Like many small businesses, Books on the Square has a manager who keeps a close eye on numbers and trends. More than three weeks ago, Jennifer Kandarian read reports of the spread of the new coronavirus through Italy and into the rest of Europe, and she had an uneasy feeling.
She ordered more cleaning products and hand sanitizer for the popular independent bookstore on Providence’s East Side.
“We started about two weeks ago, with cleaning surfaces more often. So, we were just being careful,” Kandarian said. By the time the viral epidemic, now called COVID-19, had reached Rhode Island and pandemic stage, Kandarian’s store had opened a drive-up book drop at the back door, for elderly patrons and others too nervous to walk inside the store.
“I’m 50. I’ve never seen anything like this in my life,” Kandarian said on March 15. “You can read the stories of what’s happening in Italy, but you really just can’t comprehend that it’s going to happen here. And at one point, you know it is.”
It wasn’t long before Kandarian said the owners and she were bracing for the possibility that businesses such as Books on the Square would be ordered to close by Gov. Gina M. Raimondo, becoming part of a sudden clampdown on public activities in Rhode Island aimed at curbing spread of the contagious disease.
As of March 25, the closure hadn’t come and none of the 12 bookstore employees had lost their jobs. But Kandarian was facing the reality that a bookstore is not an essential service. “I’m assuming, at some point, the governor will say retail needs to shut down,” she said.
State orders to vacate or temporarily close businesses – including any space where more than 10 people might gather – are intended to reduce the rate of infection so the state’s health care system is not overwhelmed by the most serious cases, which require intensive care, Raimondo and state health officials explained.
But that preventative step has caused incalculable collateral damage, too.
Mounting closures of businesses – some ordered by the state, and some done voluntarily by owners – have crushed the state’s economy in a matter of days.
The wave began with the cancellation or postponement of large conferences and meetings, then the closure of bars and restaurants, casinos, malls, schools, universities and day care centers.
Major employers and small businesses alike emptied their offices, sending employees home with laptops and work assignments. Pawtucket-based Hasbro Inc. was among the first. Apple Inc., one of the country’s largest companies, closed all of its retail stores in the U.S. Businesses sent emails and phone messages or social media posts to followers, initially describing their cleaning routines, then updating with temporary closure announcements. On March 18, Rosebud Salon Inc. in Federal Hill said it would lock its doors through the end of March.
Some restaurants have tried to stay open with deliveries and takeout. Others closed quickly.
Vibrant downtown streets across the state have become eerily quiet at night.
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HANGING ON: James Mark, owner of Providence restaurants big king and north, says the coronavirus crisis has drained his bank account nearly dry, leaving him with $600. He’s trying to keep the business afloat with a takeout service.
PBN PHOTO/MICHAEL SALERNO[/caption]
HARD STOP
By March 20, the state’s hotel industry was staggering, with sudden closures announced by Omni Providence Hotel, the state’s largest, as well as the Graduate Providence and others.
The combined effect has been catastrophic on travel, tourism and hospitality, which makes up a large part of the Rhode Island economy, according to analysts.
Once Raimondo said people could not meet in groups of 250 or more, the decision effectively closed the R.I. Convention Center and began a flood of cancellations and postponements.
That first wave of cancellations cost the tourism sector $8.3 million in direct spending, according to Kristen Adamo, CEO and president of the Providence Warwick Convention & Visitors Bureau.
While convention planners were able to move events worth $6 million to dates later in the calendar year, it has become clear that when business resumes, the competition for tourism dollars will be fierce, she said.
Providence hotels saw a wash of canceled hotel rooms. By March 17, occupancy in Providence was about 10%, Adamo estimated, down from the 65.8% recorded in February. “In the travel industry, 9/11 was always the bottom,” she said. “That was the worst they thought it could be. That was always the measurement of the lowest it could go. Now, because of the duration of this, most people in my industry think the impact on travel and hotels will be worse than 9/11.”
SUDDENLY JOBLESS
Unemployment claims have exploded. Within the first 10 days of the state-directed closure of businesses, more than 50,000 Rhode Islanders had filed for unemployment benefits and the numbers keep rising, according to Scott Jensen, director of the R.I. Department of Labor and Training.
The last peak was 5,384 claims made in a single week in January 1992, about 769 claims daily, a year into the state’s banking crisis.
‘This is an absolutely unprecedented event.’
SCOTT JENSEN, R.I. Department of Labor and Training director
“This is an absolutely unprecedented event,” Jensen said. “Not even in the Great Recession” did the state lose more than 800 jobs a day. “And we did more than that on Monday.”
The DLT anticipates those numbers to keep rising. It has not yet determined the financial total, Jensen said, because of the volume of claims.
As of March 18, the state has more than $500 million in its unemployment insurance fund, and Jensen said he anticipated it wouldn’t remain solvent without being replenished from federal sources. The state last emptied its unemployment fund in the Great Recession, when the fund had about half that amount, he said. His office is trying to plan for the future.
“The trust fund is going to need to be healthy because it’s going to take a big hit,” Jensen said. “Because so much of this happened so quickly, we’re working on good models and working with other states about what we think we can expect.”
BUILDING ANXIETY
Commercial construction, one of the hardest hit in the last recession, is expected to feel the hurt again. Although commercial development continued across Rhode Island in mid-March, the cities of Boston and Cambridge in Massachusetts ordered all activity to stop in an attempt to slow the spread of the virus.
Bond Bros Inc., a Boston construction management firm with offices in Providence, continued to press forward during the week of March 16 with the $25 million renovation at the Providence Public Library despite rumors that the city was going to halt construction projects.
Frank Hayes, president and chief operating officer of the building division at Bond Bros., said he had been trying to reach Providence Mayor Jorge O. Elorza’s office to find out what was happening, but he had no success.
Hayes said Bond instituted infection-control procedures – including separating people and installing hand-washing stations – as guided by the U.S. Centers for Disease Control and Prevention, as soon as COVID-19 appeared in the U.S. The procedures are in place across its projects in New England.
Hayes expressed worry about construction workers being forced to leave jobs unfinished across the state.
The sector in Rhode Island employed about 19,500 people in January, according to seasonally adjusted figures provided by economist Leonard Lardaro of the University of Rhode Island.
And Hayes said when large projects are shut down, there’s a ripple effect across many companies. Adding to the difficulty: Not knowing how long the crisis will last.
“In Boston, they said two weeks,” Hayes said of the work stoppage. “But once it shuts down, it’s easy to continue that shut down versus start back up. I am concerned.”
He added that if he thought stopping construction would prevent the spread of COVID-19, he would support such a move. “I’m just not convinced of the direct benefit of setting all the construction workers free,” he said.
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SUPPLY SHORTAGE: Tom DeAngelis, co-owner of Tom’s Market in Tiverton, says he’s trying to manage supply challenges and encourages customers to self-isolate and practice social distancing during the COVID-19 pandemic. / PBN PHOTO/DAVE HANSEN[/caption]
SUPPLY, DEMAND
Some small-business owners, who work closely with employees, say they understand the need for physical separation of people as much as possible, as well as other safety measures.
At Tom’s Market Inc., co-owner Glenn Place said the clerks are wearing disposable gloves, and more disinfecting is happening throughout the store. Tom’s Market, which has three locations in Rhode Island, has seen its sales figures more than double from typical amounts.
That’s also meant crowds in stores in excess of what has been recommended by state officials. He’s tried to institute limits on purchases of popular items, such as paper towels, toilet paper and facial tissues, but it has been difficult to enforce, he said. Certain meats also have been hard to keep in stock, too. His supplier of pork, for example, needs a two-week window to increase orders.
The sudden surge took everyone by surprise.
One couple, he said, came into the Coventry store and purchased $500 in meat, clearing out his cases. He restocked, only to see the product picked clean by other patrons.
“The problem now is we’re seeing almost a hoarding mentality,” Place said. “Where people are coming in and everyone is involved. It’s caused shortages to our deliveries.”
While his suppliers are providing goods, it’s coming in smaller orders than he’d like because they have to spread the amount available among all stores. Still, Place said he sees a saturation point coming.
Recently he’s started to see more people doing their shopping with hand-held baskets rather than carriages stuffed with food.
“Canned goods, pasta, dried beans, tuna fish, all of those staples are the ones that are moving fast,” he said. “It’s unprecedented what we’re going through.”
PIVOT POINT
For restaurants, the closures brought by the COVID-19 threat have been devastating.
Several Providence restaurateurs voluntarily closed their establishments, even before the governor ordered all Rhode Island eateries to stop dine-in services, while others have shuttered their bars and dining rooms and are trying to keep their businesses alive by switching to takeout services.
James Mark, owner of two popular restaurants in Providence, initially closed his two establishments out of concern for his staff’s safety in serving the public.
Mark shuttered big king and north after a Saturday night in which he watched customers doing little to physically separate themselves.
The closure didn’t last.
Much to the frustration of Rhode Island restaurateurs, Raimondo declined to extend the deadline for eateries to submit the sales tax collected in February, as Massachusetts had done.
Mark submitted the taxes, but it left him with $600. “I drained my entire bank account,” he said.
So he reopened the business at big king on Carpenter Street on March 22 for takeout, creating a system where patrons order and pay online and pick up orders in 15-minute increments so there is no line outside.
He still isn’t sure if it’s going to be enough business for him to survive, but he’s heartened by the response of customers.
“We’re sold out for the rest of the week,” he said.
A similar transformation has taken place at Pot au Feu, a romantic French restaurant that has been in downtown Providence for more than 40 years. Owner Bob Burke said he led the effort to persuade state officials to allow restaurants to sell bottled wine and beer as part of takeout orders.
He transformed the table-service concept into takeout on short notice – overhauling the internet service for touchless payments, ordering 50,000 white gloves and 7,500 to-go containers, and hiring a website designer to create a new menu. He is now hand-delivering entrees to customers who drive up for takeout. The first night, he wore a suit and tie with white gloves. Into each meal, he tucked a salad and fresh loaf of bread, a touch of bistro ambiance at the curbside.
“We’re coming out fighting,” he said.
Despite some victories, many in an industry that helped establish Providence as a destination are now threatened with extinction.
The restaurant business is challenging in the best of times, Burke said. “In the worst of times, we could easily see 50-75% of the restaurants in our state go out of business,” he said.
Burke worried about employees, many of whom are part-timers without access to unemployment benefits. One of his employees, a single mother who worked just one night a week, use to make several hundred dollars in tips.
“She’s not eligible to collect [unemployment],” Burke said. “The single mom who is putting her life back together and finally got a new apartment, she’s not going to last. There is a huge human impact.”
Other businesses, in theory unaffected by the state-imposed closures, also say they are struggling to keep from laying off workers.
Even the supermarket business isn’t necessarily on safe ground.
Jack Siravo, owner of Belmont Marketplace Inc. in South Kingstown, has a thriving market with loyal customers.
But a large portion of his business was the wholesale sale of products to restaurants, which have been shuttered. Siravo said he expected he would have to lay off as many as 12 workers, and he was heartbroken about it. If the restaurants were being closed for only a few weeks, it might not be an issue. But, Siravo said, no one knows when the crisis will end.
“The main problem is, no one really knows how long, how far, how crazy this will be,” he said.
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
