SIOUX FALLS, S.D. — Nancy Savage decided to close her two children’s toy stores when the coronavirus struck and it didn’t seem safe to stay open in those dark and uncertain days early in the crisis.
She had opened Child’s Play Toys in downtown Sioux Falls, S.D., in the depths of the Great Recession in 2009. “People thought I was crazy,” she said. But she reasoned that parents would always want to buy gifts for their children on their birthdays and at Christmas.
Business was so good that a couple of years ago she opened a second store in Sioux Falls — then, in March, the coronavirus pandemic hit like a hurricane. She decided to close voluntarily, as many of her fellow downtown merchants did.
“When I closed my doors in March I truly didn’t know if I would reopen again,” Savage said. The doors stayed closed for two months, and she was able to reopen with some adaptations.
For starters she upgraded her online store, installing new software to link inventory to online sales. “That made all the difference in the world,” she said. “I’m so grateful I had a website.”
Before the revamp, “We maybe did $1,000 in sales last year, maybe,” a volume that has exploded this year by comparison, she said.
As countless other merchants have done throughout South Dakota, North Dakota and Minnesota, Savage has been forced by the pandemic to rethink her business and experiment with new approaches to keep her business afloat.
“We’re doing everything we possibly can,” she said.
The pandemic and the abrupt lockdowns or voluntary closures that it precipitated delivered an economic shock to the retail and hospitality sectors — retail sales in April plummeted year-over-year by more than 15% in South Dakota and 19% or more in North Dakota and Minnesota, according to U.S. Census Bureau figures.
Sales in all three states generally have rebounded gradually since, but retailers — and especially restaurants — continue to struggle as the pandemic continues.
“It’s just been amazing,” she said of the response. “When people come in, they come to shop. They’re really feeling good about getting out,” but like the safety of shopping alone.
The pandemic has been a catalyst for innovation, prodding businesses to establish or augment their online stores and take other steps, said Nathan Sanderson, executive director of South Dakota Retailers, which also represents restaurants and other hospitality businesses.
“I’d like to say COVID-19 has really accelerated the rate of change,” he said. Restaurants are adding drive-up windows, for example, and now are seeking locations at the end of a strip mall that allow such access.
Grants states are passing along to retailers and hospitality businesses are helping establishments survive.
“They’re certainly not going to be made whole by this, but it definitely has been a bit of a Band-Aid,” Sanderson said.
Many small businesses also are increasing their presence on social media to forge stronger connections with their customers and to promote sales.
“I really try to show up on social media as the owner and my authentic self,” said Kinzey Fockler, who owns KooKoo’s Nest, a clothing store in downtown Bismarck. She’s also upgraded her online store and works cooperatively with her fellow merchants to promote shopping downtown, a degree of solidarity that grew out of the shared struggles during the pandemic.
“We want everyone to survive,” she said. “We don’t want a desolate downtown with empty storefronts and no personality.
A local car dealer, Bismarck Motor Company, gave away gift certificates to local stores, including KooKoo’s nest, to help local businesses. “That was like my turning point,” Fockler said. “It was just like a beacon of hope.”
More than anything, “It’s just a year of pivot and adapt,” she said. Fortunately, customers have been understanding that the inventory isn’t as complete as she’d like it to be. “People have a lot more grace,” she said.
The future is uncertain, but Fockler is determined to survive. After starting as an employee when the store began in a converted bookmobile, she and her husband bought the business three years ago. “My store is my life,” she said. “If I lost my store I would be devastated.”
Nikki Berglund, owner of two restaurants, Luna Fargo and Sol Ave. Kitchen in Moorhead, has voluntarily limited her occupancy in Fargo to 25% to keep her staff and customers safe, despite the financial strain that imposes.
Safety, in fact, has become a selling point for her restaurants, Berglund said. “As much as we want to make money, we have a reputation for taking COVID seriously.”
Takeout has become a much bigger part of her operation, as it has for many restaurants, she said. “We have pivoted to it,” she said. “Our food looks a lot better when it’s on the plate than takeout style.”
Restaurant margins are thin, even in the best of times, so Berglund has sharpened her pencil and is scrutinizing her expenses more closely than ever, though continues to supply her menus with locally sourced foods. “We’ve gotten just really good at budgeting our money,” she said. “We pivot every day. I’m getting tired of that word.”
Elsewhere in Fargo, a couple of restaurants are using outdoor shelters to allow patrons to dine outside in colder weather. CRAVE at the West Acres shopping center has heated “igloos,” while Granite City employs a similar concept with heated outdoor dining pods.
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Berglund also manages Bernie’s Wines & Liquors, which is owned by her family and has locations in Fargo and West Fargo. The liquor industry has held up well during the pandemic, she said.
“Liquor sales are up,” Berglund said, adding that sales were especially strong early in the pandemic. “We were really up. I think it’s started to level off.”
Berglund is encouraged that vaccines should bring the pandemic to an end next year, but the next few months will continue to be difficult. “If we can make it to March, we’ll be OK,” she said.
Lakes Sport Shop in Detroit Lakes, Minn., also has boosted its profile on social media, and has stayed open throughout the pandemic.
“We take it day by day and hope that tomorrow will be a better year,” employee Bea Burnside said. “We advertise a lot online, but everything is purchased in here,” with some customers ordering by phone and stopping by for curbside pickup.
“Support your local stores,” she said. “That’s the only way we’re going to survive.”
Ryan Pesch, a community economic development specialist for University of Minnesota Extension, said some retailers, such as grocery stores and other stores that sell essentials, are booming, while others are struggling.
“Our take is that it’s very much a mixed bag in the world of retail,” said Pesch, who maintains an office in Moorhead."
By contrast, hospitality businesses are taking a devastating blow. “It’s a nightmare, honestly,” he said. Takeout and pickup menus have given a lifeline to many restaurants, he said.
A third of hospitality businesses surveyed in September by the Federal Reserve Bank of Minneapolis, including restaurants, bars, hotels and resorts, said they were in danger of bankruptcy or going out of business, said Benjamin Wogsland, director of government relations at Hospitality Minnesota, which represents the industry.
More than half, 52%, of restaurants surveyed said they were in danger of going out of business, he said.
That would be devastating for an industry that employs about 300,000 in Minnesota that has already lost an estimated 80,000 jobs, and would have ripple effects throughout the economy.
Ordinarily, the holiday season is a critical period for hospitality businesses. “The holiday season is usually one of the biggest times for restaurants and usually hotels as well,” Wogsland said.
But Minnesota restaurants were closed to sit-down service for a 30-day period in November and December. “It’s just a brutal time for them to be closed for in-restaurant dining,” he said.
This story is part of a 13-day series that looks at all the ways 2020 has changed us. From now until 2021, expect stories on workplace and education, sports, economics, politics and everything in between.