When the first round of coronavirus restrictions took effect last spring, Arron Kallenberg thought his direct-to-consumer fishmonger, Wild Alaskan Seafood, was in peril.
Shoppers’ runs on grocery stores, he said, caused backlogs at the facilities labeling and packaging his fish — making it harder for Wild Alaskan to get salmon, cod, halibut and other seafood to customers.
The company’s fortunes, though, soon began to turn — not just in spite of the pandemic, but because of it. Thanks to his all-American supply chain, he could beat competitors who relied on imported fish or packing materials, many of whom struggled after the coronavirus dampened foreign trade. Online advertising also was dirt cheap. New subscribers signed up in droves.
As a result, the first few months of pandemic felt like “going down a highway at 275 mph without any other cars,” Kallenberg said. By November, the company had quadrupled its subscriber base to 130,000 members.
Wild Alaskan is a good example of what might be called a pandemic winner — a business thriving because of new economic realities created by the public health crisis that has devastated so many other businesses, and some whole sectors.
Some local pandemic winners are familiar stories, their successes pointing to by-now familiar ways the pandemic has changed consumer behavior. Cloud computing leaders Amazon and Microsoft are winning big in a world where more people work from home. Ditto for gaming companies (Microsoft; Redmond-based Nintendo USA ), grocery chains like Issaquah-based Costco and, of course, online retail behemoth Amazon.
But there are other local winners. These are sectors that haven’t made headlines, but still reflect how COVID-19 is, at least for the moment transforming the economy by changing where and how people live, how they spend their free time and income, and how they’re planning for the future.
Local fabric supply shops have seen a lift as home crafting booms. Many bike shops are hopping as consumers look for alternatives to gyms, public transportation and conventional vacations.
On summer weekends at the Green Lake location of Gregg’s Cycle, “we had 10 to 20 people lined up on the sidewalk waiting to get in the store,” says general manager Marty Pluth, who reckons 2020 sales will be “well above 10%” higher than 2019.
Other industries that have flourished over the past year suggest even deeper changes to the economy.
Thanks to work-from-home policies, softening rents, and record-low mortgage rates, the pandemic has brought so much change to housing that the local moving industry can barely keep pace.
At Seattle-based Eco Movers, business has been so brisk since this spring — more than 20% above the same period in 2019 — that the company leased extra vehicles. “We’ve never had to rent trucks like this before,” says John Howard, Eco Movers’ sales manager. The normal spring-to-fall moving season has stretched into winter in 2020, adds U-Haul Seattle president Jason Brolliar.
Nationally, the Seattle area had the second-biggest increase in the number of outbound moves versus inbound moves of any major metro area this year, behind only San Francisco, according to data from United Van Lines.
Some of this exodus is likely people who’ve lost jobs and are moving elsewhere, industry insiders say. They’re also seeing moves that reflect the economic uncertainty created by the pandemic.
Howard says some of his customers are homeowners fearful that COVID-19 could crash the local housing market, who are selling their homes and renting until they “see what happens with the market.”
But other factors are likely playing a bigger role. One is the work-from-home model that many employers adopted — which erased one of the main arguments for living, often expensively, in or near downtown.
“People were willing to pay an extra $500 to $700 a month to be able to walk to work — and now that’s gone,” says Alex White, owner of Seattle-based A-Ray’s Moving Solutions.
Many are moving to surrounding suburbs, where they can get more bang for their rental buck or take advantage of ultralow mortgage rates to buy their fist home, movers say. But some are going further afield. Movers report rising relocations to outlying places like Mount Vernon, the San Juan Islands, Whidbey Island and Eastern Washington. Out-of-state moves are also up: Many of U-Haul’s one-way rentals end up in Idaho, Montana, and Utah, Brolliar says. “We’ve seen far more people moving out of Seattle than at any point in the company’s history,” adds Howard.
But this isn’t just another “Seattle is dying” story. With apartment vacancies rising downtown and some other neighborhoods, some renters are taking advantage of move-in incentives to upgrade to nicer apartments — sometimes in the same buildings, says White, who adds that in more than a decade in the business, he has never seen landlords working so hard to keep or retain tenants.
Meanwhile, some who have chosen to stay near Seattle are fueling a major uptick in vacation rentals, like those listed on Airbnb or VRBO, in countryside locales outside the city.
Vacation rental operators in those rural environs say they’ve never been busier. The number of stays booked within 500 miles of travelers’ homes has risen by as much as 66%, compared to last year, according to data reported by Airbnb in a federal securities filing.
“We’re booked all the way into next year. We are full,” said Raminta Hanzelka, a program manager at the Bill & Melinda Gates Foundation, who with her husband owns a three-bedroom cabin near Lake Wenatchee. Vacationers even stayed in the cabin during the choking smog of this year’s Labor Day fires, she said.
One big driver: Families in Seattle and other urban areas who are unwilling to fly for vacation this year are looking for a local getaway. While the vacation rental business as a whole has taken a hit commensurate with the large decline in air travel, the local vacation rentals market is booming.
“People are just desperate to have a little vacation,” said Kirvil Skinnarland, the president of a nonprofit advocating for more regulation on vacation homes in Chelan County. “They’re not going to get on planes and fly to Hawaii or whatever, but they’re going to come over here.”
The pandemic has also prompted some consumers to spend less.
That’s evident, for example, in the boom in secondhand products, and consignment clothing in particular. But it’s also showing up in bigger-ticket items, like used cars — sales of which have soared even as new car sales have fallen.
At All American Motors in Tacoma, buyers have been snapping up used cars in every category. Especially hot are diesel pickups: Even older models with high mileage “were just flying off the floor like nothing I’ve ever seen,” says co-owner Brandon Clifton, who reckons total year-to-date sales are up around 15% over 2019.
Dealers say that in the spring, coronavirus-related shutdowns by automakers and suppliers crimped new car shipments and led many would-be buyers to used car lots instead.
But the pandemic has also made many buyers simply less keen to splurge on a new car, which can easily cost twice as much as a used model just a few years old.
Many buyers this year have been using what would have been their down payment and “just buying a newer used car,” says Zeke Nylander, at Bayside Auto Sales in Everett. More buyers also are paying cash, says John Yang, the general operations director of First National Fleet and Lease, one of the state’s largest used car dealers.
The pandemic has driven used car sales in some unexpected ways, as well. For example, many of Clifton’s diesel pickup buyers said they needed a truck to haul camper trailers they purchased after their pre-pandemic vacation travel plans were scotched by public-health restrictions.
Buyers “had no idea if they’d ever be able to [take a normal] vacation again,” Clifton says. “But then they didn’t want to spend $80- or $100,000 on brand new diesel trucks.”
But even in winning sectors, there are losers.
Early in the pandemic, demand was so high and supplies so tight that smaller dealers struggled to get enough inventory.
It also pushed up prices, a problem for lower-income buyers. Lower-income people also were disproportionately affected by layoffs, business closures and other pandemic-related economic impacts. The result: Some used-car dealers that cater to lower-income buyers have seen fewer customers this year.
“I will tell you this — I have a lot fewer waiters and waitresses and small business owners looking for cars,” says Kyle Corn, owner of Corn Motors in Everett. Corn says his dealership, which emphasizes “inexpensive vehicles for working class people,” has seen sales slump during the pandemic.
In other winning sectors, too, the boom has been unevenly distributed.
At some smaller bike shops, for example, high demand was partly offset by inventory shortages and store capacity restrictions, as well as by higher costs for spare parts and safety equipment and cleaning supplies.
“We’ve been really busy this year, but every aspect of business has cost us more this year, as well,” says Shawna Williams, owner of Free Range Cycles in Fremont. “Everything just takes more time and a lot more money.”
And while short-trip vacation rentals have surged, hosts who depend on longer-distance travel are seeing a slump similar to that in the hotel business, where pandemic-linked declines in tourism and conferences sent profits plunging more than 60% compared to last year, according to mortgage analytics firm Trepp.
At real estate agent Michael Smith’s Woodinville bungalow, which in the summer is typically booked solid by out-of-state visitors through short-term rental site VRBO, “we’re down probably 90% since this COVID thing,” he said. (Contrast that with his Lake Wenatchee cabin, which is seeing multiple bookings a day.)
Perhaps the most important question about these pandemic winners is, how long will their booms last?
Analysts say some changes in behavior, such as the surge in online shopping, which have buoyed both Amazon and Wild Alaskan, aren’t likely to fade.
But bike sales could well drop back to pre-COVID-19 levels once public transit and gyms reopen, says Gregg’s Bluth. “I doubt we’ll see another 2020 level of demand.” The craze for used cars could also dwindle as consumer caution fades, some dealers say.
Many pandemic winners concede that they don’t really know. The boom itself was so unexpected that many used-car dealers “can’t even begin to forecast” next year, says Yang.
Movers, meanwhile, expect that some of their far-flung customers may never come back to Seattle.
People who moved to cheaper digs elsewhere may want to stay put. Ditto for customers in what White calls “breakup moves,” where already-struggling couples tried working from home during the pandemic, but quickly discovered “this place isn’t big enough for both of us.”
On the other hand, movers do expect some of their pandemic customers will return once work-from-home measures gradually end and commercial districts reopen. They just aren’t sure how many or when. “None of this fits any of our existing models,” says U-Haul’s Brolliar.
For now, says Howard at Eco Movers, he’s keeping the extra rental trucks.