COVID-19 — One Year Later: Businesses adapt to pandemic pressures

To say businesses have faced some challenges during the yearlong COVID-19 pandemic would be a gross understatement.

With the possible exception of the Great Depression of the 1920s, business experts and economists generally agree (and many business owners know) there has never been a more tumultuous period for the nation's businesses than the past 12 months.

Stay-at-home orders and lockdowns aimed at shutting down the virus also shut down thousands of businesses — either temporarily or permanently — and cost millions of Americans their jobs.

And in Cape Girardeau County, the number of monthly applications for first-time unemployment benefits ballooned to more than 5,000 — 10 times the number of filings in a typical month — and the county's unemployment rate hit 9.5% in April, a 217% jump from the county's 3% jobless rate in late 2019.

Booming to shuttering overnight

"The year 2020 began with near full employment in Missouri with a booming economy," said Delores Rose, director of strategic communications with the Missouri Department of Labor and Industrial Relations (DOLIR). "Seemingly overnight, Missouri went from a booming economy to schools and businesses shuttering due to the pandemic."

The state's unemployment rate hit double digits in April, peaking at 10.2%, while the nation's jobless percentage mushroomed from 4.4% a year ago this month to 14.8% in April as much of the U.S. economy shut down.

In the months since then, the state, national and local economies have rebounded to a degree. However, the number of people in the nation's workforce is still significantly smaller than it was at the beginning of 2020 and many economists say it could take years before the economy gets back to "normal" ... whatever that is.

Tempest Southall of Cape Girardeau shops during a drive-through-only version of the Cape Riverfront Market on May 2 at Century Casino Cape Girardeau in downtown Cape Girardeau.Southeast Missourian file

Still, Rose and others agree that from a business perspective, there have been some "positive" aspects to the pandemic.

"Little did any of us know (in early 2020) that the preparations made by the Missouri Department of Labor and Industrial Relations' divisions in 2019 would be instrumental in steering DOLIR through the COVID-19 tumult," Rose said as she reflected on the yearlong (and ongoing) pandemic.

She explained how the labor department started "virtual" safety and health consultations for businesses to help them follow safety guidelines established by the federal government and created a shared-work program to allow employers to retain their skilled workforce while bringing employees back to work on a reduced schedule.

The labor department's workers' compensation division also switched to online hearings, assuring workers who had been injured on the job could receive benefits to help them return to work as quickly as possible.

A change accelerator

Missouri Department of Economic Development regional manager Shad Burner, formerly a vice president with the Cape Girardeau Area Chamber of Commerce, agreed with Rose that in some ways the pandemic has brought about changes that have been good for business.

"COVID-19 has been a change accelerator for our businesses and our economy," he said. "There are many examples of businesses that have been discussing remote workforces for years, but managed to move to fully remote within a matter of days (when the pandemic started)."

By and large, Burner said, the pandemic has brought about changes in the way people go about their daily routines that otherwise would have taken years.

"We all have family and friends who never shopped online before and now have packages arriving on their doorsteps daily," he said. "Many of the long-term changes we will see (because of coronavirus) were already trends in the economy. COVID-19 just forced our hand."

The pandemic, Burner observed, has left "an indelible mark" on the nation's economy.

"Specifically in Missouri, we've seen a shift in consumer spending that has not yet been corrected," he said. "At the peak (of the pandemic), restaurant and hotel spending was down more than 60%. Conversely, all retail was up more than 20% due primarily to an increase in grocery spending and, of course, online shopping."

Consumer spending in January, he said, was "relatively level," up 1.6% compared January 2020, two months before the pandemic began.

"In Southeast Missouri in particular, many communities experienced an overall increase in retail sales throughout the pandemic," he said.

That increase was notable in Cape Girardeau County where the county's half-cent sales tax set a record in 2020, generating nearly $7.8 million during the year based on taxable sales of more than $1.5 billion. The county's use tax on out-of-state purchases and online commerce also fed about $1.8 million into the county's treasury last year, nearly 40% more than it did in 2019.

Generally speaking, Burner said businesses throughout Southeast Missouri "have been incredibly resilient" during the pandemic.

"Many people saw their favorite restaurant quickly pivot to add smoother takeout or delivery options, but what very few saw was activity happening behind the scenes," he said. "For instance, several Southeast Missouri manufacturers quickly instituted distancing in their facilities and created workforce groups (that) allowed for a limited quarantine in the event a case occurred at their facility."

Accommodating consumer demands

Schnucks in Cape Girardeau is an example of a grocery business that fared well during the pandemic.

"Like so many other businesses, Schnucks was forced to adapt quickly to an immediate influx of business as the pandemic hit while also keeping the health and safety of our customers and teammates at the forefront," said Paul Simon, head of corporate communications for the St. Louis-based grocery chain. "At the onset, it seemed like everyday was a holiday and snow scare wrapped together as we tried to keep up with customer demand."

Simon believes the retail industry overall, and Schnucks specifically, will be better prepared for similar situations in the future.

"I think the most important lesson learned was to be flexible," he said.

The pandemic forced grocery stores, restaurants and other retail businesses to emphasize their online ordering and curbside pickup options. Other business sectors, including the banking and financial services industry, also adapted.

"At First Midwest Bank, we temporarily closed our lobby to customer traffic, but only briefly last year after the initial outbreak," said Kevin Greaser, First Midwest community bank president. "While lobby traffic declined, our banking services experienced a significant increase due to technology with mobile banking, online banking and other features such as DocuSign to execute documents."

Face-to-face meetings became few and far between. "WebEx and Zoom meetings became the norm," he said.

"Employees have been required to maintain safe distances and masks are worn by staff as well. At times, we have had a couple of team members working from home in order to reduce exposure," Greaser continued. "But overall, we learned we can continue to provide high-quality services in spite of the challenges of the pandemic."

'Fast forward' 5 to 10 years

Jay Knudtson, executive vice president and chief lending officer at First Missouri State Bank, said the pandemic has, in some ways, been good for the financial services sector.

"As a great banker friend of mine said in the early stages of the pandemic, COVID-19 has become the great 'accelerator' for the banking industry," he said. "It has fast forwarded our industry five to 10 years in the ways we do business and introduced a whole new platform of (service) delivery for both our associates and customers."

From his perspective, Knudtson said the federal government's Paycheck Protection Program (PPP) has been a "crucial" tool that helped thousands of businesses — and their employees — survive the pandemic's financial challenges.

"We need to look no further than the PPP loans as being the single biggest catalyst and life line for all small businesses during these unprecedented times," he said. "While not perfect, our elected leaders should be congratulated for providing this financial relief to all businesses over the course of the last 12 months."

PPP, Knudtson said, "was nothing short of brilliant."

At the Cape Girardeau Convention and Visitors Bureau, executive director Brenda Newbern said it will take a while to overcome lost revenue caused by canceled events and hotel rooms during the pandemic's early stages.

"The tourism industry was drastically impacted by the shutdown of businesses and travel," she said. "At the onset, we lost events, festivals and tournaments (and) since the budget for the convention and visitors bureau is from the hotel/motel tax, that was a direct hit for us."

It took several months, Newbern said, before events gradually returned to the calendar. For example, youth sports tournaments were booked once appropriate distancing protocols and other safety guidelines were enacted.

"We now have an even larger target market to focus on and prospect," she said.

Chamber perspectives

Presidents of the Cape Girardeau and Jackson chambers of commerce, John Mehner and Brian Gerau, respectively, said most of their members — both individuals and businesses — have been affected to one degree or another by COVID-19.

"Many businesses were moved to do more with less. Less staff, less office space, less revenue resources," Gerau said. "I observed resilience as well and a dedication to the betterment of the community as a whole and solidarity as I've never seen before. It was moving and inspiring."

Some businesses, such as home improvement stores, grocery stores and certain retail outlets, fared well during the pandemic.

"You can't really make a blanket statement that says 'This really killed everybody,' or 'This benefited everybody.' There are truly sectors and people all over the scale on this," Mehner said.

Both Mehner and Gerau said their chambers have been able to collaborate and provide their memberships with the most accurate and up-to-date information possible throughout the pandemic.

"Our responsibility was to become an information hub to the community," Gerau said. "Mandates, regulations and updates were a daily occurrence and it was our job to educate the (business) community on those changes."

The chambers "really enhanced their working relationships" Mehner added. "Brian and I and our staffs have spent more time via email and telephone conversations in the last year than we had prior to that and it was all toward figuring out how to best serve our members through all of this, and that was a positive."

Overall, both men believe the local business community and regional economy will eventually be stronger than they were before the COVID-19 outbreak thanks to the lessons learned and adaptability skills businesses acquired during the pandemic.

"We live in an amazing area," Mehner said. "People did the best they could in figuring out how to deal with the situation and how to deal with the cards they were dealt. I think our area handled everything as well as an area could. We just have great people."

Do you want more business news? Check out B Magazine, and the B Magazine email newsletter. Visit www.semissourian.com/newsletters to find out more.