People think of New York as a city of skyscrapers and high finance, but it’s the small, independent businesses that make the city run.
New York has more small, family-run enterprises than just about anywhere else in the country – some 230,000 entities that employ nearly half the city’s private workforce. Visitors who come to the city for the arts, finance, and glitz don’t see that the true pulp of New York comes from everyday butchers, bakers, dog groomers, jewelers, hardware stores, restaurants, and specialty stores that shape neighborhoods. Sometimes with just two or three workers, these merchants make the city feel more like a small town than somewhere that’s home to more than 8.3 million people.
They’re neighborhood fixtures, and too many are in dire straits because of the pandemic.
In terms of diagnoses and deaths, no city has suffered more than New York, which has had more COVID-19 cases than any foreign country except Spain, Italy, and the United Kingdom. With the state in its seventh week of full lockdown, temporarily shuttered businesses are at obvious risk, but so are shops that are operating but not covering costs.
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For businesses deemed essential – grocers, restaurants, liquor stores, laundromats – the first few days after New York Gov. Andrew Cuomo’s shutdown announcement were like building an airplane as they flew it. Soon, they had a system. All instituted stricter cleaning protocols. Most businesses cut hours; some limited the number of people in a store. A few retailers installed huge sneeze guards at cash registers and mandated that customers wear masks before it became mandatory.
Even in the best times, it’s hard to be a small business in New York. The city’s minimum wage is among the nation’s highest, annual rent can run into six digits, and taxes pack a wallop. Then there is insurance and red tape, as well as tough competition from online retailers and national chains. Unlike unions or big corporations with teams of lobbyists and lawyers, mom and pops are largely on their own. When the city shut down, their hard job became pretty near impossible.
There’s more at stake than the livelihoods of individual entrepreneurs. Small businesses give New York City its character and vibrancy, says Jonathan Bowles, executive director of the Center for an Urban Future, an independent think tank.
“It’s a diverse mix of shopping that you can’t find anywhere else in the country and adds so much to street life in New York City,” he says. “I don’t think people come to New York [to see] chain stores and chain restaurants.”
Indeed, New Yorkers themselves take it personally if Victoria’s Secret replaces Viola’s Smart Shop. But the challenges here also symbolize a wider one nationwide. Whether in Chicago, Dallas, or New Orleans, no one wants a neighbor going bust. Yet that’s precisely the risk as the COVID-19 crisis leaves millions of U.S. small businesses shuttered or drawing a fraction of their ordinary revenue.
It’s uncertain how many of New York’s small businesses are open now, or how many of their almost 3 million workers are unemployed. Since layoffs began in March, almost 593,000 city residents had filed for unemployment by April 25, according to the state Department of Labor. More people couldn’t register because the system kept crashing.
Sales off 60%
Vito Mazzarino’s family has owned S&V General Supply Co. on the Upper East Side of Manhattan since 1974. The store recently reopened. It had closed in March, partly due to so much uncertainty but also because its shelves had been emptied of protective wear like N95 masks. Virus-related gear was all people wanted, and the store couldn’t get more. By the time S&V lifted its metal gates to customers, it couldn’t get American-made N95s. Chinese-made KN95 masks, which Mr. Mazzarino estimates would’ve cost him $2 or $3 each before the novel coronavirus, are now going for $9. He raised prices to keep the same profit margins.
Located on First Avenue, S&V’s customers are primarily handymen from the 15- and 20-story apartment buildings surrounding it. With all nonemergency work on hold, demand for S&V’s lumber, paint, and plumbing and electrical equipment is on hold, too. S&V’s sales are off 60%. Mr. Mazzarino says he got none of the initial $349 billion federal aid package but is prepping for round two. Though his family owns the building, current sales aren’t covering the mortgage, equipment, supplies, or staff.
“This is a major blow to the economy. It’s going to trickle down to every aspect of it. The big concern is how long it goes on. I hope it ends soon,” says Mr. Mazzarino, a lifelong New Yorker, “or else we’re all going to be broke.”
Manhattan is characterized as a land of big spenders, but this area of the borough represents a dollop of middle class (relatively speaking). Most businesses are homegrown – restaurants, nail salons, clothing boutiques, barbers, grocers, housewares stores, and one that sells carpeting. The Starbucks and nearby 7-Eleven also have their loyalists. Pre-coronavirus, pedestrians were out at every hour, and traffic was backed up. Seven weeks into the state shutdown, just over half of the local stores were open – 26 out of 49.
Disinfecting the inventory
Just up First Avenue from S&V is A Matter of Health, which has been selling organic produce, cereal, and cleaners since 1989. Customers must wear gloves, and only two people are allowed in the narrow-aisled store at a time. Shopping baskets are washed after every purchase. Each night, workers swab the floor with bleach water and try to disinfect the inventory.
“Customers really appreciate the fact that we are on top of it,” manager Elias Zaki says. Some have even sent pizza. “It’s like Secret Santa.”
Like many stores, A Matter of Health cut hours. Even with precautions like wearing surgical masks and gloves, some staffers didn’t feel safe coming in. So Mr. Zaki is down to eight employees from 12. He says sales are up slightly, partly because of a new email-delivery program but also because his few walk-in customers are buying more than usual.
“For the first week, some people were buying five gallons of milk. That didn’t make sense, unless you’re a baker. We did try to enforce [limits] on popular items that we know our distributors don’t give us a lot of,” Mr. Zaki says. Some vendors, he says, have warned that certain products with specialty ingredients like elderberry won’t be back until January.
Sourcing is a constant concern for Gamal “Jimmy” Yehia, who has owned the nearby Market Deli since 1991. Without his daily food deliveries, Mr. Yehia goes to his local grocery store and Costco for stock. As with other neighborhood bodegas, his comfortably cluttered shop is more than a source of coffee, bagels, and milk. Doormen on break stop by to chat, and some neighbors leave keys for safekeeping.
“I get a lot of comments from people saying, ‘Thank you for opening.’ People, they understand [we don’t have] to be open, but we’re open for them,” Mr. Yehia says.
He is bringing in a bit more money than usual, thanks to business from closed smoke shops’ customers. But the work is exacting a toll. Mr. Yehia, in his 60s, had worked part time before the coronavirus, taking the express bus from Staten Island. Now, he works 50-hour weeks and drives the hour each way. He says he’s kept prices pretty much the same, in part because he drops suppliers who bump up their prices.
“Some companies take advantage,” he says.
Little choice but to reopen
It’s been harder for Ken Huang. He opened Sashimi Ramen Express, a reasonably priced sushi restaurant on a nearby quiet side street, in 2015. Rent runs more than $5,000 a month for 400 square feet; it’s another $1,300 to cover all other monthly expenses, except staff. Mr. Huang closed on March 10 because his workers didn’t feel safe leaving home. With little savings, no money coming in, and the rent due, he reopened April 14. Where he previously had three people making salmon rolls and bubble tea, he now is the only one. He takes orders via text and offers pickup only.
A big night recently earned him about $600, multiples short of what he made pre-coronavirus. He applied for $10,000 in federal aid but got just $1,000 – not enough to cover his electric bill for three months. Just recently, his landlord said he could stop paying rent until he’s gotten back on his feet. But ultimately, he will have to pay everything in full.
Even before the shutdown, many small businesses were fragile. According to a new survey by the regional Federal Reserve banks, 30% of businesses with fewer than 500 employees were classified as “at risk” or “distressed.” Even among those deemed “healthy,” just 20% said they could survive two months with a loss in revenue.
Board games and Zoom chats
Among the most fortunate of local businesses is Hex & Co., a board game cafe. Back when “corona” was just another Spanish word, business was booming at Hex West in Morningside Heights near Columbia University and its sister cafes in Brooklyn, Greenwich Village, and the Upper East Side. During the day, they were a combination WeWork/cafe/study hall/after-school program. At night, young children and their parents, teens, and 20- and 30-somethings packed in, drinking $7 milkshakes and $13 cocktails, strategizing over Settlers of Catan, Codenames, and hundreds of other games that lined the walls.
Fast-forward to the shutdown in March. Hex owner Greg May and his two partners focused on their Columbia location and furloughed about two-thirds of their 100-person staff. Though proudly old-school analog, Hex’s “Dungeon Masters” have taken their quests into Zoom chats and elsewhere in cyberspace. Open for takeaway snacks, Hex West added delivery (of games) and is meeting expenses on both the West and East sides.
One of the relatively few businesses that’s gotten federal aid, it’s lined up more than $200,000 in low-interest loans. Its landlords appear willing to cut deals on rent, and the other three cafes are expected to reopen as soon as customers are allowed.
“It makes me incredibly sad to hear about other small businesses that New York is losing,” Mr. May says. “Every day, you hear about another store or cafe or bar that is in trouble. I hope the city and state can continue to support and help small-business owners.”
Crotchety customers harder to find
Rainbow Ace Hardware, across from S&V, is the closest thing to a general store Manhattan has seen since horses caused traffic jams. A local institution for more than 30 years, it boasts an eclectic inventory – including underwear, rain boots, paint, hammers, curtains, lamps, Lysol, toilet paper, and MyPillow. With the quarantine, it’s added shelf-stable foods like pasta. One worker says business is down by more than half and staffing is at 50%. But here’s the bright side: New York’s infamous crotchety customers either are nicer or are staying home.
“They’re very few – fewer than normal,” manager Fall Sar says. “We’re all in the same boat.”
Editor’s note: As a public service, all our coronavirus coverage is free. No paywall.