When businesses reopen, will consumers come back amid COVID-19 concerns?
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States are making different calls right now about phasing businesses back in, with COVID-19 still spreading and deaths still mounting nationally.
Georgia Gov. Brian Kemp has declared that, as of Friday, some service businesses — like hair salons, massage therapists and fitness centers — can reopen, allowing residents to do more than grocery shopping in an effort to preserve businesses and boost the economy. Experts warn this could spread the disease. Will consumers go to these businesses, given the health risk?
After weeks of stay-at-home orders, there are bound to be some consumers ready to step out for haircuts and work-outs.
But to jump-start the economy, consumers need disposable income. With layoffs mounting, that’s in short supply, says Camilla Yanushevsky at CFRA Research.
“Even if people do get rehired and find a new job, I think they’re going to be kind of stingy with their spending,” Yanushevsky said.
Many who are still working won’t be inclined to go out either. They’re scared of getting sick.
“Consumer confidence has fallen dramatically each day, in line with the number of confirmed cases,” said John Leer at Morning Consult.
As long as COVID-19 keeps spreading, Leer says, announcements that businesses are open again may not make much difference.
“Consumers are saying it’s going to be about three to six months before they feel comfortable going out to eat, going to a movie theater,” he said.
Leer says consumers will need to know that testing is widely available and that there are ways to trace and isolate people who are sick, to keep others safe from contagion.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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