All of us have watched as small businesses in our own communities had to shut down during the pandemic lockdowns. We worried if they would survive with no income, and we cheered as they began to cautiously reopen. But what about those companies, deemed “essential,” that stayed open?
Inti Pacheco provides a look at the cost of staying open during the COVID-19 pandemic in the Wall Street Journal.
“A food distributor has paid $20 million for testing and plexiglass. T-Mobile US Inc. has spent $50 million on extra cleaning and safety gear. Walmart Inc. WMT -0.26% and three other big retail chains have put more than $3 billion into higher salaries, benefits and other Covid-19 measures,” Pacheco writes, giving us just a glimpse of the enormous costs of doing business doing in a pandemic.
“Big companies say they spent anywhere from hundreds of thousands to almost a billion dollars in Covid-19-related costs. Some say they expect the costs to keep rising in coming quarters, even as they face uncertain demand from consumers,” Pacheco continues.
The numbers above are startling, and they are truly just the tip of iceberg, Pacheco believes.
“Most companies haven’t broken out the added expenses,” he writes. “In April, the Securities and Exchange Commission directed companies to ‘provide as much information as is practicable’ about how they were responding to the pandemic.”
Among the costs are:
- Increased pay for front line workers
- Overtime pay for those covering outages
- Testing costs for employees
- Cleaning and safety products and procedures for facilities and staff
- Additional sick pay benefits offered by many companies
For example, Target reports they’ll spend at least a billion dollars more this year than last on “work-related expenses.” Walmart spent nearly that much in the first two months of the pandemic. And grocery chain Kroger said they spent upwards of $800 million extra in the quarter ended on May 23.
It’s a fascinating and sobering look at what this pandemic is costing all of us (because rest assured, these costs will be borne by all of us in one way or another).