Cover Story Vaccine Nation

VACCINE NATION

AT LEAST FULLY PG # LOCATION 1 DOSE VACCINATED POPULATION

48 Vermont 75% 67.1% 624,313 50 Massachusetts 71.8% 63.3% 6,850,553 52 Maine 67.6% 62.9% 1,335,492 54 Connecticut 68.7% 62.5% 3,575,074 56 Rhode Island 66.1% 60.7% 1,057,231 58 Maryland 63.6% 58% 6,018,848 59 New Hampshire 64% 57.8% 1,348,124 60 New Jersey 64.7% 57.3% 8,878,503 62 Washington 63% 56.8% 7,404,107 64 New Mexico 64.4% 56.3% 2,092,454 66 New York 61.9% 56.2% 19,572,319 68 Oregon 59.9% 55.4% 4,129,803 70 Washington, D.C. 63% 54.1% 692,683 PROFILING THE STATES LEADING THE NATION IN VACCINATION RATES AND SPURRING THEIR ECONOMIC RECOVERIES

Which states are leading the country in their vaccination efforts, and what does that mean for their economies and the industries within them — in particular retail?

With much of the past 18 months filled with grim statistics that accompany a pandemic — more than 600,000 deaths in the United States alone and more than 34 million cases — this month, DSN is looking at states that lead in the more hopeful statistic: the percentage of their population that is fully vaccinated against COVID-19.

Yes, COVID-19 remains a real threat, particularly as the Delta variant surges throughout the country, but states with a high proportion of vaccinated residents also signal the return of their economies. Certainly, retail never went away and indeed served as a critical line of defense in the country’s response to COVID-19, and states reopening means that companies might soon advance with stalled efforts and confidently move forward to meet consumer demands that developed in the last year.

To compile this list, DSN looked at Centers for Disease Control and Prevention data and charts compiled by the Mayo Clinic, choosing the 13 states that lead the country in the percentage of their residents that are fully vaccinated against COVID-19.

VACCINE NATION VERMONT

PHARMACIES AT THE FOREFRONT OF VERMONT VACCINE EFFORT

Vermont has been a leader in the vaccine rollout and retail pharmacies have been at the forefront of that effort from the time the vaccines became available.

The state has fully vaccinated 66.2% of its total population, including 76.5% of people aged 18 years old and older, according to the Centers for Disease Control and Prevention, as of July 9.

Transmission of the virus has been low, with only half a dozen new cases per 100,000 population in the week ending July 9.

“As a Vermonter, I am really grateful with how successful the vaccine rollout has been in our state,” said Lauren Bode, interim executive director at the Vermont Pharmacists Association. “I can’t overstate how much work pharmacists have been doing in the state to make the vaccine rollout a success.”

Bode said she feels that Vermonters are eagerly returning to their pre-pandemic activities, thanks to the success of the vaccine rollout.

“The pandemic feels pretty close to over in Vermont,” she said. “Stores and restaurants are busy. I see a lot of places hiring, and I see people working.”

Vermont, which has the nation’s smallest economy, also has one of the lowest unemployment rates. It was reported at 3.1% in June, compared with 5.9% for the United States as a whole.

The economic recovery in Vermont is proceeding slowly, the Vermont Department of Labor reported.

“Unlike the decline, which was sharp and abrupt, the economic recovery continues to slowly gain back what was lost,” Michael Harrington, Vermont labor commissioner, said in a statement. “The size of the labor force and the number of filled positions in the Vermont economy continue to grow. Vermont businesses are reporting high levels of open positions.”

In a recent report on the Burlington commercial real estate market, Kendra Kenney, a broker with Pomerleau Real Estate in Burlington, said retail space has been starting to bounce back.

“We are seeing both local and national groups reentering the market and ready to sign on for long-term leases,” she said.

Citing data from a June 2021 market report from Allen, Brooks & Minor, Kenney said vacancy rates in Burlington’s central business district have fallen from 8.3% in December of last year to 7.9%, and that the suburban commercial real estate market is also “starting to stabilize.”

Among new food and drug stores that have opened in Vermont was a Hannaford in South Burlington, which was forced to have a subdued grand opening as it coincided with the beginning of the pandemic last March.

Meanwhile Schenectady, N.Y.-based Price Chopper, which operates 15 locations in Vermont, agreed earlier this year to merge with Tops, which has three stores in the state. Both chains operate in-store pharmacies. Included among Price Chopper’s locations are two of its new Market 32 formats — one each in Brattleboro and Burlington — which feature a new, modern look and expanded food service, among other changes.

VERMONT DATA

VACCINATION RATE (AS OF JULY 9)

Total population:

66.2%

Age 18 years old and older: 76.5%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +6.1%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 3.1%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION MASSACHUSETTS

TRAFFIC RETURNS TO MASSACHUSETTS STORES

Asuccessful COVID-19 vaccination rollout appears to be helping drive traffic back to retail stores in Massachusetts, said Saad Dinno, owner of four pharmacies in the Boston area and president-elect of the Massachusetts Pharmacists Association.

“People have been saying they have been a prisoner in their house for over a year, but now they can get out and visit their grandkids,” he said. “It opened things up, almost back to normalcy, and as it was pre-COVID. People are feeling confident and spending money.”

Dinno said that increased consumer confidence has been visible since early May at his four pharmacies, located in the western metro area of Boston.

“We have seen tremendous increases in foot traffic in all four locations that we have,” he said.

His company was also active in the vaccine rollout, administering vaccines in group homes and in low-income housing areas, and has been vaccinating at the store level since April, he said.

According to data from the Centers for Disease Control and Prevention, as of July 9, 62.4% of the Massachusetts population was fully vaccinated, including 73.1% of people aged 18 years old and older.

While the economic recovery has been slower than some states in the South that chose to reduce restrictions, the number of new COVID-19 cases has been minimal, with only eight new cases per 100,000 population in the week ending July 9.

Retail expansion in the greater Boston market is expected to pick up in 2021 after a slowdown last year, according to a recent report from real estate firm Marcus & Millichap.

The report noted that despite store closures in 2020, Boston’s retail real estate vacancy rate was lower than most U.S. metropolitan markets.

“Massachusetts opened vaccinations to all adults on April 19, which combined with warming weather and direct stimulus checks should pave the way for stronger in-person consumer spending at retailers in the months ahead,” the report stated.

About 60% more retail space will open in the Boston area in 2021, compared with 2020, as construction restrictions are reduced and retail vacancy rates will continue to rise amid ongoing closures and scaledback expansion on the part of retailers, according to the report.

Drug chains Walgreens and CVS Pharmacy both have a strong presence in Massachusetts, as do several supermarket chains with pharmacies, including Stop & Shop, which is based in Quincy, Mass., and has 127 locations in the state.

The chain, owned by Ahold Delhaize, recently began testing new temperature-controlled pickup lockers at one of its locations in Boston and has been adding more warerooms to support delivery and pickup. Last year, Stop & Shop converted a store in Brockton, Mass., that had been slated to close into a “dark store” that supports delivery and pickup only — a trend that has been growing in markets around the country.

MASSACHUSETTS DATA

VACCINATION RATE (AS OF JULY 9)

Total population:

62.4%

Age 18 years old and older: 73.1%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +6.9%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 4.9%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION MAINE

INDEPENDENTS SHINE IN RURAL MAINE

Maine’s pharmacists have played an important role throughout the COVID-19 vaccination campaign, said Amelia Arnold, pharmacy operations manager at Augusta-based Community Pharmacies and immediate past president of the Maine Pharmacy Association.

Independent retail pharmacists have played an especially important role in a state that is thinly populated throughout much of its geography, she said.

“In a rural state like Maine, it shows that people are able to seek health care at the pharmacies in their communities and not have to travel long distances,” Arnold said. “For some people, vaccination sites could have been an hour away.”

Maine, as of July 9, had fully vaccinated 62.3% of its total population, including 72.9% of people aged 18 years old and older, according to the Centers for Disease Control and Prevention.

While Walgreens and CVS partnered on the national level to administer vaccines in Maine’s long-term care facilities, independent pharmacies were able to participate in the state’s vaccination effort by working with the Maine Center for Disease Control and Prevention, Arnold said.

Arnold’s company was actively involved in the vaccine campaign, as were many other independents. She cited Bangor Drug Company and Savage’s Drug as examples of other independents that were actively involved in the vaccine rollout.

Their efforts have paved the way for life to inch back toward normalcy in the state, she said.

“We are seeing sustained lower transmission,” Arnold said. “People feel better about going out, and more comfortable going out to shop and out to eat.

“I have small children and I feel comfortable going out with them, more so than even a few months ago,” she said. “It is starting to feel reminiscent of last summer when things were opening, and also before the pandemic.

“It really demonstrates the value that pharmacies bring to the healthcare community here in Maine, so that feels really great to have people feel really grateful for what we as a profession have been able to give them,” Arnold said.

Like many other states, however, Maine is seeing much of its retail space being converted to industrial uses, according to a recent report from local real estate firm Boulos.

Some food and drug retail development is expected, however, including a new 105,000-sq.-ft. Target in Auburn that is taking over the space formerly occupied by Kmart, which closed its last Maine location in 2019.

Another trend cited by the Boulos report is the increasing demand for drivethru retail parcels, both among restaurant operators and drug stores.

“If this trend is any indication of the future of retail, then I believe we will begin to see increased demand and higher pricing for shopping center outparcels and pad sites, where developers can have the flexibility of building to suit the changing needs of a variety of businesses, [including] pharmacies such as Walgreens and CVS,” the report stated.

Another trend that could impact future development is the influx of a working-age population during the pandemic, as many consumers fled large cities in favor of the more bucolic lifestyle that Maine offers.

“It will be exciting to see what they add to the business landscape in our state,” the report concluded.

MAINE DATA

VACCINATION RATE (AS OF JULY 9)

Total population: 62.3%

Age 18 years old and older: 72.9%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +5.2%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 4.8%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION CONNECTICUT

CONNECTICUT’S ECONOMY SEES RECOVERY ON HORIZON

Connecticut’s large network of chain drug stores and its independents played a vital role in the state’s successful COVID-19 vaccination efforts, said Nathan Tinker, CEO of the Connecticut Pharmacists Association.

“They were on the front end of that deal with the government, and that really got the vaccine into the community at a pretty quick pace,” he said.

Connecticut has one of the highest rates of vaccination in the United States, with 73% of the state’s population aged 18 years old and older fully vaccinated as of July 9 and 61.5% of the population overall fully vaccinated, according to the Centers for Disease Control and Prevention.

Tinker said the state’s high vaccination rate has translated into more confidence among the population and lower ongoing infection rates.

“People were willing to get vaccinated in order to get back into the ‘real world,’” he said.

Although some independent pharmacies were particularly hard hit by the pandemic early on, Tinker said he believes they are benefitting from a “return to normalcy.”

In addition, chain drug stores in Connecticut “have been as busy as I have ever seen them,” he said.

“It is great to see people getting back to that level of comfort in the community,” Tinker said. “The stores are doing a good job of telling their story that they are safe and ready to get back to business.”

Like many states in New England that were relatively slow to ease restrictions meant to stop the spread of the virus, Connecticut’s economic recovery has lagged behind some states in the South and Midwest that opened up their economies more quickly. However, as the year goes on, the outlook is improving.

Connecticut has recovered 64.6% of the 292,400 jobs lost in March and April of 2020, the state Department of Labor reported in July.

“Even with some recent weakness, construction and retail trade have regained 70% or more of the jobs lost during the pandemic,” said Patrick Flaherty, director of the Connecticut Department of Labor Office of Research, in a statement.

Many of the abandoned retail spaces in the state that have proliferated during the pandemic, however, may end up being converted to new uses, according to a recent report from consulting firm Pullman & Comley.

“Confronted with the challenges of replacing failed anchor tenants and an over-retailed environment, a number of owners are converting their underperforming malls and retail centers into warehouses and distribution centers to meet the demand for last-mile deliveries from e-commerce and surviving brick-and-mortar retailers,” the report noted.

Amazon, for example, launched several distribution sites in Connecticut last year and has 3 million square feet of distribution space in the state, with plans to add more, according to the report.

CONNECTICUT DATA

VACCINATION RATE (AS OF JULY 9)

Total population: 61.5%

Age 18 years old and older: 73%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +6%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 7.9%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION RHODE ISLAND

CVS HEALTH’S HOME STATE HAS SUCCESSFUL VACCINE ROLLOUT

As the home state of CVS Health, Rhode Island has been in a strong position to benefit from a successful vaccine rollout.

The state, which also is the smallest in the nation in terms of its geographical size, had fully vaccinated 59.7% of its population by July 9, including 70.3% of people aged 18 years old and older, according to the Centers for Disease Control and Prevention.

“We took advantage of our smallness, but we also developed some very good partnerships early on for testing that led to strong relationships when it came time to deliver the vaccine,” said Matthew Lacroix, immediate past president at the Rhode Island Pharmacists Association.

The owner of one of the state’s leading independent pharmacy operators, Eugenio Fernandez of Asthenis Pharmacy, was on the state’s COVID vaccine subcommittee, he said.

The industry has made a concerted effort to reach underserved communities in the state and has had some success, Lacroix said.

“Because we have such a high percentage of people who have been vaccinated, we are not as worried about the Delta variant, or having to reopen field hospitals and those types of things,” he said. “And we don’t have widespread community spread.”

“Retail pharmacies were the leaders early on, and they have been carrying it,” Lacroix said.

A recent report from Rhode Island real estate firm Hayes & Sherry found that retail has had mixed results in the state, with store development for many businesses “stagnant.”

“However, access to vaccines, improved daily coronavirus testing counts, and consistent government stimulus have started to produce increased market optimism,” the report stated.

The report also noted that retail vacancies have increased somewhat due to store closures and the growth of e-commerce.

“Since April of 2020, available retail space in Rhode Island only increased from 9.1% to 9.6%, showing retailers’ determination to persevere through the challenging environment,” the report said. “The overall retail vacancy has been slowly increasing for several years, as the consumer trend of buying more online is not a new one, but it has been accelerated by the pandemic.”

A report from Capstone Partners, meanwhile, highlighted the opportunities for some retailers, including those offering drive-thru services.

“While retail has been challenging, buyers continue to search for the best locations, and opportunistic retail and food services are completing lease transactions,” the report said. “Properties with drive-up windows are in strong demand.”

CVS Health, meanwhile, began rolling out its new CVS HealthHUB format in Rhode Island last year as part of an aggressive nationwide expansion of the format, which offers expanded healthcare services. The chain opened 650 HealthHUBs in total last year and plans to have 1,500 of them by the end of this year.

RHODE ISLAND DATA

VACCINATION RATE (AS OF JULY 9)

Total population: 59.7%

Age 18 years old and older: 70.3%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +7.2%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 5.9%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION MARYLAND

MARYLAND’S PANDEMIC FUNDING HELPS BUSINESS BOUNCE BACK

At the onset of the summer, more than 75% of Maryland’s residents over the age of 18 years old had received at least one dose of the COVID-19 vaccine. Getting seniors vaccinated has been one of the state’s priorities and by mid-June, 90% had received at least one dose.

As of July 1, all emergency mandates and restrictions related to COVID-19 were lifted in the state. Masks are no longer required in any setting except for public transportation. It’s up to each business and workplace to establish a policy for wearing face coverings.

Like other states, Maryland’s retailers and restaurants were hit hard by the pandemic, causing several companies to close their doors for good. Included on that list is Lord & Taylor, Modell’s Sporting Goods, Pier 1 and Papyrus. Other retailers decided to scale back operations and closed some or all of their Maryland locations, including Macy’s, Nordstrom, Sears and Sur La Table.

To help get the state back on its feet, Gov. Larry Hogan launched Project Restore, a $25 million economic recovery initiative to help small businesses and commercial developers revitalize vacant retail and commercial space. The program is expected to draw new business to the area and create thousands of jobs through rental subsidies and sales tax rebates.

However, as other states are finding, a key challenge to businesses reopening is finding available help. Despite the loosening of coronavirus restrictions and clamping down on unemployment benefits, the state has been facing a labor crisis for some time. Desperate for workers, many local businesses are turning to signing bonuses to attract new employees. According to the Maryland Retailers Association, for many employers, the employment shortage is causing some businesses to cut hours to the point of closing a day or two per week.

The Maryland Restaurant Association predicts it could take three to five years before the restaurant and food service industry in the state reaches full recovery.

According to Kenneth Holt, secretary of the Maryland Department of Housing and Community Development, to date the state has awarded more than $1.78 billion in pandemic-related funding to assist nonprofits, businesses, tourist venues, entertainment, homeowners and other Marylanders in need.

Thanks to these and other efforts, some retailers can return to their growth plans. As part of its $500 million expansion strategy, German grocer Lidl announced it will open 10 new stores throughout Maryland by the end of 2021. Its most recent opening in Columbia is Lidl’s 17th location in the state. Additionally, the company opened a regional headquarters and distribution center in Perryville last April. The new 700,000-sq.-ft. facility will serve as the backbone of Lidl’s regional store network, supplying products to stores in five states. Lidl invested more than $100 million in the project, which created more than 200 new full-time jobs.

This summer, a new At Home store is expected to open in the former J.C. Penney site in Glenarden. The home décor superstore will set up shop in the 96,000-sq.-ft. space and carry more than 50,000 SKUs of private label, unbranded or specially designed home goods. The Woodmore Towne Center location also features Wegmans, Costco, Chipotle and Starbucks.

MARYLAND DATA

• In 2020, Maryland’s GDP was $422.7 billion, 15th in the

nation and down from $426.7

billion in 2019. The largest sectors in 2020 were finance, insurance and real estate, followed by government, and then professional and business services.

• Information technology, telecommunications, aerospace and defense are leading forces behind Maryland’s economic growth. The state is a noted leader in biotechnology and is at the center in the mapping of the human genome and commercial applications that result from its research.

VACCINE NATION NEW HAMPSHIRE

NEW HAMPSHIRE ECONOMY AMONG NATION’S BEST

New Hampshire has long had a healthy economy, and it appears to have weathered the pandemic well.

“Based on our discussions with retailers, people seem to be coming back into the stores,” said James Prieto, director of real estate at Granite Commercial Real Estate. “There is a high percentage of the population in southern New Hampshire that has been vaccinated, and customers want to get back into retail stores. We are seeing in-store retail sales increase, and that goes for drug stores, grocery stores, restaurants — all of the retailers we are talking with say customers are coming back in person.”

According to the Centers for Disease Control and Prevention, as of July 9, 57.1% of the total population in the state had been vaccinated, including 67.1% of people aged 18 years old and older.

The state’s unemployment rate has been among the lowest in the nation, and came in at 2.9% in June, third best among any state and well below the 5.9% for the nation as a whole.

In June, the New Hampshire was one of roughly 20 that ended the extra $300 per week in unemployment benefits that the federal government had been supporting throughout the pandemic as part of an effort to help minimize its economic impact.

“New Hampshire’s economy is roaring back to life with one of the lowest unemployment rates in the history of the Granite State,” said Gov. Chris Sununu in a statement. “Such low unemployment rates are no accident, but are the result of a continued effort to provide businesses with the flexibility needed to grow while providing individuals with the incentives and resources needed to return to work. New Hampshire’s economy is well positioned to make further economic gains throughout the year that will serve to benefit communities and families across the Granite State.”

Prieto, whose firm has long represented Scarborough, Maine-based Hannaford, a chain owned by Ahold Delhaize USA, said supermarket operators have been much more active in New Hampshire than drug stores, a scenario that has been unfolding in many states.

Two of the most aggressive supermarket chains expanding in the state — DeMoula’s Market Basket, based in Tewksbury, Mass., and Whole Foods Market, based in Austin, Texas — do not have pharmacies, instead specializing in high volumes of commodity foods at low prices and high volumes of organic and natural foods at high prices, respectively.

Prieto said Amazon Fresh has been rumored to be scouting sites in Nashua. “That would probably be the most innovative and exciting net concept we have had for a long time,” he said.

Other than Woonsocket, R.I.-based CVS Health adding its HealthHUB format to existing stores in the state and relocating a handful of others, “things have been pretty stagnant in the drug store space,” Prieto said.

Despite undergoing some consolidation recently, the segment has maintained the status quo.

“The drug stores have just been working with the stores they already have,” Prieto said.

NEW HAMPSHIRE DATA

VACCINATION RATE (AS OF JULY 9)

Total population: 57.1%

Age 18 years old and older: 67.1%

Source: Centers for Disease Control and Prevention

Q1 2021 GDP: +8.4%

(change from Q4 2020)

Source: U.S. Bureau of Economic Analysis

UNEMPLOYMENT RATE: 2.9%

Source: U.S. Bureau of Labor Statistics

VACCINE NATION NEW JERSEY

GOVERNMENT EFFORTS AIM TO SPUR GROWTH IN NEW JERSEY

When COVID struck, New Jerseyans were among those hardest hit. During the spring of 2020, the state experienced the two largest monthly declines in employment in its history. By April 2020, 750,000 jobs were lost. These losses were quickly followed by the three largest monthly gains in employment in state history. By the summer, more than 40% of jobs were recovered.

Health care has been a dependable source of employment — both pre- and post-COVID — and today it ranks as the top private sector employer in the state. Employment in manufacturing remains strong as well. Warehousing is another sector experiencing growth in the state. New Jersey’s location along the eastern coast and adjacent to New York puts the state in an optimal position within the supply chain to be a major player due to its access to seaports, airports, railways and major highways. The growth of e-commerce has also led to the construction of more warehouses.

Phil Murphy, New Jersey’s governor, sent a message to the state’s 8.87 million residents when he signed the New Jersey Economic Recovery Act of 2020 into law earlier this year. The seven-year, $14 billion package includes incentives to fuel job growth, community partnerships and property development. Like action taken by other state governments, this program will provide tax credit incentives to create more jobs and keep companies from looking to move elsewhere. Not only is this a much-needed boost for small businesses in the state, but it is also expected to help drive New Jersey’s economic recovery and growth for the next five to 10 years.

The legislation features several new initiatives, including the Main Street Recovery Finance Program, which provides $50 million in grants, loans, loan guarantees and technical assistance to small and micro businesses. The bill also is expected to strengthen the state’s start-up and entrepreneur economy through the Innovation Evergreen Fund, a firstof-its-kind program that will combine state funds with private capital to support innovative new businesses.

Several innovative programs are also included in the legislation to promote growth in New Jersey’s urban centers, including the Brownfields Redevelopment Incentive, designed to facilitate the redevelopment of environmentally contaminated properties. Also included in the act is the Historic Property Tax Credit, which will incentivize the restoration of historic buildings, many of which are in New Jersey’s oldest and most distressed neighborhoods. Another component of the act, the Community-Anchored Development Program, incentivizes the construction of innovative new developments by partnering with universities, hospitals and arts and cultural organizations, and gives the state an equity stake in the development.

It may take time to see the positive effects of this act, but subtle signs that the state’s economy is rebounding are already evident.

While the past year saw a 30% dip in leasing activity and numerous bankruptcies that affect the New Jersey retail landscape, companies such as Planet Fitness, Five Below, Amazon Fresh, Lidl, Dollar Tree, Smashburger, Jersey Mike’s and Chipotle all have chosen to expand their presence in the state in recent months. Discounted rents were one of the enticements, but alongside New Jersey’s ever-expanding population, the state remains a lure for many of these brands.

NEW JERSEY DATA

• More than 50% of New Jersey’s 8.87 million residents were fully vaccinated as of June.

• A recent market report looking at the impact of

COVID on homeownership found New Jersey to be the most vulnerable state, with 14 of its 21 counties deemed to be among the 50 most susceptible to the pandemic’s economic impact on homeowners.

Building better relationships to build a better future.

www.amicipharma.com

VACCINE NATION WASHINGTON

ONCE GROUND ZERO, WASHINGTON STATE EMERGES AFTER STRONG VACCINE PUSH

Washington state is where the first confirmed case of COVID-19 was found in this country. That was January 2020. By the end of June 2021, 17 months later, Washington became one of the few states in which more than 50% of its residents were fully vaccinated against COVID. According to the Washington State Department of Health, 68.2% of people over the age of 16 years old had received their COVID vaccination by this time. Based on this compliance, Gov. Jay Inslee fully reopened the state’s economy and cultural centers on June 30.

For Washingtonians, restaurants, bars, gyms, movie theaters and other businesses have been allowed to resume full indoor occupancy levels, and physical distancing requirements have been lifted. While there will be fewer masking requirements, masks will still need to be worn in healthcare settings, long-term care, schools and correctional facilities.

Unvaccinated employees who work indoors will need to wear masks and businesses are being given the choice of whether to require masks for their customers, regardless of vaccination status. Large indoor events are restricted to 75% capacity unless vaccination verification is taking place.

While many understood the need for the stay-at-home orders, the extended closures took its toll on the state’s businesses. The last three quarters of 2020 saw a 43% decrease in restaurant sales, a 57% decline in bar business and a 60% drop in lodging sales. As expected, business owners were ecstatic about the state reopening, but many announced they would have to remain at half capacity until more workers could be hired.

Despite these shortages, Washington state saw several new stores opening or planning to open within the past 12 months or so. Dollar General made its first foray into the state in April 2020 when it opened a store in Cathlamet. The discount chain has plans to open another six stores in the state before the end of the year.

Last June, Sprouts Farmers Market opened a new location in North Seattle, its fourth location in the state. The chain is best known for making healthy living accessible to shoppers by offering affordable, fresh, natural and organic products. Its unique grocery model features produce at the center of its stores, an expansive bulk foods section, and a vitamin department focused on overall wellness. Sprouts also offers a distinct assortment of healthier products with special attributes, such as plant-based, glutenfree, keto-friendly and grass-fed.

Most recently, in June, Amazon Fresh Grocery opened its first full-sized store in Bellevue. Taking over a former Safeway location, the 25,000-sq.-ft. store features a mix of national and company-owned brands, prepared foods, produce and meats. Customers are given the option of using Amazon’s “Just Walk Out” cashierless checkout or choosing one of its traditional cashier stations. Amazon is reportedly opening another full-sized Fresh store in Seattle later this year. It will be located on the ground floor of an under-construction multifamily complex at 23rd Avenue and South Jackson Street.

WASHINGTON DATA

CDC notes

of those aged 18 years old and older have been fully vaccinated (as of June 29)

73.9%

Total cases (confirmed and probable):

451,595

Public health experts agree that the true number of people who have been infected with COVID-19 in Washington state greatly exceeds those that have been laboratory confirmed.

VACCINE NATION NEW MEXICO

NEW MEXICO’S TOURISM TAKES A HIT AS VALUE RETAILERS MOVE IN

After a decade of hard work, New Mexico’s economy was finally showing signs of stabilization and then COVID hit and all but erased that progress. New Mexico’s Tourism Department has projected the pandemic’s impact on the industry — including unemployment claims, lost local tax revenue and economic activity — at $4.3 billion. That figure does not include longer-term losses from business closures and workers moving elsewhere. Officials are predicting it could be three years or more before the state’s economy is back to pre-pandemic levels.

As of this spring, the number of tourists visiting New Mexico was on the rise and most retail stores were open. If spending patterns during the first three months of 2021 are an accurate barometer, the state is well on its way to recovering. The retail sector, for

IF SPENDING PATTERNS DURING THE FIRST THREE MONTHS OF 2021 ARE AN ACCURATE BAROMETER, THE STATE IS ON ITS WAY TO RECOVERY.

instance, one of the largest sectors in the state, recorded banner sales during this time, and accommodations and food service saw significant increases as well.

New-store openings, another indicator of economic positivity, are occurring as well throughout New Mexico. Off-price retailer Burlington Stores is slated to open a new location in the state’s capital of Santa Fe this fall and liquidation store BINge opened its first location in southern New Mexico’s largest city, Las Cruces, in June. Known as bin stores, outlets such as BINge have constantly changing assortments, ranging from food and HBC to electronics, sporting goods and clothing. Inventory is acquired from popular online retail sites and consists of returned items, shelf pulls, overstock or remaining inventory when a company shuts down.

Pricing follows a markdown approach. All items are sold in the beginning at a fixed price of $10, starting on Saturday and then reduced to $2 or $3 each day until Wednesdays when all items are marked $1. The store closes on Thursdays and Fridays when new shipments arrive and bins are restocked. The stores’ owners picked Las Cruces for their value-model store because it is among those areas hardest hit by the pandemic.

Specialty retailer Natural Grocers opened a new location in the affluent Los Alamos area in late 2020. In addition to selling a wide variety of natural and organic groceries, body care products and dietary supplements, the store features energy-saving innovations and nontoxic building materials. Natural Grocers’ policy is to not carry products that have hydrogenated oils or artificial colors, flavors, sweeteners or preservatives. A nutritional health coach is also available in the store to provide free one-on-one health coaching sessions.

Now that personal recreational use of cannabis is legal in New Mexico, officials are bracing for an influx of cannabis-related stores to open by the fall, which is expected to further infuse the economy. The state is highly dependent on oil and gas production, but officials have been looking into reducing its reliance on the former and expanding its investment in renewable energy, including solar and wind, which would bring more jobs to the state.

NEW MEXICO DATA

More than 60%

of New Mexicans aged 16 years old and older have received both vaccine doses.

Those aged 65 years old and older are the most heavily vaccinated (72%).

VACCINE NATION NEW YORK

NEW YORK REMAINS RETAIL’S PROVING GROUND

Not long ago, New York was ranked the third-strongest economy in the United States, trailing only behind Texas and California. Looking at its gross domestic product as a measure of economic health, New York was almost at $1.8 trillion during that time, most of which came from New York City. Yet after the pandemic struck, its GDP decreased 5.9% last year, a larger decline than the total U.S. GDP experienced. This was compounded by New York’s jobless rate, which was among the highest in the country.

Strict lockdown protocols that resulted in prolonged closures of many of the state’s service-driven industries were a chief reason behind the severity of the impact. What’s more, offices employing hundreds and thousands closed (and many remain so) while tourism and business travel came to a halt — all of which directly affected the business climate in the state and Manhattan in particular.

New York has been among the more cautious states in reopening its doors and removing restrictions. As of June, the U.S. economy was reportedly 93% back to normal, but New York was lagging. All eyes are on the pace of retail stores and restaurants reopening as key metrics of future economic health. A large part of the recovery will depend on how quickly — or slowly — offices bring employees back. Despite these obstacles and reported concerns, in the past six months a surprising number of companies have been opening new stores in the state.

A 21,000-sq.-ft. store dedicated to everything Harry Potter has opened in the Flatiron District in Manhattan. The three-story Harry Potter New York Store features 15 different themed areas, some including original props from the franchise movies. Created to be an immersive experience, the store features exclusive products, interactive elements and digital technologies — including integration with the Harry Potter Fan Club app. The store also has a Butterbeer Bar that serves Butterbeer, Butterbeer ice cream, bottled Butterbeer and other indulgences. Harry Potter New York has a virtual queuing system in place, so that when customers visit the store, they scan a QR code to join a virtual queue and return when notified.

Google is opening its first store this summer in Manhattan’s Chelsea neighborhood. The move to brickand-mortar retail comes on the heels of the company’s acquisition of Fitbit. Located in the same building that houses its New York City offices, the store will feature such Google-made products as Nest, Pixel phones, Fitbits and Pixelbooks. Tech support will also be onsite, and plans call for how-to workshops to be offered as well.

This year also saw several other noteworthy retail openings in New York, including crystal manufacturer Swarovski’s Instant Wonder store in Soho, value home décor retailer At Home’s first store in the borough of Queens and Lego‘s new flagship store in Rockefeller Center.

NEW YORK DATA

New York contributed

more than 8%

to the nation’s overall GDP pre-COVID. Its GDP was on par with Italy.

The majority of the state’s GDP is generated from economic activity in New York City.

As of June, eat-in business being done in the state’s restaurants was

less than pre-pandemic volume

(compared with the national average of 13%).

By early July, nearly

residents were fully vaccinated (48%).

VACCINE NATION OREGON

OREGON AWAITS MANUFACTURING REBOUND AFTER STRONG VACCINATION SHOWING

As of June, nearly half (47%) of Oregon’s 4.1 million residents were fully vaccinated and more than half (55.8%) had received at least one dose of the COVID vaccine. By late spring, the state was in the early stages of reopening as evidenced by the amount of people returning to work and the number of stores, restaurants and bars that were welcoming patrons. Many of the state’s popular attractions reopened as well, with several employing timed entry and limited capacity strategies to meet social distancing requirements.

One of the hardest hit industries that may take longer to rebound is manufacturing, a sector that had been struggling well before COVID. It is well known that Oregon is one of the most manufacturing-dependent states in the country. As of June, Oregon had recouped only a fifth of the factory jobs it lost a year prior. To compound matters, many of the markets its largest factories serve, such as steel and transportation, continue to be affected by the shortage of key components and computer chips.

AS OF JUNE, NEARLY HALF (47%) OF OREGON’S 4.1 MILLION RESIDENTS WERE FULLY VACCINATED AND MORE THAN HALF (55.8%) HAD RECEIVED AT LEAST ONE DOSE OF THE COVID VACCINE.

On the other hand, biotech businesses in the state are thriving and two of its top companies, Genentech and Twist Bioscience, are in the process of expanding their Oregon facilities. With the COVID-19 pandemic putting increased focus on emerging health technologies, some experts predict even greater growth in these sectors in the coming years.

City officials are in the process of launching a revitalization plan and say this, combined with lifted COVID restrictions, has already resulted in noticeable signs of recovery. They are confident that as work-from-home employees start to return to the office and hotels and restaurants continue to reopen, the retail scene will follow.

Business analysts say the stores that are best positioned to thrive in Oregon (and elsewhere) will be those that create immersive experiences around their brands, as well as those that offer such convenience features as curbside pickup, delivery and free returns.

Take the new Nike Live store in Eugene. The small-format, digitally led retail concept features stock driven by what people are ordering online, and to keep excitement up, Nike also releases new items in store each week. The Eugene store offers curbside pickup and is looking into shipping directly from this location. A strong believer in community, Nike has carved out space in the store where local running groups and athletes can gather.

New restaurants are opening as well. At Cedar Hills Crossing, which is known for its blend of local and national offerings, the state’s first Shake Shack opened this spring and another is expected to open in downtown Portland in early 2022.

Leaning on the value of community, many Oregon shopping centers are shifting the focus away from prompting product purchases to one that offers activities and experiences. For instance, the owners of the Bend Factory Stores, located on the city’s south side, are looking to add a firepit and horseshoes to encourage people to spend more time there.

OREGON DATA

Portland businesses experienced an

decrease in foot traffic during the COVID pandemic.

Oregon has recovered

of jobs lost during the pandemic, and the state’s jobless rate

decreased from

in April 2020 — the highest

point on record — to 6%.

VACCINE NATION WASHINGTON, D.C.

NATION’S CAPITAL RECOVERS UNEVENLY

Economic recovery came quicker for the District of Columbia than in other areas in the country. In addition to government jobs, the area employs many consultants, contractors, lobbyists and lawyers, most of whom were able to work virtually during this time. This played a significant role in buoying the city’s labor market and economy during the pandemic.

While the District of Columbia may be outpacing other metro areas in terms of recovery, not all residents in the area came through the pandemic the same. Those working in minimum wage jobs were hardest hit, with some even losing their housing. Tent cities, such as those that appeared in the downtown area, were direct evidence that this was indeed the tale of two cities.

As Washington, D.C., looks to get its private sector business back on track, Mayor Muriel Bowser is working with city officials to get offices reopened and entice new companies to open shop. Getting hospitality jobs back is another priority. However, as other metro areas in the country are finding, workers who left cities during the pandemic for areas with a lower cost of living have no intention of returning.

Meanwhile, new housing and loan programs, such as the Paycheck Protection Program, have been created to attract people and businesses to the District of Columbia and its outer lying areas. Looking at the retail scene, several new projects have started or are in the works.

Northeast Heights, a mixeduse development, is coming to Washington, D.C.’s Ward 7 soon. The estimated $600 million project will incorporate office space and apartments, and bring a much-needed supermarket to the neighborhood. The first phase will include a 285,000-sq.-ft. commercial building that will serve as headquarters for the city’s Department of General Services, and the ground floor will feature 18,000 square feet of retail space. The site has been designated a Great Streets corridor, which means small businesses can apply for grants to cover capital improvements and certain soft costs. The project is generating excitement among city officials, as well as residents, in what has been described as an underdeveloped and underserved neighborhood.

Convenience store chain 7-11 has been expanding its Evolution Store concept, adding a new location in Washington, D.C.,’s 504 K street neighborhood during this past year. The c-store chain’s concept-based model offers exclusive services and products customized for each area it serves. In addition to the Laredo Taco Company at the District of Columbia location, customers can find madeto-order specialty drinks, a cold treats bar, fresh baked goods and an expanded beauty section, featuring a wide variety of makeup, skin care and other health and beauty items. Created as a fluid concept, 7-11 officials can tweak the idea based on customer feedback.

WASHINGTON, D.C., DATA

of those between the ages

of 18 years old to 64 years

old were fully vaccinated in Washington, D.C., by July.

The District of Columbia region is among those with the lowest unemployment rates among major metropolitan areas.

The Census Household Pulse Survey shows that about half of adults in the Washington, D.C., region were working

from home during the

pandemic, which is more than any other metro area.

Hospitality workers fled the area in record numbers during the pandemic, leaving area officials struggling with how to attract them back to the city.