Gov. Gavin Newsom said California can begin moving into a second phase of business openings starting as early as Friday, allowing for stores that sell items such as clothing, sporting goods, toys, books, music, and flowers to begin to operate primarily through pickup services if modifications are made to their real estate.
The stores that permitted to reopen late this week will be required to modify their locations but details for low risk businesses, along with the manufacturing and logistics providers who serve those retailers, are expected be issued Thursday.
The announcement comes as the state is in its seventh week of a stay-at-home mandate, which is increasingly facing opposition and protests by some cities and residents as the economy sags and unemployment increases.
Newsom said Monday during his daily press briefing that the decision to move into the upcoming phase of new “low risk” retail openings was based on the criteria he laid out last month for his phased reopening plan, based on factors including the state’s and cities’ progress with medical preparedness, testing and contact tracing for the spread of the virus.
“This is a very positive sign and it’s happened only for one reason: The data says it can happen,” Newsom said.
The nation’s most populous state, California was among the first states to issue at stay-at-home order in response to the coronavirus in mid-March. Its economy, one of the largest in the world, has been hard hit by the ripple effects of the closing of nonessential businesses, increasing unemployment and people staying at home. In the past couple weeks, protesters have gathered in Sacramento and Orange County cities including Huntington Beach calling for the order to be lifted. A few cities have defied orders, lifting some restrictions and opening some public areas such as beaches.
Newsom has said he remains focused on stemming the spread of the virus and plans to reopen the state in phases based on “facts and data, not ideology.”
This week’s openings do not include business offices, sit-down dining establishments, or shopping malls, which have all been closed for the past several weeks by the coronavirus pandemic, the governor said. More types of businesses are expected to be included in a later part of Phase 2 openings, which are also expected to be decided based on the virus data and preparedness factors.
Sonia Angell, director of the California Department of Public Health, said the state plans to issue guidelines for allowing certain counties and other regions not hit hard by the coronavirus to speed up openings of other types of businesses, provided they submit contingency plans in advance to the state.
Newsom said those lesser-hit counties could get more leeway in opening certain hospitality-related businesses, such as hotels and restaurants, which have been among the hardest-hit businesses in terms of closings and job losses.
The governor said further openings depend on Calfornians feeling safe and confident enough to enter these businesses, even with the proper safeguards. Governments in hard-hit areas including the San Francisco Bay Area have been granted the right to maintain tougher standards apart from state relaxations where necessary.
Newsom did not provide a timetable for what would be a next wave of new statewide business openings during the current second phase, with an eventual statewide third phase to include more relaxed restrictions for places such as offices, gyms, bars, salons and other types of service businesses that have the most user interaction.
Ryan Patap, director of market analytics for CoStar Group in Los Angeles, said Monday’s announcement marked a “nice beginning” for opening up the state beyond the essential businesses currently in operation, but California remains a long way from seeing positive demand for retail real estate make a comeback.
“The environment for brick-and-mortar retail remains highly uncertain,” Patap said. “Even if allowed, how many consumers will be fearful of leaving their home to patronize retailers? Even if stores see customers come back, will retailers generate sufficient sales to justify staying open?”
Retailer confidence at this point appears to be as much an unknown as consumers’ attitudes toward returning to these businesses.
“Will we have another outbreak in which we need to shut down again?” Patap added. “These are only a few of the questions that must currently be going through retailers’ heads. What retailer is going to commit to a new lease?”