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Local News

“It’s a ghost town. It’s terrible.” Retail sales expected to fall off a cliff during pandemic

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Kris Noble is executive director of the Sauk Valley Chamber of Commerce in Sterling and she’s not looking forward to July. By that time, Springfield will have released Sauk Valley’s spring sales figures and she expects the March and April totals to crater because of the novel coronavirus.

This time last year, Sterling-Rock Falls generated about $140 million in sales over a two-month span, according to state data, and this year’s totals will fall well short of that because of anti-infection rules that have all but silenced the cash registers. Noble can only wonder how bad the numbers will be.

But there is another group of businesses feeling pain that won’t be reflected in the pending retail numbers: Service providers. Dentists and chiropractors are outside the retail spectrum but still form the backbone of the service economy need support.

“We know our mom-and-pop shops are hurting,” Noble said, “but people forget about the service providers who make up the big part of our membership [and] are either doing less business or not getting the walk-ins.”

Trouble is, there is no snapshot data available to gauge how service providers are doing. Only retail figures are available to take the temperature of the local economy. Retail data may provide only an incomplete picture, but the numbers on file with the Illinois Department of Revenue suggest big losses await our cities when the state tabulates a spring virtually wiped out by COVID-19.

In La Salle County, for example, the city of Peru sits at the crossroads of Interstates 80 and 39 and has a bustling retail corridor that draws from miles around. March and April sales typically bring in $88 million, or about 15% of what the city draws in a strong sales year. The city’s usually-reliable stream of retail receipts has helped keep property taxes in check.

Bob Vickrey is Peru’s economic development coordinator and he’s sure of one thing: Peru won’t ring up $88 million this spring, not even close. Vickrey expects to cringe when the March-April sales totals come in this summer, but until then there’s no way to project how steep the losses will be.

“These are concerning and unprecedented times, so how do we quantify anything?” Vickrey said. “But you have to stay in the game. You can’t skate around the puck, we have to fight for it. Businesses have five-year plans and they’re always looking to next year. And that’s what we have to do.”

Joliet has an additional problem: The casinos are closed and gaming revenue has ground to halt.

Mike Paone, vice-president of the Joliet Region Chamber of Commerce and Industry, said he’s no more able than his peers to pinpoint the loss of retail sales revenue but the loss of gaming revenue was readily available.

“They’re losing about $43,000 a day in casino revenue, so that’s almost $1.3 million a month,” Paone said. “And that doesn’t include the regular sales tax, hotel-motel taxes and fuel tax.

“I wish I knew the exact numbers but the city of Joliet is losing $1.3 million in casino revenue and that’s plenty.”

Geneva Mayor Kevin Burns said the challenge is that state sales tax comes in three months after the fact. Cities just got their Christmas sales figures in March. Any projection on the sales hit during coronavirus would be little more than a wild guess.

“What’s the crystal ball look like? Responsibly, murky,” Burns said. “We have no idea other than we are weekly assessing the impact based on ... the reality of what we know to to be open and closed and based on the previous year’s numbers. We continue to make estimates as best we can. It is far from perfect.”

Geneva is in a better position financially than perhaps other municipalities, in that it has increased its reserve fund for 150 days of operations. This was built up gradually in the last 10 years, Burns said.

Lynn Caccavallo, president and CEO of Cary-Grove Area Chamber of Commerce in McHenry County, said the winter blues usually stoke a need to get out and shop once the grass turns green.

“People are usually ramping up for the warmer months with outdoor purchases such as landscaping, furniture, larger outdoor projects, new homes, etc.,” she said. “Generally, the weather is nicer and people start getting outside more, going places and doing things after the long winter months.”

That’s doubly true in Utica, which sits at the edge of Starved Rock and Matthiessen state parks and benefits from foot traffic, which is highest in nice weather. Revenue data suggest village businesses would have rung up $3 million in sales were it not for coronavirus – and that’s more than the village brings in through Christmas shopping.

“When the parks shut down, everything shuts down,” said John Pappas, president of the Utica Business Association. “It’s a ghost town and this is when things start to come to life in Utica. It’s terrible.”

But Pappas reported that no business owner has so far communicated being on the brink of collapse. And Utica has had worse springs. March and April have dealt the village major setbacks – a 2004 tornado, record floods in 2008 and 2013 – and each time the village business community proved its resiliency.

Caccavallo said her business owners she’s spoken with also are staying positive. It takes a strong stomach to risk one’s life savings in a business and everyone recognizes this is a medical crisis that will subside.

That said, there was no better or worse time for the coronavirus to have struck – period.

“The economy was in a great place with record low unemployment and businesses and communities thriving,” she said. “Every month is important to businesses so there never would be a better month than another for this to have happened.”

• Brenda Schory, staff Writer for the Kane County Chronicle, contributed to this story.

• Tom Collins can be reached at 815-220-6930 or Tcollins@shawmedia.com. Follow him on Twitter @NT_Court.

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