Main Street retail and the pandemic
Main Streets across Minnesota are noticeably quiet during the COVID-19 pandemic as businesses close because of executive orders and residents follow stay-at-home orders. Both residents and economic development officials are concerned about the temporary closures of retail establishments in their cities — and how these closures will affect the local economy. Small business owners are not only employers and a provider of goods, but also neighbors, friends, and concerned community members who want to help. A better understanding of the current economic situation is a good place to start.
Extension’s community economics team has long used state sales tax data from the Minnesota Department of Revenue to help communities understand their retail sector. Data from 2017 — the most recent available — provides the distribution of retail and service businesses by category across the state, according to both number of businesses and total sales. This information can be used to gauge the overall impacts of COVID-19 on Minnesota’s retail sector.
Minnesota’s retail sectors by type and size
Retail is an important sector of the economy, accounting for 5 percent of Minnesota’s total economic output and 7 percent of the state’s employment (IMPLAN, 2017). Retailers provide goods and services directly to consumers. Retail stores also add vibrancy to Main Streets and business districts and provide critical products to residents. The following chart shows the gross sales, number of stores, and per capita sales for all available retail categories in Minnesota in 2017. Vehicles and parts stores have the largest gross sales among all categories in Minnesota, followed by food and beverage and general merchandise stores.
The largest category by number of establishments is the food service and drinking places category with 11,886 establishments in Minnesota. This category includes bars, restaurants, caterers, and all limited-service restaurants, such as fast food, coffee shops, and delis.
|CATEGORIES BY NAICS CODE||GROSS SALES||%||NUMBER||%||SALES PER CAPITA|
|441 RETL -VEHICLES, PARTS||$19,646,295,483||19%||3,052||4%||$3,522|
|442 RETL -FURNITURE STORES||$2,592,719,807||2%||1,962||3%||$465|
|443 RETL -ELECTRONICS||$3,261,800,938||3%||1,646||2%||$585|
|444 RETL -BUILDING MATERIAL||$8,039,411,088||8%||2,168||3%||$1,441|
|445 RETL -FOOD BEVERAGE STORE||$14,058,780,470||13%||3,461||5%||$2,521|
|446 RETL -HEALTH, PERSONAL||$4,967,904,311||5%||2,104||3%||$891|
|447 RETL -GASOLINE STATIONS||$8,695,947,615||8%||2,046||3%||$1,559|
|448 RETL -CLOTHING, ACCESSORY||$3,621,001,253||3%||3,686||5%||$649|
|451 RETL -LEISURE GOODS||$2,338,342,788||2%||3,597||5%||$419|
|452 RETL -GENERAL MERCHANDISE||$13,128,074,689||12%||1,211||2%||$2,354|
|453 RETL -MISC STORE RETAILER||$4,907,194,382||5%||11,329||16%||$80|
|713 AMUSEMENT, GAMBLING, RECR||$2,152,953,090||2%||2,484||4%||$386|
|722 FOOD SERV, DRNKING PLACES||$10,000,831,617||9%||11,886||17%||$1,793|
|811 REPAIR, MAINTENANCE||$3,732,524,694||4%||8,491||12%||$669|
|812 PERSONAL, LAUNDRY SERVICE||$2,051,808,660||2%||8,893||13%||$368|
How can I use this information to help my community?
City and county leaders can look up their community’s data from the Department of Revenue. At the local level, per capita sales for each category can be used as a starting point to estimate overall lost sales and to target outreach to businesses.
For communities that have a local option sales tax, knowing this information can help estimate how much lost revenue might occur because of closures.
What are your options to help retailers?
Community leaders can help local retailers by organizing a response team to help them apply for assistance with local, state, and federal programs aimed at providing financial assistance. Letting community members know how they can continue supporting local businesses, even while closed to in-store customers, is also important. This might include creating a directory of retailers who offer online shopping, curbside pick-up, or delivery. Some towns have engaged in community-wide marketing efforts to feature gift card purchases, like the gift card extravaganza through the Northfield Chamber of Commerce or direct financial support, such as Greater Bemidji’s Gifts of Hope Fund.
During an uncertain time, communities can mobilize to support local retailers by:
- Forming a response team to organize and coordinate efforts among local officials and business leaders
- Communicating consistently and clearly to community members about options to continue supporting local businesses
How can you extend support for retailers once COVID-19 passes?
Communities come together to support each other during disasters, but once they subside, the initial burst of energy and support to rally around one another sometimes wanes. As there is no clear end date for when COVID-19 will end, it is especially important for communities to continually rejuvenate efforts to support local businesses — now and after the pandemic passes.