A report by Mastercard suggests that sales at small- and medium-sized businesses (SMBs) in more residential neighbourhoods have fared better during the pandemic than those in central business districts.
The study states that SMBs lagged behind larger companies by up to 20 percentage points at the peak of the COVID-19 crisis. But in 19 markets around the world, it determined that total sales have risen 4.5 per cent at SMBs through August 2021 compared to the same period last year, while e-commerce sales are up 31.4 per cent.
Global spending at SMB retailers in central business districts were down 33 per cent, versus 2019, while sales within more residential neighbourhoods grew eight per cent.
Brighter opportunities ahead
"Supporting neighbourhood businesses has been a rallying point throughout the pandemic. However, the challenges faced have been very real, due to their dependency on local markets, local supply chains and tighter cash flows," said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. "But we see brighter opportunities ahead. The shift to digital opened the door to the pandemic's silver lining: a resurgence of entrepreneurship and innovation."
The Mastercard Economics Institute's new Small Business Performance Index also determined that small businesses that closed early in the pandemic were about three times as likely as larger businesses to remain closed long term. In Canada, roughly 28 per cent of small retailers remained closed after six months, as opposed to about five per cent of large retailers.