacted by spending reductions as incomes decline generally for some time," says Jim Diffley, chief economist for analytics firm IHS Markit, in an email.