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Central Texas losing thousands of businesses

The KVUE Defenders sifted through months of sales tax revenue figures to get a better idea of the true impact COVID-19 has had on businesses in our communities.

AUSTIN, Texas — There is no question businesses have suffered because of the pandemic. What started with losing SXSW and the Austin City Limits Music Festival has grown into a daily struggle for bars, restaurants and retailers to stay open.

But just how many had to close has been tough to measure. So the KVUE Defenders sifted through months of sales tax revenue figures to get a better idea of the true impact COVID-19 has had on businesses in our communities.

At the beginning of the year, business was rolling along at places like Diana's Flower Shop in East Austin.

“We were doing very, very well,” said Diana Limon, owner of Diana’s Flower Shop.

Then COVID-19 hit.

“It was hard to tell people they could not come in because this is a place where we gathered and we hugged and we cried and we laughed,” said Limon.

Limon has owned her flower shop for decades. She worked beside her father’s business and her mother worked alongside her in the flower shop. She like so many other business owners struggled to keep things afloat.

Losses hit the city harder than the suburbs

The KVUE Defenders obtained sales tax revenue data from the state comptroller's office. We looked at how cities across Central Texas have fared over the past year to measure the toll COVID-19 has had. The records show Austin has lost 1,685 businesses. That figure includes 81 bars, 66 restaurants and 43 retailers.

The suburbs have suffered too. Round Rock lost 1,032 businesses, Pflugerville 944. Even the outer lying suburbs, the ones seeing the most growth, are losing businesses (Dripping Springs lost 384, Leander 716, Lakeway 614).

Take a look at the sales tax revenue cities throughout Central Texas collected in 2020 and 2019:

the KVUE Defenders sifted through months of sales tax revenue figures to get a better idea of the true impact COVID-19 has had on businesses in our communities. XLSX, PDF, TXT or read online from Scribd Share this document Did you find this document useful?

“We shut down for two-and-a-half weeks,” said Lakeway restaurant Hops and Thyme owner Trent Chastain.

Having a patio, curbside service and a contingency plan have helped Hops and Thyme in Lakeway. The Lake Travis community lost just four restaurants in the past year.

“We've kind of changed our business plan. So we're doing touchless menus with the QR codes, rolling silverware in paper napkins, just kind of adapting now to, I guess, the new normal,” he said.

Overall nine major cities in Central Texas lost 7,091 businesses during the past year – that's 13% of the number of businesses. 

Despite losses, sales tax revenue in Central Texas is up

But there is one surprise – cities are still collecting more money.

Sales tax revenue in Central Texas is up across the board, especially Leander, which saw a 49% increase in sales tax revenue. Leander added eight businesses in the past year, including the tasting room at Leanderthal Distillery.

“Leander has been fantastic, not just our customers, but other businesses. We've all really kind of banded together,” said Scott Calame, owner of Leanderthal Distillery. “I was confident we were going to stick it out no matter what, and we were going to get through this.”

But it hasn’t been easy. Calame opened his tasting room months before the pandemic hit. At the time he was forced to close his doors, the tasting room was accounting for 40% of his business sales.

So he took a chance and started making hand sanitizer. It was a challenge. Not only did he have to come up with a formula, he had to get FDA approval.

“Instead of selling one bottle at a time to customers, we were selling five, 10, 20 gallons at a time to commercial companies,” he said.

RELATED: 200 hand sanitizers now on FDA's 'do not use' list

It worked and kept money coming in. Now that the tasting room is open again, they are taking reservations and business is picking back up.

Community has been the key to business success. Austin businesses have suffered from the lack of traffic. More people working from home meant more people spending money near their homes.

It all proved too much for Limon, who also takes care of her aging parents.

“I know I can go back and I can open a business and we'll do just fine, but I’d rather have my parents healthy and safe and cared for. There's no money in the world to replace it,” she said.

After 40 years she decided to close Diana's Flower Shop.

For comparison, the KVUE Defenders checked other major cities across Texas and found San Antonio, Fort Worth, Dallas and Houston combined lost close to 6,976 businesses. San Antonio, Fort Worth and Houston had slight increases in sales tax revenues (average 1.5% increase) during the past year, but Dallas had a 5% drop.

Sales tax revenue doesn't tell the whole story. So we will continue to look at the impact across Central Texas.


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