1 Year Later: Some Business Sectors Hurt More Than Others During COVID-19 Pandemic

Thursday, March 11 marks one year since the World Health Organization declared the coronavirus outbreak a pandemic. The shutdowns we saw last year had a massive impact on the economy and devastated some sectors much more than others.

Fry’s Electronics started in 1985 and operated 31 stores in nine states. But last month, the company decided to close its doors for good. "It's very sad to see Fry's going down like this," says Sundeep Boora, a customer.

Many brick-and-mortar retailers were struggling before the pandemic. Now Fry’s joins a list of well-known apparel and department stores, like Brooks Brothers, Modell's Sporting Goods, and Victoria Secret, that were forced to shut down partially or completely in the past year. “It’s unlike anything I’ve ever seen, and I've covered retail for almost 20 years,” said Deborah Weinswig, CEO and founder of Coresight Research.

Weinswig says more than 8,700 stores closed in 2020, and she projects 10,000 more will shutter this year. "The worst is still yet to come," she says. "And several fold, right, it will be permanent store closures, it will be retailers closing flagships where the rent is highest."

Not all brick-and-mortar retailers are struggling. Coresight Research said discount operations, including dollar stores, opened almost 1,700 locations in 2020.

When the pandemic hit, the stock market nose-dived but was able to end the year at record levels. Jobs took longer to recover from the massive shutdowns. The unemployment rate jumped from 3.5% in February 2020 to 14.7% in April 2020, eventually dropping to 6.2% in February 2021. “There's still about 10 million Americans who are officially unemployed,” says Mark Hamrick, a senior economic analyst at Bankrate.com.

Hamrick said jobs are expected to grow this year as life gets closer to normal. But it’s not clear what the new normal will look like: Whether people streaming at home will fill-up movie theaters, if takeout eaters will dine in again, or if business travel returns after a year of virtual meetings. “The question for the future really is how many of those things will stick, how many of those will try to leave behind,” says Hamrick.

There are no questions about online shopping. It’s more popular than ever and will continue to take a toll on traditional retail stores.