Small business breaking point

(First published in the May 7, 2020 issue of City Pages)

A Wausau River District survey revealed that more than half of downtown businesses would shutter if the coronavirus lockdown continues through summer. How some are surviving for now, barely.


The Milk Merchant owner Mary Gallagher holds up a new beer she sells from Ale Asylum, outside her business prior to a Friday pickup day.

It has been less than a year since Mary Gallagher bought and revamped a local cheese shop into what’s now called The Milk Merchant, on Second Avenue in Wausau. Customers praised the fresh new look, and appreciated her continuing the area’s only gourmet cheese store. This spring, Gallagher was due to give birth March 20. She planned to close The Milk Merchant for about a week, and then let her employees take over for a few weeks until she returned to work.

She ended up delivering her baby boy —she and her husband’s second son— on March 17. Her business closed that day and hasn’t reopened since. Gallagher ended up in the hospital right around the time the coronavirus pandemic started to spread across the U.S. and concern about its widespread impacts was starting to grow. Wausau area schools were closing, and Wisconsin’s stay-at-home order began the next week, on March 25.

During her previous pregnancy, Gallagher spent five days in the hospital; this time she was out in two. Only one visitor, her husband, was allowed and after he was screened to make sure he wasn’t sick.

Gallagher had a front row seat to the coronavirus pandemic’s emergence as hospitals changed their procedures, and then as a shop owner in the Wausau River District as most businesses closed in response to the pandemic and subsequent shut down orders.

A month into the lockdown, a survey by the Wausau River District showed that nearly half of the businesses and organizations in the downtown area say they will go under if the Safer at Home order lasts five months—that is, through the end of August. Some expect their businesses to go under even earlier.

Several owners and operators who spoke with City Pages confirmed that. Most say they’re finding a way to get by, surviving for now by just a thread: cutting staff, relying on minimal pickup orders, special orders from loyal customers. A long term continuation of the Safer at Home order will prove devastating to businesses in the district.

Wausau River District Executive Director Blake Opal-Wahoske wasn’t satisfied with national and state statistics. What was going on locally? “It’s really important for us to get that local data to tell the story about why it’s important to support local businesses.”

The survey was sent out between April 14-20, and the data was surprising. It showed Wausau’s downtown area is being harder hit than the state and national averages were showing. Even unemployment was a bit higher than those averages, Opal-Wahoske says.

That makes sense though. Data from the Marathon County Life Report showed a much higher than average employment base was comprised of the service industry. That sector is the hardest hit because many of those jobs can’t be performed at home, and are the most likely businesses to see layoffs in a recession.

The survey results:

•   Roughly 4% of the river district’s businesses surveyed said they would go under in less than a month under the Safer at Home restrictions;

•   22% would fold in one to two months if the lockdown continues

•   23% would shutter in three to five months

•   21% would close after five months

•   32% said the lockdown is not a concern.

Also stark: loss of revenues at those businesses. Of those surveyed, nearly 60% said their revenue decreased by more than 75%, and another 11% said it decreased by 50-70%. Hardly anyone said revenues remained normal.

And if that’s not enough, one more sad aspect the survey found: Nearly half the employees in the river district are at risk of becoming unemployed as a result of the shutdown.

The situation is constantly in flux, Opal-Wahoske points out. Since the survey was sent out, the governor’s orders were extended, but with looser restrictions that allow many retail operations to have curbside pickup.

And much confusion at the time of the survey abounded around the federal Payroll Protection Program, but now some businesses are starting to receive those funds. Future surveys will be planned.

“Those numbers are not set in stone,” Opal-Wahoske tells City Pages. “We will see how it evolves.”

Loyal, concerned customers

Gallagher has since started offering curbside pickup at The Milk Merchant. Last Friday, May 1, she held the second of the shop’s pickup. Masked employees along with Gallagher herself put together orders inside while customers parked outside, calling the business to let them know they were there.

Gallagher cut down on the varieties of cheese she carries, simplifying her inventory to make up for the lost sales. She definitely lost inventory when some cheese went bad during the shutdown.

One of the products she now offers for the Friday-Saturday pickups are quarantine care packages, with either American or European selections of fancy cheeses and wine. One can add a bottle of Timekeeper’s hand sanitizer to their order. Another add on: A beer from Ale Asylum in Madison called “FVck Covid.”

“Well, I’m hoping it doesn’t last too much longer,” Gallagher says of the shutdown.

And she’s luckier than most. The Milk Merchant is not her family’s main source of income, and she thinks the store will be okay if it at least can continue pickup orders.

Next door, Dion Starck has been doing his best to ramp up online sales with October Guitars. Having been in business for decades, he has a number of regular customers who are happy to buy a guitar or some gear to help keep him in business. Most guitar shops today have taken to selling online anyway, Starck says, so adjusting to the lockdown mostly was a matter of adding inventory and listing more. “They feel like they love coming into my store and want to make sure I’m still here,” Starck says of his loyal customers. “They might email or call and say ‘You know what? What do you have in an acoustic between $3-500? I thought about buying one and I wanted to buy it from you.’”

But that can’t last forever. Since five months seems to be the cutoff where more than half of downtown businesses said they would likely go under, I asked Starck about that time frame. “Three months would be pushing it,” Starck says. “Five months would be difficult to survive.”

Campbell Haines Menswear, located kiddy corner to The 400 Block, is experiencing a similar phenomena to October Guitars. Many long-time customers are reaching out to them to buy merchandise, says co-owner Ken Haines. “They’re eager to see us survive.”

It helps that Campbell Haines knows their customers well and keeps records of their measurements, which makes finding fitting clothes possible, Haines says.

He and co-owner Patrick Campbell have cut back the store to “just about nothing,” and neither are taking a salary. Other than helping customers by phone or email, and doing curbside pickup appointments, the business is in a holding pattern.

Haines says the business could probably survive five months under the current conditions. But, “if we have a fall Safer at Home order, we will have to review all other options,” Haines says.

The difference between those businesses being able to make it and those struggling to survive often boils down to who has received the federal Payroll Protection Program money, and who hasn’t, says Mark Craig, manager for Compass Property, which owns several buildings in the downtown area and has scores of tenants, from storefront restaurants to small business offices. He also observes that businesses with a strong online presence prior to the shutdown are tending to do better than the ones who didn’t. “It didn’t flow to them all,” Craig says. “It’s a mix. Some are doing really well, and some are really struggling.”

Interestingly, Craig still is seeing interest in some of their properties. He showed a few spaces in City Square last week, and showed a potential tenant the former Blonde and Beyond space on the 300 block of Third Street.

Restaurants that chose to stay open—and some did not— have had to embrace takeout and delivery options.

Craig says it might be a good idea for the city to start making changes downtown to better accommodate order pickup, or even allow more space for outdoor seating for people to eat restaurant meals while still maintaining social distancing. It’s likely that’s going to become part of the norm for awhile, Craig says.

Compass and partners such as the Greater Wausau Chamber started a virtual tip jar recently, and the group is planning to do more of that type of promotion this month because it had a big impact on businesses. The plan is to cover the costs of delivery so every order’s delivery is free for the customer.

How are downtown restaurants downtown doing? Adam Jamgochian, owner of new restaurant Ciao, put it in a wry, succinct way: “Well, I’m not getting rich.”

Jamgochian told City Pages. “We seem to be sustaining. We’re making ends meet to pay the bills.”

Jamgochian reacted early in that partial lockdown week when restaurants were allowed to have dine-in service, but at reduced capacity. Ciao installed sanitizing stations in the restaurant and instructed wait staff immediately and thoroughly wiped down surfaces as often as possible, so that customers would feel safe seeing the precautions that were taken. But that lasted a little more than a week, before the full shutdown order came and restaurants were allowed to offer only takeout food.

Jamgochian took the week to figure out how Ciao would proceed. He conferred with the owners of the new restaurant across the street, Lemongrass, and learned Mondays and Tuesdays were especially slow. So he opened Ciao for takeout and delivery Wednesday through Saturday, from just 4-8 pm.

And he made it clear to his staff: If they wanted to work those shifts, they needed to practice good social distancing in their off hours. “‘You can’t be going out and partying with your crew after work,’” Jamgochian told them. “‘You need to go home and be with your family.’”

Business has varied. Some nights they might do 70-80 orders; other nights more like 10. Friday by far has been the busiest. “People are generally sick of cooking, so they pick a restaurant at the end of the week,” Jamgochian says.

But in an industry with already notoriously small margins, surviving on carryout orders means barely getting by. The high quality containers and packaging costs about $1 per meal for Ciao, Jamgochian says, and not having alcohol sales “is tough.”

Ciao will likely survive, Jamgochian says, and the survival of all the businesses downtown will depend on them working together— from partnering on promotions to landlords resetting lease rates. “If we move forward together, rather than an individual approach, that will make the difference.”