Locals Sustain Barracks Row Through Pandemic

Shopping by Hill Resident Increases 75 Percent

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Customers dine outside at Belga Cafe (514 Eighth St. SE) Thursday, Jan. 14. E.O'Gorek/CCN

You did it, Capitol Hill residents. You really made a difference.

A recent study commissioned by Barracks Row Main Street (BRMS) found that businesses on the Eighth Street corridor were sustained by a surge in shopping by local residents.

Since April 2020, shopping by local customers has not only increased —it’s nearly doubled.

For April and May 2020, the months most dramatically affected by the pandemic, retail sales along Barracks Row were only 50 percent of 2019 numbers.

Out-of-town shopping bottomed out in April, but sales along the corridor were buoyed by local shoppers to the point they were only down 30 percent from 2019 levels.

That’s great news, said BRMS Executive Director Martin Smith.

Not only has nearly every business on Barracks Row so far survived the pandemic, over a dozen new businesses have come to Barracks Row since the lockdown began last March, Smith said.

“So, it’s something that people in other neighborhoods are recognizing,” he noted. “That’s the other takeaway: Barracks Row is a great place to have your small and local business.”

Images: Chart: Comparison of Monthly Retail Spending on Barracks Row, 2019-2020. Courtesy: JS&A

Neighbors Taking Care of Business

Local shopping is why Barracks Row was able to remain more stable than almost any other District commercial corridor throughout the pandemic, said Jon Stover of economic development consultancy Jon Stover & Associates (JS&A), which conducted the study.

The study used a blend of newly-accessible data sources, including monthly customer spending and traffic data from credit card companies as well as geospatial cell phone data to determine where shoppers lived, when they were shopping and how much they were spending.

The study found that the number of visitors and customers from outside of the neighborhood decreased dramatically from February to April 2020, declining by 47 percent. At the same time, neighbors turned out in droves to support their neighborhood businesses: there was a 75 percent surge in customer traffic from local residents over the past year.

“The data shows that there’s been a deliberateness of local spending on Barracks Row,” Stover said. “The data also shows that it has made a major difference in terms of supporting and sustaining these businesses.”

Nancy Metzger lives a block and a half from Barracks Row. Over the past year, she’s made the extra effort to support local businesses, especially the restaurants. “I certainly wasn’t getting takeout twice a week for three people before the pandemic,” she laughs, noting she does like to cook. She and her spouse choose a different restaurant every time, spreading their dollars along the corridor. When they visit their son in Southwest, they’ll bring him a dinner as well.

Metzger said that, like her, many neighbors have personal relationships with the business owners. “I think everybody goes by and they worry —‘how are they doing?’” she said.

Differing Impacts

The study found that different types of businesses were affected by the pandemic in different ways. The study found that entertainment establishments and restaurants were hit the hardest, while many local grocery stores, home improvement stores and pet stores actually experienced an increase in sales during the pandemic.

Bart Vandaele is the Executive Chef and owner of Belgian restaurant Belga Cafe and rooftop cocktail bar Betsy. Both are located at 514 Eighth St. SE. In July 2020, he closed his 14th Street restaurant B Too to focus on the Hill.

He said the past year has been tremendously difficult, but, he adds, the support has been unbelievable. “My customers are very, very loyal. The customers who are coming are saying, ‘as long as you stay open, we’ll support you,’” Vandaele said.

In June 2020, Vandaele said, he consciously decided to focus his energies on creative ways to move forward. He acquired the greenhouses that made outdoor winter dining possible, pivoted to offer Mother’s and Father’s Day brunches to-go, hosting wine dinners and cocktail classes.

“This is what we do; we have to be creative, day in and day out, problem-solving on a fast pace,” he said. “Yes, it’s been hard, but we’ve been here for 17 years and we’ve had 17 years of support.”

Other businesses also pivoted multiple times to adapt to changing circumstances and District regulations. They also came up with different ideas to continually attract customers in safe ways.

Kimberly Hawkins, owner of Howl to the Chief (719 Eighth St. SE), said business has been solid over the last year.

The pet store updated their website to include e-commerce, curbside pickup and delivery and are not only considering keeping it post-pandemic, but even expanding those services.

Howl to the Chief saw a surge in sales, which Hawkins suspects was fueled both by increased numbers of locals working —and shopping—from home, as well as a commiserate increase in pets that she also noted in her role as Director of Rural Dog Rescue. Almost all of the customers were local, she said. “The past year for us has been, honestly really good. Prior years before, we weren’t 100 percent sure we would pursue another lease.”

But instead, when her lease was not renewed after running out this year, they found another location just down the street.

“My hopes are that the community continues to support us as a small business,” Hawkins said. She’s worried that once parking enforcement goes back into place and people start returning to offices, that business will decline and people move their purchasing online.

“But who knows?” she asks. “We might hit a new norm.”

Chart: Neighborhood Comparison: Change in Overall Retail Sales (benchmarked to DC Average). Courtesy: JS&A

Challenges Still Ahead

Christopher Martin is a BRMS Board Member and a Principal with Martin-Diamond Properties, which has buildings in multiple neighborhoods, including five along Eighth Street SE. He says that Barracks Row has been the most resilient of the neighborhoods where he owns.

Nonetheless the last year has still been a challenge, with Martin-Diamond working with tenants to support them through concessions or deferrals. “But I think it’s the right alignment for the long-term success of the businesses that have been the viability of the street,” he said.

In some ways, the pandemic has helped demonstrate how great a neighborhood Barracks Row is for businesses, Martin said. “I think that Barracks Row lost its luster when the Wharf opened, and Navy Yard began expansion,” Martin said. “But over the past 18 months, retailers have recognized the built-in traffic, density and income Barracks Row has are crucial to be able to support business.”

But there’s still a long way to go before business will be able to get back on both feet, Martin notes. Many took on tremendous debt. That’s especially true of brand-new businesses who didn’t qualify for much of the federal funding or grants. As local business starts to scale and resume growth, they’ll need to effectively reimburse the cost of the debt.

“I think it’s going to take some time to stabilize their business and return to 2019 numbers or better,” Martin said.

Moving Forward

While the general message of the report is that things aren’t not as bad as they could be, Stover notes that many businesses have been heavily impacted and resources are still necessary, ranging from PPE to grants.

With the data from the report, the businesses most in need can be identified, he said, allowing assistance to be provided in the most effective way. Finally, the report shows that identifying and attracting the local customer base is key, because that’s what is keeping the businesses afloat.

Smith said BRMS is using this information to shape strategy for the next 3 to 5 years. Businesses have made changes in the way they operate, some of which are going to become permanent. “We want to be available as a program to provide them with that small business technical assistance to help them really structure their business around a new, post-COVID environment,” Smith said.

“The businesses on Barracks Row have survived with community support and we have to keep that going,” he said. “That’s been a critical difference for us that has to be maintained.”

Learn more about Barracks Row Main Street by visiting www.barracksrow.org See the report at www.barracksrow.org//community-supports-barracks-row