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A Site Selection Web Exclusive, September 2020
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Have Years of Darwinism in Rural America Paid Off During COVID-19?

ONLINE INSIDER
Rural community leaders know from years of experience how to develop creative solutions with scarce resources.
Photo: Getty Images

By Lacy Beasley, Retail Strategies

“It’s not the strongest of the species that survives, nor the most intelligent that survives. It’s the one most adaptable to change.”— Charles Darwin

Lacy Beasley
Lacy Beasley, President, Retail Strategies

As cities reel from a public health crisis and civic unrest, rural and small town community leaders are the unspoken heroes during the COVID-19 pandemic. They have historically learned how to thrive through fostering creative connections between limited resources and community needs. Years of practice navigating threats and finding solutions keeps rural America surviving, even amidst a pandemic.

Progressive rural community leaders developed a task force in March. They used frequent and clear communication on the local plan. Rural America applied well-practiced skills listening to citizens, health care professionals, business owners and educators to make decisions right for their own communities, regardless of national trends.

“Partnering with county officials and local governments, we were able to craft processes that allowed our local economy to thrive through responsible implementation of how individual industry sectors should operate during the ‘shutdown’ without negatively impacting the livelihood of revenue generators and goods producers,” said John W. Feary, executive director at the Claremore Industrial & Economic Development Authority in Oklahoma.

Creativity on Display

Initiatives to help small business included assistance with CARES Act funding, cash grants, low interest loans, restaurant guides, gift card programs and waived permits and fees. 

In Seabrook, Texas, a community with a population of 11,952 in the Houston MSA, Mayor Thom Kolupski and the Seabrook Economic Development Corporation launched the #StayHomeSeabrook Dining Contest. The contest awarded the top five households that submitted the most Seabrook restaurant April receipts with gift cash certificates.

“The program had a two-pronged approach toward helping our local businesses,” said Paul Chavez, economic development director for the City of Seabrook. “The first was to encourage people to explore the dining options in our community… And the second … encouraged people to return and experience Seabrook again.”

Phelps County, Nebraska, took this idea even farther with a Magic Multiplier gift card program that matched gift card purchases dollar for dollar to qualified small businesses. Peachtree Corners, Georgia, deferred payments on taxes and licensing fees. Many communities such as Leander, Texas; Lincolnton, North Carolina; and Newport, Arkansas, offered financial assistance through grants and low interest loans. Restaurant guides were the commonly adopted initiative, complete with information on hours, delivery service provider, and curb-side pickup instructions. Rosemont, Minnesota even created a Restaurant Takeout Bingo.

National Scares vs Rural Realities

Main Street America estimates 7.5 million small businesses are in danger of closing by the fourth quarter of 2020 as a result of the COVID-19 crisis.

“We have not lost a single business during the closures, which was a major concern due to how tight many small businesses have to operate while maintaining cash-flow,” said C. Seth Sumner, city manager of Athens, Tennessee.

Of the CARES Act Payroll Protection Program’s $600 billion issued, retail, accommodations and food service accounted for 15% or $82.5 billion.

Sumner continued, “I am cautiously optimistic and will be watching our local economic indicators closely over the next few months to see what the higher level of unemployment, how PPP plays out, and how the end of the extra unemployment benefits will affect retail sales for our rural area, but so far our economy continues to show strength and growth.”

Adam Leath is the managing director of Leath Company, which owns and operates the Hampton Inn located in the Town of Benson, North Carolina. Occupancy levels in June 2020 were 22% higher than the surrounding primary markets.

“We are lucky that we are not in the group at risk of losing their property, and I would attribute the reason this is the case is that we are in a rural market,” said Leath. “It’s worth noting that [Benson] is a market that many lenders would consider a tertiary market … from which these lenders tried to steer us away. While we have not escaped the impacts of coronavirus, we are one of the lucky ones that has been able to navigate it.”

Why is Rural Faring Better?

Since April 2020, rural America has noticed minimal decline, and even increases, in sales tax revenue collection.

“COVID-19-related business closures may have a longer-term effect locally, but so far many rural economies have not been drastically damaged. April was the height of temporary business closures, and our community only saw a 2% decrease in sales tax collections, and in May we were actually up 8% over the same month last year,” Sumner says of Athens, Tennessee.

The rural retail category mix fared well during pandemic months, such as grocery, general merchandise, fast food and home improvement. This is compounded by work-from-home-adjusted consumer behavior and online sales tax collections.

Feary sums up the rural survival phenomenon, “During this pandemic rural communities have enveloped their friends and neighbors who are the small business owners and backbone of our cities and towns. At the end of the day it's people that make a difference … which is evidenced by consistent sales tax growth.”

The Job Isn’t Finished 

Federal financial programs associated with COVID-19 have provided stopgap support but may ultimately offer limited relief as the public health crisis looms large in the minds of consumers. Elected officials and professional city staff will continue to face many challenges reopening their communities.

The first challenge is to support the marketplace that is still open and operating. The second challenge is to restore the marketplace by recruiting new businesses that bolster the goods and services offered in the community that were lost due to COVID-19. Localities must proactively seek opportunities to revitalize their marketplace while creating safe spaces for commerce to take place.

“Equipping business owners with the tools, technical assistance and resources needed for financial relief, clarity on how and when to shop, and developing strong messaging campaigns on health and safety measures for consumer confidence will be critical for success moving forward,” said Jenn Gregory, president of Downtown Strategies.


Lacy Beasley is president of Retail Strategies, a national advisory firm based in Birmingham, Alabama, that is focused on retail market analysis, strategic planning, retail recruitment and development. Visit retailstrategies.com for more information.


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