By Chris Blasinsky
ALEXANDRIA, Va.—Gene Marks closed out 2019 with an article in The Hill stating this: “I’ll predict that for the majority of small businesses, 2020 will be a pretty easy year.”
Like most business owners and operators, Marks, a small business owner himself as well as a journalist and technology and financial management consultant, could not have predicted the economic turmoil caused by a global pandemic just nine months ago. However, he does make a forecast in his December 31, 2019, article about the upcoming November elections that has withstood the test of time (more on this in a forthcoming article in NACS Magazine):
“A new administration may mean much higher taxes, significantly more regulations, more expansive government oversight and a disruptive overhaul of our health-care system. …But that’s not until 2021. If you’re running a small business, you should appreciate the easiness of 2020. Just make sure to save your profits somewhere. You might need those savings in the near future.”
Today, that future is here.
Fast forward to a global pandemic and an economic crisis with extraordinary levels of uncertainty since mid-March, to an election cycle in November with just as much uncertainty surrounding the incumbent as the opponent. Schools are deciding whether to open or move to a virtual learning environment, COVID-19 cases are rising and the threat of quarantine looms as more hot spots emerge.
All this uncertainty, noted Marks, who kicked off the Conexxus Annual Education and Strategy Conference this week, is impacting small and mid-size business owners and operators in ways most have never experienced before, let alone planned for. That said, convenience retailers have a shared responsibility for their employees, customers, partners, suppliers and communities that depend on them for their livelihood. “We have to make the right decisions going forward,” he said, outlining some of the issues and tools that can help retailers strategize the next few years and beyond.
Everyone wishes they had a crystal ball to say when the economy will recover. But Marks suggests not putting all the eggs in one basket when it comes to headlines for information. Instead, follow the data and use these seven resources that he relies on to gain a better sense of how the economy is fairing, and how these metrics could factor into strategic business resiliency planning and investment decisions:
- The state of the restaurant industry. Are people dining out? OpenTable summarizes data from restaurants on its platform and updates it daily. The data index two things: the overall impact of COVID-19 on the industry by showing year-over-year seated diners across all channels, and a comparison of year-over-year seated covers to demonstrate where recovery is starting to take shape.
- Airline travel: How much are people traveling? By looking at the number of passengers going through TSA checkpoints, retailers can compare airline travel this year with the same dates in 2019.
- Purchasing power: How is manufacturing rebounding? The Institute for Supply Management surveys purchasing managers on what they are buying and their purchasing plans for the next 30, 60 and 90 days, which can help show how manufacturing is starting to rebound.
- Small business optimism: How is the backbone of the U.S. economy fairing? The National Federation of Independent Business (NFIB) has collected small business economic trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986.
- State of construction: How is your blue-collar consumer base fairing? The National Association of Home Builders (NAHB) is a bellwether for the construction industry, providing economic data on home-building trends and lumber.
- Chemical activity: How about product development? The American Chemistry Council's Chemical Activity Barometer is a macroeconomic indicator that highlights the peaks and troughs in the overall U.S. economy and potential trends in market sectors outside of chemistry.
- Freight costs and movement: Are materials being shipped? The Baltic Dry Index provides a benchmark for the price of moving major raw materials by sea. The index tracks rates for vessels that ferry dry bulk commodities.
Following the trends and metrics collected through these resources can help show where the economy is going and determine when the time is right to make investments and hiring decisions. Otherwise, there are too many unknowns as to whether the economy is or will experience a V-, U- or W-shaped recovery.
There are also other interesting metrics that some prominent leaders rely on. For example, Alan Greenspan tracked the sale of men’s underwear. He suggested that men are more apt to buy new underwear when things are going well. “It’s interesting that they don’t teach a course in the London School of Economics about charting male underpants,” notes a 2008 interview with NPR’s Robert Krulwich.
Marks also noted a list of economists to follow on social media and online, including economics professor Mark J. Perry, Bill McBride of the muddyeconomist.com and author and economics professor Tyler Cowen. “Have metrics and economists you follow,” suggested Marks.
And if you really want to put life in perspective and compare and contrast the U.S. economy of more than 100 years ago with today—especially during the toughest of times—check out Shorpy.com, a vintage photography site featuring thousands of images from the 1850s to 1950s. The site is named after Shorpy Higginbotham, a teenage coal miner who lived 100 years ago.
Content, learnings and networking at the Conexxus Annual Education and Strategy Conference tapped into a central theme of “Surviving & Thriving in the Age of Disruption: How We Responded to the Pandemic.” The three-day event took place virtually and concludes today with a lively discussion featuring Conexxus Executive Director Gray Taylor and Kevin Smartt, CEO of Austin, Texas-based Kwik Chek, chairman of Conexxus and member of the NACS Executive Committee.
Chris Blasinsky is the NACS content communications strategist; she can be reached at email@example.com, and on Twitter and LinkedIn.