Main Street merchants remain resilient and are even thriving 18 months into the pandemic, but they’re not quite back to “business as usual.” That won’t happen until those merchants get their workforces back and the threat of COVID-19 dissipates. At the same time, many people are still nervous about going back to work — or about going out at all.
As a result, Main Street’s small to mid-sized businesses (SMBs) employ 1.4% fewer workers now than they did before March 2020, but they are paying their workers 3.1% more, according to the latest Main Street Merchant Index released on Monday (Oct. 11) by PYMNTS.
Still in a Pandemic
Many Main Street SMBs are still understaffed, and some are raising wages in hopes of keeping and attracting more workers.
The challenge they face was underscored by the September jobs report released on Friday (Oct. 8) by the Bureau of Labor Statistics. New jobs increased by 194,000 during the month, a number far lower than the 500,000 economists had expected and the 366,000 jobs that were added during the previous month.
Related news: Sept. Jobs Report Disappoints, With Just 194K New Positions Added
Nick Bunker, economic research director at the job placement site Indeed, noted that new COVID-19 cases were continuing to decline, “but the reality is that we are still in a pandemic.”
That means employers will continue to face competition for employees, said Daniel Zhao, an economist at the career site Glassdoor. He added that the “severe imbalance in labor supply and demand” is anticipated to continue for the time being.
Consumers Remain Concerned
People’s reticence about going out was also reflected in the box office turnout for the new James Bond movie that opened on Friday (Oct. 8). The film tallied $56 million during its U.S. opening weekend, but fell short of the $80 million or even $100 million some box office analysts had projected, CNBC reported.
One analyst said the high expectations came from analysts’ belief that there was pent-up demand to see the film. But the results show it’s still a challenge to draw people out to the theater.
Consumers’ reticence to go out has been a drag on other parts of the economy, too. In fact, 48% of consumers say they are still “very” or “extremely” concerned about whether the pandemic might impact their health or the health of those close to them, and only 27% plan to do more shopping in physical retail stores in the next three months, according to the PYMNTS report, The Post-Pandemic Consumer at 18 Months.
Despite this uncertainty, Main Street SMBs continue to outperform the broader business sector, as they have done for more than a decade.
Main Street Continues to Be Resilient
Today, Main Street SMBs employ roughly the same number of workers, pay higher wages and maintain more brick-and-mortar establishments than they did before Q2 2020 when the pandemic started.
Many brick-and-mortar Main Street SMBs temporarily closed in Q2 2020, but continued to pay rent and maintain their physical stores. Many reduced staff at the start of the pandemic, but have been starting to bring them back. There are now just 1.4% fewer workers on Main Street than there were in Q1 2020.
Main Street SMBs also cut wages, but now they are spending more than before to keep the employees they have. Their employees are now earning roughly 3% more income than they did in Q2 2020.
In the face of the continuing challenges posed by the pandemic, Main Street SMBs are generally outperforming their larger peers. Though the circumstances around them are still far from normal, they have adapted — and in some cases are emerging stronger than ever.