Michigan stores can reopen. It’s unclear how many shoppers will follow.

Retail worker in a mask

Michigan stores are trying to adapt to new ways of face-to-face sales, hoping that initial limitations of 10 shoppers at a time, social distancing and face masks will rebuild sales and soon return to regular operations. (Shutterstock)

June 1 update: Gov. Whitmer to allow bars, restaurants, retailers to reopen June 8

Hours after Von Maur reopened to customers on Tuesday, several shoppers had already made their way to the Grand Rapids department store.

Spring/summer merchandise was fully stocked, and additional cleaning had been done.

A leaner staff, about eight employees, was there to help anyone who came in on the new appointment basis allowed by Michigan Gov. Gretchen Whitmer’s latest executive order allowing “nonessential” stores to open.

After being closed for more than two months due to state restrictions to slow the coronavirus, Von Maur joins many Michigan retailers and their customers who are now hoping a return to in-person shopping signals the start of a sales rebound.

“Everyone’s been super joyful to get to walk around, even if they’re not looking for something special, and browsing for new stuff,” said manager Claire Espeset. 

The 90,000-square-foot store opened in October at Woodland Mall on the city’s south side. The higher-end and family-run chain from Iowa replaced a closed Sears in time for the holiday season — just as retail spending was setting a new national record.

 

Overall retail sales reached $5.46 trillion in the United States in 2019, according to Statistica, a market data firm. That’s a gain of more than $1 trillion in six years. At the same time, online sales grew its market share, with forecasts calling for it to comprise 12 percent of overall retail sales by the end of this year.

But COVID-19 and the statewide shutdown in March added layers of uncertainty for the state’s retailers who collectively employed about 450,000 or 10 percent of Michigan workers before the pandemic. Several stores and shopping centers in southern and western Michigan are reopening this week, while others say they’re waiting until mid-June or longer. 

Like Von Maur, stores are trying to adapt to new ways of face-to-face sales, hoping that initial limitations of 10 shoppers at a time, social distancing and facemasks will rebuild sales and soon return to regular operations. While grocery and dollar stores showed sales jumps during the pandemic, many other retailers continue to be far below initial 2020 sales forecasts.

“We’re just feeling our way through it,” Espeset said. “We’re hoping this is a step in the right direction and hope we can fully reopen soon.”

Reopening fully also is the goal for the Michigan Retailers Association.

“We want a full reopening as soon as possible, with the idea that retailers are ready to make it work for their individual situations,” said Meegan Holland, spokesperson for the trade group. “It’s hard to have broad rules that apply to all retail.”

While overall retail gains show strength in the sector, many independent stores in Michigan have felt pressures from online sales, rising rents and employee shortages. 

Retail employment in Michigan declined by 24.4 percent in April, falling by 113,800 jobs, said Donald Grimes, an economist at the University of Michigan. That followed a long, slow decline in retail jobs, he said, but the extreme drop won’t last past midyear.

“While the industry could lose a few more jobs in May, we think it will be adding jobs after that,” Grimes said. Unclear, though is how many retail jobs will return.

As recovery builds to small gains by 2022, Grimes said, “the net effect is that we think employment in the retail sector will ultimately end up in 2022 with about 22,000 fewer jobs than it had in 2019.”

How those jobs will look is changing, Grimes added. Initial trends from COVID-19 show growth in distribution centers, which can offer more full-time positions at higher pay than at stores, where many jobs are part-time or even seasonal in many areas of the state. One study from Progressive Policy Institute found in 2017 that fulfillment center jobs pay 31 percent more, on average, than brick-and mortar retail jobs in the same area.  The average retail sales pay in the state is $12.41 per hour, according to Indeed.com. 

“It’s not that people aren’t buying stuff … but they’ll be buying it in a different way,” Grimes said. 

What that means for Michigan communities remains to be seen. 

“In the more rural counties … the number of people who have to work in retail is enormous,” Grimes said. “If it disappears, it’s the base of activity in a lot of places.”

For larger shopping centers, like Twelve Oaks Mall in Novi, extensive preparations went into reopening. Up to 40 percent of the mall’s 180 stores were set to open this week, with more expected to follow.

A major focus at Twelve Oaks was shopper health precautions, said mall manager Dan Jones. In April, a survey by online retail and business payments information source PYMNTS.com showed “that returning to normal shopping behavior has very little to do with economic recovery or the need to spend – and everything to do with personal safety.”  

At Twelve Oaks, tables were removed from the food court, and the play area is closed. Seating areas also were reduced, and multiple signs about face masks and social distancing were posted — all to reassure customers that safety concerns are being addressed. 

“As the closure approached, it seemed so unusual to even be considering closing a shopping center,” said Jones. “After two months, we’re anxious [to reopen], but also very cautious. 

“We really appreciate our retailers and what they’ve had to go through,” he said. “We look forward to getting people back to work.”

Smaller stores still may be considering when to reopen, and how to survive financially. Many of them are turning to fund-raisers and grant requests, in addition to seeking federal Paycheck Protection Program loans. 

Thomas Smith owns Urban Apparel in Muskegon Heights. While the national clothing sector has been hit hard by the pandemic – with sales falling 80 percent from March to April – Smith said he’s hopeful for his 17-year business selling men’s clothing. 

Smith is waiting to reopen until he’s sure he can sustain it, and until a time when customers won’t feel constrained by the stay-at-home order. He describes his store as “very small,” and one where social distancing will take some work for him and his one part-time employee to give customers the space they’ll need. 

“My plan is not to be the first retailer to open,” Smith said. “I’ll see how it goes with the other ones first.

“I’d like to see the [coronavirus] numbers drop more before I open up, too.”

He said he can wait until mid-June because of a $5,000 grant from the Michigan Economic Development Corp, a quasi-state agency that promotes development. That helped him survive the immediate revenue drop to zero when his store closed on March 23, allowing him to pay his rent and accounts receivable. 

“It let me step back and breathe for a minute,” he said. 

That’s part of the goal for the Small Business Relief Program through the MEDC. About 2,700 businesses, including restaurants and service providers, along with retailers,  received grants from regional economic development groups, with amounts ranging from a few hundred dollars to $10,000. 

Those grants helped retain 11,000 jobs out of more than 1 million lost statewide amid the pandemic, according to MEDC estimates, said Joshua Hundt, chief business development officer. The $20 million in grants were funded through the Michigan Strategic Fund, whose board doles out tax credits and grants, and from business attraction funds.

The effort was initiated in March, Hundt said, to focus on downtowns and main commercial corridors. “It was critically important in terms of ensuring that we continue to have small, vibrant communities with small businesses,” Hundt said, notably because those types of locations help to attract larger businesses.

Beyond the immediate concerns about retail, there also are long-term questions for the state’s retailers: How many stores will reopen and survive?

“It’s too soon to tell,” said Holland. “I still have a lot of retailers telling me, ‘I can’t open yet. 

“You have to wonder. Will they be able to open at all?”

There are some signs of rebound. At Momentum Outfitters in Traverse City, part of the northern Michigan region allowed to open ahead of Memorial Day weekend, the first few days of business produced “a good, steady weekend,” said manager Dawn Gray.

While not as good as a normal summer weekend, sales reached about 75 percent of goal, Gray said.

“We know it’s not going to be a normal year,” Gray said, “but after a few days, we are very hopeful.”

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Comments

Kevin Grand
Fri, 05/29/2020 - 7:00pm

Curious that there's no mention of the underground economy which has slowly emerged over the past several weeks.

More and more people have ceased waiting for "permission" from the governor to open. Cash under the table certainly doesn't hurt, either.

The way I see it, you can either make things easier and allow everyone to open if they wish, or you can continue to be coy and "allow" businesses to open at a glacial pace depending upon the ability of their lawyers and lobbying staff.

Albert
Mon, 06/01/2020 - 7:17pm

And that's exactly the mindset of why we are still here in this mess. A small splinter minority thinking they know better than the science, the facts, the truth.
Consider this, If 100% of us had put on the masks, 100% of us washed, kept apart, 100% sheltered, then Covid would be extinct like dinosaurs MONTHS AGO.
But nope, that 18% who are smarter than reality have kept us in this mess all the way thru June. Maybe parts of July.
Remember these "heros" of truth, the conspiracy experts, when all the stores start filing bankruptcy this fall.
There's the blame.

EB
Fri, 05/29/2020 - 8:19pm

I went into Walmart today and was shocked by how many people were not wearing masks.

I'm done. If I can't order it online and get it shipped home or picked up at the store parking lot, I'll do without.

J H
Fri, 05/29/2020 - 10:28pm

I think there will be plenty of shoppers people are tired of being locked up and many are already out and about just waiting for places to open. As long as the stupid rules are not too annoying to follow people will shop and dine out. Open up the state!

Ben W. Washburn
Fri, 05/29/2020 - 11:16pm

I'm disappointed that there is nothing in this report that acknowledges that the very first and critical need of any retail store, is to make a profit, or to at least break even while marking time, hopefully awaiting better times. The only way that most retailers can make a profit, or at least mark time, is when their consumer traffic is at 100%. General overhead costs do not go away. Rent, power, heat and cooling, the debt costs of inventory, do not go away. 25% traffic can not possibly bring solvency back without sharply raising prices to the level needed to break even. And a sharp raise in prices, is sure to alienate a large number of clients from their store and brand. It's a no-win situation. It's probably better to declare bankruptcy and try to start over with a new name and brand. Economic recovery from this pandemic is going to be a lot harder than anyone seems willing to admit in the media.

Abby Baker
Sat, 05/30/2020 - 11:50am

People do need to be personally responsible and use common sense when out shopping whether it be for Groceries or a day out.. in Southwestern Michigan its a fact that many Michiganders headed to Indiana to get their hair done, eat out and shop at the University Park Mall , Michigan City and Shipshewana., parents took their growing kids to buy summer clothes as no department stores are open around here and Indiana retailers are happy to receive anyone who walked in. I-94 looked like the 4th of July with the Chicago people and Indiana Folks pulling their Campers, 4 Wheeler's and ski jets heading for their Michigan cabins.. it looked pretty normal around here.

Marshall
Sat, 05/30/2020 - 12:03pm

Businesses owners have always faced challenges. Coronavirus is a big one. . The heavy hand of government should not be another. Pity that these shops had to be closed while the stimulus checks were going out. They missed a chance to compete for those dollars. That may have been the difference for some in their fight for survival.

Anonymous
Sat, 05/30/2020 - 1:27pm

I go to the grocery store once every two weeks. That is the only store I will be going to. I will not be spending any unnecessary money for quite some time! If this virus comes back with a vengeance in the fall, everyone will wish that they had saved and prepared. But No, instead they will all be complaining that they are broke, can't pay bills or buy food. Good luck! That will not be my family!

Margaret
Sat, 05/30/2020 - 5:10pm

Which stores I return to is entirely dependent on how seriously the store owners take safety precautions for my health. A store that allows customers to shop and clerks to serve without a mask and which does not attempt to prevent spread in various ways does not need my business.

SSGB
Sun, 05/31/2020 - 3:08am

The State of Michigan majority that has not been brainwashed as the way to many constituency has.
The blood shed, the lives lost, the honor and courage that was shown and given so we the people can have the freedoms that sadly a majority of Americans do not respect nor do they even have one ounce of thought how over privileged they have been given.
The men and women who Volunteer let me say that again, VOLUNTEER to protect and Defend all the rights and defend against Foreign and Domestic enemy who would threaten our way of life.
Many Americans neither have offered that selflessly gift or have any idea what it means to live in a third world country and or a socialist controlled tyranny.
The Governor whitmors have no right to say we are in this together when its obvious we the people decide our own risks and the consequences for them.
The guilt shame of you must not care for the others of certain death is the most outrageous mind job Govenor whitmore is finished im sure she is smart enough to know that.
Michigan will and has waited long enough for our lackluster leaders to save face.
The time is now that offer is over and court saved or not the State Of Michigan needs save our state.
NEVER whether the brainwashed are suckling and are blissfully blind to whats taken place.
We are not into this together anymore.
The Michigan majority is in saveing our state and from a party that is corruption is not even believed that they have reached the level of destruction to our way of life our freedoms and free souls.

Ted
Mon, 06/01/2020 - 7:05pm

What is this "majority" you speak of?
5%? 10%?
Maybe, at best, 24%?

Old hippie
Mon, 06/01/2020 - 7:24pm

Some of us that have seen this before can say from experience: this be exactly like the 1918 plague that killed millions.
Same "curve", same cabin fever symptoms, same lines drawn in the sand, same spikes, same anarchy themes, etc.
Only big diff is so many more people moving about so much faster these days.
I'm only shopping food and fuel and beverage......stocking the cellar full. This beast is coming back with teeth!