New York is suffering from a retail apocalypse.
It’s so bad, consumer confidence in the city’s economic future has plummeted to the lowest level recorded since December 2015, the latest analysis reveals.
Signs of this deepening malaise are everywhere: Boarded-up retail storefronts are turning entire blocks into urban ghost towns.
Analysts blame many factors, including soaring rents, living costs, taxes and labor regulations.
“Some of the new labor laws are almost impossible to comply with,” said Mary Silva, who with her husband Edward owns Maz Mezcal, a popular Mexican restaurant on East 86th Street, explaining how their business is struggling to stay afloat amidst rising overhead.
Despite the national economic recovery, New York consumer sentiment lags behind the nation’s, according to the latest Siena College Research Institute poll last week. New York City scored 85.1 points in the first quarter of this year. The statewide picture, measuring current and future consumer sentiment, is also grim: At 87.1, it’s down 5.2 points from the fourth quarter of 2017 — and in the latest quarter is 14.3 points below the nation’s 101.4 points.
“Overall confidence remains strong, but New Yorkers are far less secure today and optimistic about our state economy than Americans in general are toward their personal situation and the country’s future,” according to Dr. Doug Lonnstrom, professor of statistics and finance at Siena.
A separate survey by software company Womply, which serves small business owners nationwide, reveals another gaping divide. Nationally, 42 percent of small business owners said they were very optimistic about their business prospects for this year compared with 32 percent in New York.
“Business owners in New York only have a finite profit margin and that’s been squeezed by the rising costs of labor, health care and in other areas,” said Mike Durant, New York state director of the National Federation of Independent Business. “If something is not done to reduce costs, then business owners are going to have to dramatically alter their business models and cut back.”
While some analysts also attribute large-scale business closures to the ascent of online retailing, others have a more sinister explanation.
Jeremiah Moss, author of the book “Vanishing New York: How a Great City Lost Its Soul,” said some of the carnage is due to the changing face of New York landlords.
“Many are no longer mom-and-pop operations, but institutional investors and hedge funds that are unwilling to drop rents to match retail conditions,” according to Moss.
Small business owners like the Silvas now live in dire fear of survival. They are the mom-and-pop businesses, the heart and soul of New York City, who are losing customers and seeing dampening confidence, their advocates say.
“We need an immediate break for our future success,” Mary Silva said.
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