Revenue Collapses and the Consumption of Small Business Owners in the Early Stages of the COVID-19 Pandemic

Kim, Olivia S.; Parker, Jonathan A.; Schoar, Antoinette

doi:10.3386/w28151

Cited by 40 publications

(36 citation statements)

References 15 publications

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“…3 Our findings contribute to the scant evidence on the effects of COVID-19 on the sales and revenues of small businesses. Data from the transactions of financial accounts at JP Morgan Chase (JPMC) indicate that small business revenues dropped 30-50% at the end of March and early April and 40% into May (Farrell et al, 2020;Kim et al, 2020). In surveys conducted by the Kauffman Foundation, Desai and Looze (2020) find that 60% of business owners reported lower sales in April and 50% of owners reported lower sales in May.…”

Section: Introductionmentioning

confidence: 99%

The early impacts of the COVID-19 pandemic on business sales

2021

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COVID-19 led to a massive shutdown of businesses in the second quarter of 2020. Estimates from the Current Population Survey, for example, indicate that the number of active business owners dropped by 22% from February to April 2020. We provide the first analysis of losses in sales among the universe of businesses in California using administrative data from the California Department of Tax and Fee Administration. Losses in taxable sales average 17% in the second quarter of 2020 relative to the second quarter of 2019 even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, which lost 91%, whereas online sales grew by 180%. Placing business types into different categories based on whether they were considered essential or nonessential (and thus subject to early lockdowns) and whether they have a moderate or high level of person-to-person contact, we find interesting correlations between sales losses and COVID-19 cases per capita across counties in California. The results suggest that local implementation and enforcement of lockdown restrictions as safety measures for public health and voluntary behavioral responses as reactions to the perceived local COVID-19 spread both played a role. Plain English Summary Business sales dropped by 17% on average due to the pandemic during the second quarter of 2020 in California. Accommodations lost 91% of sales, whereas online sales grew by 180%. Sales fell more steeply in counties with more COVID-19 cases. We examine how much businesses lost in sales using administrative sales tax data. The average losses of 17% in the second quarter of 2020 relative to the second quarter of 2019 occurred even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, drinking places, and arts, entertainment, and recreation. Distinguishing between essential and nonessential businesses, which were subject to early lockdowns, and by the level of person-to-person contact, we find that local implementation and enforcement of lockdown restrictions for public health safety and voluntary responses to the perceived local COVID-19 spread both played a role. The results suggest that small businesses may need more support from governments and consumers to mitigate the strong shift to online vendors, and that the pandemic must be brought under control as a prerequisite to a full recovery. Supplementary Information The online version contains supplementary material available at 10.1007/s11187-021-00479-4.

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Section: Introductionmentioning

confidence: 99%

The early impacts of the COVID-19 pandemic on business sales

2021

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“…Through low-interest loans and grants it incentives investments in the manufacture and use of sustainable systems and products, helping SMEs in their efforts to transition to climate change mitigation, environmental protection and resource efficiency. The programme will provide up to EUR 100 million per year, over a period of three years (KFW, 2020 [97]). Support from supranational organizations has also included green measures.…”

Section: Sustainability and Green Measuresmentioning

confidence: 99%

“…96 On 8 March 2021, the government announced a AUD 1.2 billion in support of wage subsidies to create 70,000 new apprenticeships in businesses. 97 On 11 March 2021, the government announced an AUD 1.2 billion support package, primarily for the tourism industry. 98 The package introduces a new SME Recovery Loan Scheme specifically targeted at SMES that received the JobKeeper payment between 4 January 2021 and 28 March 2021.…”

Section: Australiamentioning

confidence: 99%

An in-depth analysis of one year of SME and entrepreneurship policy responses to COVID-19

2021

OECD SME and Entrepreneurship Papers

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Lessons learned for the path to recoveryThis paper provides an analysis of the impact of the COVID-19 crisis on SMEs and entrepreneurs, and the SME and entrepreneurship policy measures implemented during the course of a year since the start of the pandemic. The paper formulates 15 lessons learned for policy going forward, to assist governments build evidence-based policies to support SME recovery and resilience.

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“…According to the survey from a company, the policy of social distancing caused the increment on delivery orders [3]. In Korea, the number of orders increased about 15% during the 2 nd wave of Covid19 in the mid 1 Industrial and Management Engineering Department, Hankuk University of Foreign Studies.…”

Section: Introductionmentioning

confidence: 99%

On-Foot Hyperlocal Delivery - An Overview, Challenges, and Opportunities: Case Studies in Korea

Yahya

2020

jti

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During the Covid19 pandemic, many local business were struggling to survive. With the rising of click and collect solutions, business strives to survive by offering pick-up points and maintaining the social distance policy. The demand for goods and services of customers are met instantly from the local offline shops via digital platform. Meanwhile, local businesses in a specific geographical area are still striving from the hard times due to least popularity and competitivenes in the services such as delivery. Hyperlocal delivery comes into the logistics industry to meet the issues from local businesses. While the hyperlocal delivery terminology is still new, there have been some real world practices. This study attempts to define the hyperlocal delivery and explore multiple case studies to analyze the on-foot delivery as a rising of quick commerce in the gig economy. The multiple case studies will take place on the hyperlocal delivery business models in South Korea. The overview of the hyperlocal “on-foot” delivery will be described in four dimension of analysis; strategy, customer, cost-revenue, and process model. At the end, some research challenges and opportunities are presented to show how the research communities can contribute to the field

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Revenue Collapses and the Consumption of Small Business Owners in the Early Stages of the COVID-19 Pandemic

Cited by 40 publications

References 15 publications

The early impacts of the COVID-19 pandemic on business sales

The early impacts of the COVID-19 pandemic on business sales

An in-depth analysis of one year of SME and entrepreneurship policy responses to COVID-19

On-Foot Hyperlocal Delivery - An Overview, Challenges, and Opportunities: Case Studies in Korea

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