The shutdowns across the U.S. were sudden and devastating. Companies who struggled were forced to fold and even those with a healthy business faced steep declines in profits. The government responded by deeming certain retailers “essential” and allowed them to stay open, but the rules on what constituted an essential business were unclear. COVID-19 had a more uniform impact on small businesses as many faced more uniform dilemmas with supply chains and landlords. The impact on large chains was harder to predict as we saw some of the biggest names in restaurant and retail thrive or cease to exist.  As the election day approaches, we have a chance to examine the economic outlook of these large chains and how our votes could give them a boost or close the door on a revival.

As the country took stock of what a shutdown might mean for business, there were certain companies that seemed destined for bankruptcy. Stores like JCPenney Company, Inc. and Bed Bath & Beyond have been struggling for years even before the pandemic. Digital ordering became an outlet for some, but many retailers could not afford any loss in revenue as an online infrastructure cannot be built overnight. Large restaurant chains faced a different dilemma as they were allowed to remain in operation, but only through off-premise sales such as delivery and curbside pick-up. Predictably, fast food and casual dining chains fared the best and fine dining establishments struggled. Chains like Chick-fil-A Inc. and Chipotle Mexican Grill were well versed in off premise sales and flourished during the pandemic. Chipotle in particular was able to push through many digital enhancements like AI powered drive-thrus. In contrast, chains like Steak ‘n Shake and Pizza Hut have faced record closures. Many pizza chains have seen high sales during the pandemic, but Pizza Hut has not seen the same results likely due to organizational issues that existed before the pandemic. Unfortunately, COVID-19 uncovered the financial woes of many companies that appeared to be stable from an outsider perspective.

In 2021 new an old policymakers will make far reaching decisions that will affect the viability of the large chains that have survived the pandemic. One of the most important factors will be the safety measures that will be put in place and whether they become federally mandated. Mask mandates and social distancing have already cost companies millions, but more stringent measures could be debilitating. New York City is currently requiring restaurants to have hospital grade filtrations systems that can cost up to three times more than the ones currently in use. Businesses will have to consider the cost of such measures, especially if they become mandatory and widespread. Walmart is one of the largest corporations in the U.S., but if they were to implement something like upgraded filtrations systems in their stores, the cost would be astronomical and supply chains would be unable to support such a massive order. However, the social implications of relaxed health enforcement could have equally negative effects on sales. We must also consider the changes in the tax code that could come with the election of a new President. Large chains are often the subject of tax changes and Vice President Biden has made it clear that he will increasing taxes on large earnings, but we do not know the exact details of his formal tax plan. President Trump also has yet to releases his full tax plan, but his current administration has given us an idea of what the future would look like. Managing public and the health of the economy is no easy task and it makes this one of the most crucial elections in U.S. history.

As we draw closer to the 2020 election the issues facing large chains have influenced candidate platforms. Incumbent and new policy makers will have to answer difficult questions about the transparency of shutdown procedures and ensure that no one type of business is singled out. The economic outlook for large chains should improve as we move into 2021 and they have more time to safeguard against the issues that the pandemic brings.