Maui small businesses have no choice but to change
Economists optimistic for recovery but uncertain over long-lasting damage
EDITOR’S NOTE: This is the third in a limited series looking back on the year since COVID-19 arrived in Maui County. Each story will explore an industry directly impacted and reshaped by the pandemic. Today’s feature focuses on small businesses.
KAHULUI — Despite the many uncertainties Maui County residents face amid a global pandemic, perhaps two things have remained the same: strawberry and pineapple guri-guri.
Iconic mom-and-pop business Tasaka Guri-Guri — which dates back more than a century — is still going strong, and its flavors are produced with the same popular taste and texture as they were decades ago.
Gail Saito, who runs the family’s shop with sister Cindy Tasaka-Ing, said Thursday that the business’ income is similar to pre-pandemic levels. She credits a local base, which is helping the store weather COVID-19’s economic downturn.
“People of Maui, they come,” Saito said. “They’re the ones that kept us going.”
The multigenerational Maui company is one of a handful of legacy small businesses that have survived 2020, a hopeful sign for Maui’s cultural and economic climate, according to Frank De Rego Jr., Maui Economic Development Board director of business development projects.
Ron Williams, former Hawaii Tourism Authority chairman, said small businesses like Tasaka Guri-Guri are essential to Hawaii’s economy; they’re what cultivate culture and community.
“Small business is the backbone, it’s what Hawaii’s economy is made of,” he said Friday. “As we see with Love’s Bakery, we’re at the risk of losing that.”
The U.S. Small Business Administration reports that 99.3 percent of Hawaii businesses are small businesses, defined as those with 500 or fewer employees. Nearly 98 percent of the state’s small businesses have fewer than 20 employees; about 82 percent have no employees at all.
While state projections show recent signs of hope for a faster economic recovery than anticipated due to the vaccination rollout, tourism reopening and federal aid, local business leaders agree that it’s too early to tell how much damage has been done.
“The challenge is we still don’t have great data on how many businesses were actually lost,” Maui Chamber of Commerce President Pamela Tumpap said.
SHIFTING GEARS TO RESTART, KEEP BUSINESS
Many small businesses, already reeling from leases and other expenses that didn’t stop with the shutdowns a year ago, were forced to find ways to pivot to stay afloat.
The median income for self-employed individuals at their own incorporated businesses was $48,073 in 2018. For self-employed individuals at their own unincorporated firms, median income was $25,445, according to the U.S. Census Bureau’s American Community Survey.
Marla Mings of Wailuku said last year that the pandemic wasn’t how she envisioned the end of her 14-year-old clothing store, Details Boutique, in the Queen Ka’ahumanu Center.
She closed her shop in June, only to find months later that customers would not let go of the brand, often expressing interest when they would see her.
In January, she hesitantly launched an online retail shop at detailsboutiquehawaii.com and said Thursday that she’s shocked it’s going so well.
“I’m surprised — this is not the same thing I used to do at all — but it’s going really good,” Mings said. “I was able to have enough of a following of people and enough interest in my brand, so that was a really big deal for me.”
The entrepreneur admits switching to technology platforms requires a high learning curve. But she’s up for the challenge, especially since she’s seeing customers enjoy shopping with her again.
“I’m really grateful that my customers love the brand,” she said.
Other business owners, such as local maternity photographer Kristy Copperfield, also drastically changed their approach during the pandemic.
From May to January, Copperfield got COVID-19 tested before newborn sessions, organized clients in one-week groupings and would self-quarantine until her shoots were done, typically seven to 10 days out of a month.
She rearranged her studio so clients sat about 15 feet away, wore two masks during shooting and invested in lots of Lysol and Clorox. Copperfield added that she did lots of laundry during that time.
“I needed to ensure I was doing all I could to avoid getting a baby sick,” the Makawao resident said. “The hardest part by far was isolating for seven to 10 days per month.”
The Maui Economic Development Board helped Maui County administer the Maui County Adaptability Fund, which provided federal money to support small businesses in their switch to health and social distancing guidelines. The fund also allowed small businesses to invest in technology to expand their virtual platforms, web-based marketing and e-commerce.
Businesses adapted to employ contactless point-of-sale technologies; Plexiglas enclosures; mechanical upgrades to include COVID-19 mitigation technology; e-commerce platforms; website development with online sales capability, including search engine optimization; use of graphics, photography and videography to highlight products and services; disinfection of equipment and supplies; creation of outdoor spaces to serve clients and customers; modifications to indoor work spaces and customer spaces to incorporate social distancing requirements, De Rego said.
“We have all experienced the uptick in the use of technology and its impact in all our lives due to the pandemic,” he said. “For many of these businesses the technological learning curve was steep, but one they were willing to undertake. For some businesses, the movement to online service and e-commerce opened new possibilities and an expansion of their reach beyond the shores of Maui Nui.”
DEVASTATING LOSSES HARD TO QUANTIFY
Some businesses weren’t able to pivot.
When nonessential business came to a screeching halt a year ago with mandatory shutdowns, many never reopened.
After the pandemic hit, a craftsman leasing from Maui Land and Pineapple Co. in Haliimaile who relied on the tourism industry defaulted on rent for months, packed up his rental, left his unit in disarray and moved to back to the Mainland.
Other small business owners let customers know about their closures. Vacant commercial spaces around Maui leave a tangible reminder of loss.
Tumpap said that when the stay-at-home order went into effect last March, businesses were frantically calling.
“There was panic, anger, frustration, crying,” she said. “It continued in April, May and June as businesses had to make impossible decisions, including laying off their valued employees. They were heartbroken. They would frantically call trying to help their employees get their unemployment when the state’s UI system collapsed and desperately needed unemployment was delayed.”
Hawaii in 2020 was down 8 percent for real gross domestic product growth, the biggest decline in the country, according to the University of Hawaii Economic Research Organization, or UHERO. The next closest were Wyoming (7 percent decline), Oklahoma (6.1 percent) and New York (5.9 percent).
The economic devastation is still being tallied, UHERO said, as many people have moved out of the state.
Tumpap said the number of businesses lost during the pandemic is difficult to quantify for a number of reasons.
“Those who publicly announced their closing, like Love’s Bakery recently, are known and we have a list of those, but that is far from the full story,” she said. “It’s devastating to close your business, lay off employees, lose your investment and income to support your family. That is why countless businesses go out silently without notifying anyone other than their employees.”
Other companies closed temporarily and have reopened, she added. Some are still considering whether to reopen, cautiously watching the economy for indicators on what may be ahead.
CAUTIOUS OPTIMISM, RESILIENCE IN FORECAST
One of the state’s top economists, Carl Bonham, said Thursday that despite Hawaii having the weakest economy in the entire country in 2020, better recovery than anticipated may be in store.
“The optimistic tone that we took in our first-quarter report is almost certainly going to be replaced by an even more optimistic tone in our second-quarter report,” said Bonham, UHERO’s executive director, during a Hawaii Economic Association event.
Bonham said Maui and Kauai were the hardest-hit counties in the state for job losses due to their “very dominant” tourism sectors. Almost half of the jobs in accommodations and food services and more than 30 percent in transportation and utilities were lost.
“They may also see some of the more rapid, in terms of percentage change, bounce back — not only because of the nature of math, but because we know Maui is seeing a large increase in visitor traffic and that will help to draw those jobs back, obviously,” he said.
Bonham said the nationwide vaccination rollout, Hawaii’s Safe Travels program that reopened tourism, the state’s work to bring the virus under control and federal aid that buoyed Hawaii are factors contributing to a more positive economic outlook.
One of the biggest factors improving the forecast is vaccinations. With the vaccination rollout, possibly 60 to 70 percent of the U.S. population could be vaccinated by the summer, and many will be thinking of a Hawaii trip, he said.
Also, an increase in consumer confidence for Hawaii is a good sign.
“Hawaii’s confidence has been on a relatively steady uptick, which bodes well for the local economy, for the sort of non-tourism-centric recovery,” he said.
However, this week’s closure of Love’s Bakery — along with other shutdowns of small businesses since the pandemic onset, such as Da Kitchen, Valley Isle Seafood and Horses R Us in Kahului; Sea La Vie and Sailboards Maui in Paia; and Afterglow Yoga in Kihei and Lahaina — is evidence that irreversible damage has already been done.
Based on state projections, Tumpap and De Rego say that recovery may not happen until 2023 and 2024. They acknowledged that much uncertainty remains.
Regardless of near-term or long-term outcomes, the two expressed confidence in the strength of local small business owners, who often gauge success beyond just the financials.
“One cannot discount the resilience of our people as a factor in the recovery of small businesses,” De Rego said. “For this inspiration, we don’t need to look to the West or the East, but within to our own local culture and our First Nation. The depths of malama (care) and aloha ‘aina (love for the land) that are rooted in the foundation of local culture are there for all to share, which invites us to see our notions of progress and prosperity in a different way.”
Even during the worst of times, Saito said that Tasaka Guri-Guri family members had never thought about shutting down.
“Every so often people come in and say, ‘Are you guys closing?’ And we’re like no. It was never in the back of mind,” she said.
But for their family, staying open wasn’t just about the bottom line.
“For us, it wasn’t to make money,” Saito said Thursday. “It’s really to serve, or to give back.”
* Kehaulani Cerizo can be reached at email@example.com.