How the Pandemic Changed the Way South Florida Does Business

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It has been months since we all locked ourselves in our homes to escape the coronavirus, but it has become clear that we’ve learned a new way to live and work.

Recently released sales tax data reveals the extent to which we were forced to change — as consumers and as workers — after the economy shut down last spring.

Restaurants, the lifeblood of South Florida’s hospitality industry, watched business plummet after dining rooms were forced to close. Bars, clothing stores, salons, bakeries and other businesses were deemed off limits to walk-in customers.

Many of those businesses have since reopened, with changes, but the data from the Florida Department of Revenue also shows that we actually spent more money in some surprising places.

Construction activities increased. Demand for home improvement services never let up. Cabinet makers stayed busy. And machine shops had more work when companies realized there was little risk in working outside.

Sales weren’t uniform across South Florida. Pawn shops, for example, saw business increase in Broward and Miami-Dade but drop in Palm Beach County, according to the data. Aircraft sales increased in Miami-Dade but fell in Broward and Palm Beach.

The South Florida Sun Sentinel compared taxable sales data between April and May of 2020 and the same months in 2019. Here’s what we found:

Meat and poultry market sales nearly doubled in Broward County from $2.1 million in April and May of 2019 to $4 million during the same months this year — a 93.2% increase. Some of the increase likely stemmed from beef price inflation and shortages that followed shutdowns of some of the nation’s largest meat processing plants.

Large supermarket chains like Publix struggled to keep their meat coolers fully stocked, and many chains limited how many packages consumers could purchase during a single visit.

That’s when specialty stores like Broward Meat & Fish and Delaware Chicken & Seafood Market took to social media to alert consumers that they had wide varieties of meat available.

Sales increased at Delaware Chicken & Seafood as “people went crazy stocking up on meat and eggs and all that,” manager Linda Cenko said. Customers dismayed by shortages and a lack of variety at supermarkets turned to the retailer, in business since 1951, because “we don’t go through processing plants,” she said. “We own our own farms so we never run out.”

Meat and poultry markets in Miami-Dade and Palm Beach counties, however, did not experience a similar boost. Sales dropped 15.9% in Palm Beach County and 1.5% in Miami-Dade.

Skilled crafts flourished in Palm Beach County as sales increased in numerous categories of home and business services. Fabrication and sales of items such as cabinets, wood fixtures, metal doors, frames, molding and trim increased by 29.1% in the county, from $16 million to $20 million.

Fred Johnson Jr., vice president of the family-run Ultimate Fabrication and Welding Services in West Palm Beach, said business never slowed during the quarantine. “We didn’t lay anybody off. We didn’t slow down at all,” he said. “A lot of what we do is big money homes, and those (owners) weren’t really affected.”

Revenue from electrical, plumbing, well drilling and pipes increased 18.4% from $5.6 million to $6.6 million, while paint, wallpaper and hardware dealers saw a 6.1% bump in sales, from $32.6 million to $34.6 million.

Income from machine shops, foundries and iron work increased in all three counties — by 28.7% in Palm Beach, 15% in Miami-Dade and 5.7% in Broward.

Paint, wallpaper and hardware dealers in Palm Beach County were also hard at work. It’s the last part of South Florida with significant land for new home construction and builders had no reason to stop working at job sites, which remain open to the fresh air until the carpeting goes in. Sales here increased 6.1%, from $32.6 million to $34.6 million, while declining 4.1% in Broward and 2.8% in Miami-Dade.

Bulldozers kept rolling in Broward. Sales of rock, top soil, clay, sand and fill dirt increased 20.2%, from $3.1 million to $3.7 million, in Broward while dipping in Miami-Dade and Palm Beach. Dirt is essential for all types of construction, whether for new homes on vacant land or new developments where old buildings have been knocked down. Limestone, mined in quarries in southwest Broward and northwest Miami-Dade, is used to build roads. Increased quarry activity is a sign that investors didn’t believe the downturn would last long.

We didn’t stop eating and drinking in South Florida. We might have done more. Sales at food and beverage stores — including supermarkets and standalone liquor stores — increased 4.9% in Palm Beach, 2.7% in Broward, 2.4% in Miami-Dade and 3.7% statewide.

Most of that increase happened in April, when consumers were still stocking up on whatever staples they could find on store shelves. During April alone, sales jumped by 7.9% in Miami-Dade, 6.3% in Broward, and 10.4% in Palm Beach.

The increase outpaced food price inflation, which was 4.1% for the year ending in April.

Because far fewer tourists were in the area in April, the data likely does not reveal the extent of increased spending by year-round residents.

With restaurant dining rooms closed, the pandemic has been an inadvertent boon for supermarkets. Publix reported a 21.8% sales increase in the second financial quarter that runs from April and June.

“While we do not separate our sales (data) by county, we can say that we saw an uptick in customer spending during Q2,” Publix spokeswoman Maria Brous said by email. “In part, we saw panic buying occurring and share that the industry was resilient. We just needed to give it an opportunity to return to some sense of normalcy.”

While alcohol sales aren’t broken out in the state data or in Publix’ earnings report, global data firm Nielsen reported a 33% hike in off-premise U.S. spirits sales over 12 weeks ending May 23. Retail sales haven’t increased enough to offset loss of sales at bars and dining rooms, Nielsen said, and the huge difference in prices between stores and bars have significantly reduced the amount of money we’re spending on alcohol.

Money consumers saved buying alcohol at retail stores was money lost by the restaurants and bars where we used to spend it.

Considering that on-premises consumption at bars have been closed in South Florida since March 17, sales declines of just 53.7% in Broward, 63% in Miami-Dade and 46.4% in Palm Beach seem surprisingly low. But some bars were able to save themselves thanks to Gov. Ron DeSantis’ decision in late March to let them sell packaged beverages and cocktails to-go.

Bars with attached package stores were also allowed to remain open as long as patrons were barred from drinking on the premises.

For a while after the shutdown, 26 Degree Brewing Company in Pompano Beach managed to retain about 70% of its pre-shutdown business through takeout sales, co-owner Yonathan Ghersi said.

“A lot of it was our loyal following in Pompano. Plus, we reduced pricing on all of our products. We were selling six packs of our craft beer for maybe $1 or $2 higher than (mass-produced) beers,” he said.

But in recent months, as restaurants have been allowed to reopen their dining rooms, many of those regular customers have stopped buying to-go drinks and business has fallen to about 10% of pre-shutdown levels, he said.

Gheris said he’s spending $10,000 to install a pizza oven, freezer and plexiglass shields so the brewery can secure a restaurant license and reopen for on-premises consumption. He’s not happy about it and said he doesn’t understand why the state is allowing restaurants to reopen while his brewery must remain closed.

“It’s acceptable to go into a restaurant and order a drink without ordering food but we can’t be open,” he said. “What’s driving these decisions?”

Following his June 26 state order requiring newly reopened bars to close again everywhere except South Florida, where they hadn’t been allowed to reopen, Halsey Beshears, head of the Department of Business and Professional Regulation, blamed bar owners and patrons for a resurgence in the spread of coronavirus in the state. He said owners and patrons failed to follow capacity limits and social distancing rules.

Apparel stores’ declines were steeper in South Florida. Our region is known for its fashion sense. Many of us dress better than the average Floridian, in part because of our concentration of corporate offices and downtown professional districts. But when we were quarantined, we apparently had more than enough attire in our closet to get us through.

Apparel and accessory stores suffered declines of more than 70% in each of the three South Florida counties — more than the 66.8% decline reported statewide.

If you don’t need clothes, you really don’t need shoes. Working at home means you’re not wearing down your soles of your heels or oxfords. You’re not scuffing your shoes while tripping into the elevator. You’re also not stepping ankle deep into puddles while leaving work after a summer storm.

Who wears shoes at home anyway? Although retailers tried hard to persuade us to order shoes online, shoes stores saw sales decline 77.6% in Broward, 75.5% in Miami-Dade and 78.6% in Palm Beach County. Like the decline in clothing sales, those losses exceeded the 71.8% statewide decline.

Nationwide, shoe sales fell 87% in April and 56% in May, according to the trade website Industry analysts blamed the drop on retail store closures, stay-at-home orders for office workers and the suspension of sports at schools and colleges.

Pawn shops were ’essential.’ Thrift stores were closed. So was the Swap Shop. Garage sales were forbidden. But thanks to federal stimulus payments that put an extra $1,200 in most taxpayers’ hands, we had money to spend. Many of us went to pawn shops. Sales increased 15.9% in Broward and 6.4% in Miami-Dade.

Josh Davis, owner of G.C. Pawn, which has nine stores in Broward County, said families came in to the company’s nine Broward County stores looking for anything that would keep the kids occupied. “They found themselves saying, ’Hey, my kids are home and they need to stay busy. We need something to do.’”

They scooped up video game consoles and controllers, bicycles, surfboards, laptop computers and other electronics and gym equipment, including free weights, Davis said.

Uncertainty surrounding the shutdown also sparked an increase in gun purchases by first-time buyers, he said.

Sales have tapered off since April and May as the economy has reopened, he said.

In DeSantis’ late March emergency order that decided which businesses must close, pawn shops were deemed essential and allowed to stay open because low-income residents rely on them for loans. But loan business declined for pawn shops across the nation because of the federal stimulus payment and the $600 a week enhanced unemployment benefit, the parent company of the Value Pawn chain said in its most recent earnings report.

That loan business is expected to bounce back as the stimulus money dries up, company officials said.

Still, pawn shops in other parts of the state did not fare as well as in Broward and Miami-Dade. The state data shows that sales declined by 45.3% in Palm Beach County and 51.1% statewide.

Davis, who is also president of the Florida Pawnbrokers Association, said he had no idea why the data shows business in some areas declined in April and May. “It’s not the sentiment I received from other brokers,” he said.

Other findings:

Aircraft sales increased by 10.4% in Miami-Dade County, from $9.1 million to $10 million, while dropping 29% in Broward and Palm Beach counties and 13.2% statewide.

Roofing and sheet metal sales increased 585.7% in Miami-Dade but fell in Broward and Palm Beach.

Sales of scrap metal and material salvaged from junk yards increased 129.4% in Broward, 5.2% in Palm Beach, and 20.8% statewide but fell in Miami-Dade.

Auto sales and leasing declined 34.9% in the tricounty region — a figure that would have been worse if large dealers hadn’t already shifted much of their sales and administrative functions to their digital operations. While many retailers pulled print and electronic media advertising during the spring, car dealers maintained a significant presence. “The COVID-19 pandemic accelerated a shift in consumer behavior toward digital engagement,” Fort Lauderdale-based mega-retailer AutoNation said in its second-quarter earnings report.

Copyright AP - Associated Press
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