The uphill battle Montana Avenue merchants face towards economic recovery may prove as steep as the street itself.
This ominous prospect would not appear obvious to weekend visitors who find the commercial strip buzzing with shoppers and diners. Between rising vaccination rates, spring break, and Mothers Day, foot traffic trends over the past few weeks have indeed been promising.
But if visitors peer past the crowds, they will discover that over a quarter of the street’s storefronts lay empty. Many surviving merchants worry they could be the next to fall
As the threat of Covid-19 recedes, businesses face looming challenges around rent, staffing, and the future of in-person retail.
“There is nothing swift about this recovery whatsoever,” said Peggy Sella, owner of Jane clothing boutique. “It is a crawl and I think I’m not alone in experiencing that.”
Over the past year Sella has seen her business drop as low as 10 to 20 percent of pre-pandemic levels. She has been surviving by paying half rent and bolstering her Instagram and online presence.
While sales are now up to around 40 percent of 2019 levels, it is still not economically viable for the store to be paying full rent. So for Sella, the biggest question is how long her landlord will remain flexible.
Many other Montana mom and pops are in a similar predicament as they have been relying on rent forgiveness or rent decrease policies to stay open.
“People assume that businesses that survived the first year of Covid will continue to make it, but I don’t know if that’s true,” said Owner of Limonaia gift shop Jessica Goldfarb, who has been paying a decreased rent since the beginning of the pandemic. “I think there will be a second closure wave. Rent will go back up and the sales are still not where they need to be.”
Maintaining retail sales that can support Montana Avenue’s expensive rents was no easy feat before the pandemic. The past year has only accelerated the rise of online shopping and put further pressure on retailers margins.
The pandemic has also made it harder for retailers to source their goods due to supply chain disruptions.
“The hardest thing is the shortage of merchandise,” said Jane Walker of Textures sweater shop. “People have gotten Covid all over the world and it has shut down many of the factories in India and Peru that we rely on.”
While Montana Avenue’s retailers are still gradually attracting back customers, business has been booming at restaurants.
“The restaurants are the only reason the street is doing well” said Heidi Dedrick, merchant outreach chair of the Montana Merchants Association, explaining that people will come meet a friend for a meal and then decide to buy a birthday present or stop and get their nails done.
Several restaurants have taken advantage of recent vacancies to open new locations on Montana. This includes beloved brunch joint Breakfast by Salt’s Cure and Japanese eatery Kai Ramen.
Still it is not all smooth sailing for restaurants, as many are having difficulties growing their staff to meet increased demand.
Dedrick said restaurant owners have been struggling to rehire employees as many moved away or found new jobs during the long periods of restaurant closures. Additionally, owners are finding that workers would rather stay on boosted unemployment rates than make similar money working in person.
Some restaurant owners have been struggling for weeks to hire new employees and will book multiple interviews a week to have maybe one person show up.
Leasing activity has been up on the street in recent weeks, with several new businesses looking to move into empty spaces such as Casper mattresses and Lovesac furniture.
In general, greater store occupancy is a positive thing for the street as it boosts foot traffic. The only caveat in this situation is that several of the new openings are chain stores replacing small businesses.
“In the past we’ve always had little mom and pop places, that’s what everyone knew Montana for, but during this time we’re starting to get more big box names,” said Dedrick.
It’s unclear whether this is a short-term trend, or whether the pandemic will have a lasting impact on the number of boutiques and locally owned stores that can make a go of it on Montana.
Clara@smdp.com
