Small Businesses and Consumer Spending During COVID-19

Masks hanging on doorknob

As the effects of coronavirus seep into every corner of our lives, we’re faced with change.  Wearing masks, celebrating birthdays with drive by parades, and being cognizant of other’s personal space while in public are just some of the ways we’ve seen our normal disrupted. 

A visible divide between the haves and have nots has also shown itself in broad daylight.  On April 15th, just one month after the Paycheck Protection Program was enacted, the NY Times reported that the $2.2 trillion fund was out of money and falling short in getting money to small businesses who needed it most. (1)

Catering to a changed demand

Small businesses across the country have had to rethink their strategy and pivot to new business models to meet the changed expectations of customers.  Restaurants having had to close their dining rooms now offer curbside pick up.  With retail shops, and restaurants beginning to re-open at diminished capacities, independently owned establishments have to shoulder the cost of CDC recommended PPE (personal protective equipment) for their staff and customers.

Farmers face similar hardships with corporate demand falling or failing altogether. They’ve have had to resort to creative new ways of getting their food into the hands of consumers. Farms with established CSA’s (community supported agriculture programs) have seen demand spike as people seek new and reliable alternatives to the grocery store. 

Quarter Spring Farm, a small farm in Liberty, TN increased their chicken production as demand for meat increased with the news of shortages from industrial suppliers.  Restaurants have expanded offerings to include farm boxes full of fresh produce from local farms, and pantry items like freshly milled flours, artisan olive oil, organic legumes and other delicacies available for curbside pick up and creative thinking. James Beard Award winning chef and co-owner of Blue Hill at Stone Barns in Tarrytown, NY, Dan Barber, created a CSA program called ResourcED. (2) Chef Barber fills his boxes with delectable food from local farms in the Hudson Valley and includes suggestions on how to prepare each item. His hope is to support the farmers he sources from to help them survive the downturn. Farm boxes also give home chefs the opportunity to cook with new ingredients and experience the seasonal bounty at home.

Household Budgets Tighten

Upwards of 44 million Americans having filed for unemployment since the pandemic began, for many necessitating a reprioritization of spending. In April, the New York Times published an article showing how consumer spending changed with the onset of the pandemic. Travel and shopping were the hardest hit while grocery store and e-commerce sales have soared. (3) The decrease in consumer spending is being felt across the board and having a direct impact on the future of small businesses.  In a recent CNBC article, Founder & CEO of Foresight Research, Deborah Weinswig sited that upwards of 15,000 stores are expected to close in 2020 due to coronavirus. (4)

Small businesses add diversity and integrity to communities across the country.  They contribute to the local economy by creating jobs. Conversing with the local shop owner who lives and works in the community is something that can’t be replaced by a corporation. Small businesses contribute to the local economy in ways that large corporations can’t. Engrained in the everyday life of a town, local business owners contribute knowledge, empathy, and often support programs to benefit residents. In an effort to help small businesses persevere, city programs and non-profits are being created to help those failed by the PPP program.

Locally focused non-profits are offering solutions for retaining employees, sharing information and giving consumers a way to help their favorite businesses. Tennessee Action for Hospitality (5) was created by independent restauranteurs to form a united front to advocate for relief and allow for donations.  Asheville Strong (6), created by Catherine Campbell, introduces you to Asheville’s small business owners through video stories. The site gives consumers the access to purchase gift cards and is working on other long term, sustainable strategies for supporting their businesses. The San Francisco Business Times published a resource list of non-profits and companies offering support to businesses affected by the pandemic. (7) If you’re looking for ways to support your favorite businesses, call and ask what they’re offering during the pandemic. You can also check your city’s website for programs and information to get support or to get involved. 

The COVID-19 pandemic has brought heartache and strife to consumers and businesses alike. In the face of great difficulty it’s essential that we support local, independently owned businesses. Purchase a farm box from your favorite restaurant, find a local butcher shop, give gifts cards to local restaurants as gifts for friends and family. Supporting local shops helps ensure their survival and continued contribution to cities across the U.S.


  1. https://www.nytimes.com/2020/04/15/us/politics/coronavirus-small-business-program.html
  2. https://www.bluehillfarm.com
  3. https://www.nytimes.com/interactive/2020/04/11/business/economy/coronavirus-us-economy-spending.html
  4. https://www.cnbc.com/2020/03/16/retail-store-closures-in-the-us-could-explode-because-of-coronavirus.html
  5. https://tnactionforhospitality.com
  6. https://www.ashevillestrong.com
  7. https://www.bizjournals.com/sanfrancisco/news/2020/03/27/here-are-resources-nonprofits-and-private.html

Author Details

Jen Culler Liepis

Jen is the founder of Love Local.