When businesses reopen, how long will it take for customers to come back?

OPINION: As COVID-19 plateaus in this province, the government is facing a new nightmare: how to convince Ontarians it’s safe to go out and spend their money
By John Michael McGrath - Published on May 06, 2020
Across Ontario, bars and restaurants have been closed since mid-March. (Frank Gunn/CP)

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In most of the province — basically, outside the GTA — the first phase of the COVID-19 pandemic seems to be receding, which goes a long way to explaining why Premier Doug Ford seemed more chipper on Monday than he had in a while. For weeks, Ford had been telling all Ontarians to stay home and asking those with seasonal properties to remain in their primary residences, lest they introduce the virus to rural areas that lack the health-care capacity to address it. This week, the message changed: Ford is now instead warning rural mayors and councils that he can’t hold back the urban hordes forever.

The premier also came awfully close to firing the starter pistol for the province’s retail businesses, telling them during a Queen’s Park press conference on Monday that they should start preparing for an eventual reopening.

“I’ll give the message right now: retail, start prepping… no matter if it’s three weeks, four weeks, two weeks — whenever it is — start getting masks ready,” Ford said, adding, “It’s inevitable … we’re going to get the economy going, based on health and science.” 

The nightmare the province is facing now doesn’t involve COVID-19 running like wildfire through the population (the virus, at least for now, seems to be contained) but a more subtle economic problem. A substantial fraction of the workforce — not the majority, by any means, but roughly 40 per cent, according to StatsCan — has been working from home through all this, so “reopening” businesses is something of an abstract concept for them.

The businesses for which reopening will mean significant change are ones whose continued operations during the initial phases of the pandemic weren’t deemed worth the risk. Grocery stores and pharmacies got to stay open; hair salons and movie theatres got closed. That was the result of some necessary and sensible decisions by government, but the weeks-long lockdown will have obvious consequences. 

Namely: Ontarians have been made keenly aware of the risks of infection, and they’ve also been spending weeks making do with alternatives to their usual amenities (or making do without). With few exceptions, the stuff that is the hardest to replace is also going to be the last stuff to reopen — I can’t even count the number of inquiries I’ve gotten on social media about when gyms will be allowed to reopen, but anyone hoping to see a movie or live show in a theatre is going to need to be patient, too.

From an economic perspective, this is a problem: after starting the current recession by massively constricting the supply of goods and services in order to preserve the public’s health, the government is now going to have a problem restarting consumer demand for many of those same goods and services. To put it succinctly: How many people are going to go out for a restaurant meal with their friends even after doing so becomes a legal possibility? Do you want to order a plate of nachos for the table again?

Obviously, for some people, the answer will be yes. But, for some currently unknowable fraction of the population, the answer will be something closer to “no, are you crazy?” And those margins, applied to an entire population, are the kind of thing that could keep the economy in the doldrums long after businesses are allowed to reopen.

We don’t need to speculate about this, either. A new poll from Leger released Tuesday shows that huge majorities of people are profoundly uncomfortable with the idea of returning to public spaces in a big way. The relative good news is that 41 per cent of people say they’d be willing to dine out at a restaurant, but it gets bleaker from there. Only 23 per cent say they’d fly on an airplane, and about one in five say they’d be willing to go to the gym or attend large public events, such as concerts or sports. Only 17 per cent say they’d be willing to go to a bar or pub.

In short: you can reopen anything you want, but you can’t wish up customers that don’t exist. Some U.S. states that have tried to rush their reopenings have discovered this the hard way, with  businesses calling it a “disaster.” The most expensive thing in a restaurant is an empty table, and the most expensive thing in any store is a cash register sitting idle. Businesses that can offer takeout or delivery options have a lifeline, but that won’t work for everyone.

All these problems are exacerbated by the fact that Canada doesn’t currently have the kind of testing and tracing regime that would allow governments — either federal of provincial — to say with real confidence that they’re finding and isolating COVID-19 cases as quickly as possible. And, given Ontario’s recent history with testing, it’s not clear how we’d even get there.

More than a month ago, in the middle of the province’s first modelling briefing, provincial officials told the public that there was no trade-off between strict public-health measures and the economy, that the places with the strongest public-health measures would see the strongest economic recovery. That principle is still sound, but, as we head into the reopening phase, it means something different: if people are going to head out to the shops and start reopening their wallets, they’ll first need to believe it’s safe to do so.

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