Sanderson: The Impact of COVID-19 on SD retail businesses

Nathan Sanderson

Until about a month ago, most of us thought that “social distancing” involved asking for a corner table at our favorite restaurant on Saturday night, so we could enjoy a quiet conversation with our dinner date.

Times change of course, and in the wake of COVID-19, many mom and pop businesses in South Dakota have seen their lives turned upside down as their stores, shops, pubs, and restaurants have experienced the fastest, most dramatic financial downturn since the Great Depression.

In South Dakota, the restaurant industry lost more than $40 million in sales and cut 5,000 jobs in the first 22 days of March. Forty-two percent of restaurant operators laid off employees during that period. Seventy-five percent cut employee hours. Three percent permanently closed their doors, and an additional 6 percent could do likewise within the next 30 days.

As one of our members noted about their small rural community, “In the long run, some of these businesses are probably going to close. They can’t cash-flow. They can’t afford to pay their employees, and those folks may leave town.”

The South Dakota Retailers Association has nearly 4,000 members in 160 different business categories. From grocery stores, restaurants, hotels and car washes to hardware, clothing, dentistry and plumbing, our membership includes a wide variety of the goods and services South Dakotans use every day.


Many of these businesses are in “conservation mode,” making only essential purchases, scaling back advertising, reducing workforce, and trying to ride out this storm.

I have spoken with dozens of business owners as we have tried to help them navigate what for many is uncharted territory — unemployment claims, federal stimulus, city closure ordinances, guidelines from the Center for Disease Control, and many others.

The stories of their efforts to keep their businesses alive, continue to support their employees, and serve their customers and communities suggest three key takeaways.

First, some of these businesses are going to close and they are not going to reopen. Our retail landscape is going to change. Mom and pop business owners operate on very thin margins, often 3 percent or less. They cannot afford to be shut down for even a few weeks, much less several months.

Business owners who have spent a lifetime building a business, mastering their trade, sponsoring uniforms for the baseball team, donating to FFA leadership trips, and smiling at customers when the bell jingles as they walk through the door will be forced to permanently shut their doors.

Second, most retail businesses will survive. While COVID-19 has certainly caused a setback for the vast majority, small business owners are a resilient group. They will bounce back and customers will see a continuation of the business practices they’ve implemented to better serve customers during this uncertain time.

Curbside pickup and home delivery will continue; websites will expand and improve; social media will become of ever-greater importance to traditional brick and mortar shops. Enhanced sanitation practices will become standard.

After 9/11 we saw much more robust security measures in airports and other locations around the world. After COVID-19, the improved health and sanitation measures businesses have employed — hand sanitizer stations, biodegradable single-use items, more robust ServSafe training — will become more visible in all manner of stores and restaurants.


And finally, the connection between small businesses and the communities they serve will become stronger than ever. Many businesses have stepped up to offer special shopping or dining hours to accommodate older or at-risk customers. Others are donating supplies – food, iPads, surgical masks, disposable gloves, cleaning products, and many other items to assist those unable to leave their homes and the health care workers on the front lines of the response.

We’ve also seen customers respond to assist businesses in need. Purchasing gift cards, ordering food to-go and picking it up curbside, leaving a healthy tip, and patronizing local businesses are great ways to give back to the retailers whose presence on Main Street stabilizes our communities.

South Dakota’s mom and pop businesses cannot avoid the impacts of COVID-19. But we can help them recover faster once this unusual situation passes by practicing the original definition of social distancing. By then I think we’ll all be ready for a night on the town.

Nathan Sanderson is the executive director of the South Dakota Retailers Association. Visit them online at

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