Governments around the world are beginning to relax lockdowns, but companies on the frontline that deal with customers face-to-face know that it will take more than government encouragement and a discounted meal to get business going again.
Since March consumers have been told that they should stay at home for their own safety, and this has made them fearful of returning to “normal” life and take part in social activities like shopping and eating out, which many companies rely on. Even if people get over their fears, however, many will still not be spending the same way as before, with unemployment rates already rising and the Bank of England forecasting that the crisis will lead to the worst recession for centuries.
The global health crisis and an economic downturn has hit consumer confidence, with more than 80 per cent of people saying they remain worried about their own health and that of their family as well as the longer-term financial impact of the virus and resultant lockdown, according to one recent survey. Optimists like UK Prime Minister Boris Johnson insist that these psychological barriers to a recovery can be overcome, but signs of recovery remain inconsistent.
High street retailers and other businesses that were already struggling to compete with online competitors are already planning large sales to get footfall back into their shops and venues. However, the main selling point for bricks-and-mortar shops and venues compared to online alternatives was the experience – if employees are wearing protective visors and customers are scared then many will find it hard to survive the next few months even with deep discounts on offer. Large online retailers like Amazon can always compete on price, and who is going to visit a physical casino when they reopen next week when online operators are already out-competing them with free spins no deposit offers and online there is no risk of catching a deadly virus.
In the UK, the hospitality industry has already started reopening their doors to customers, and earlier this month Chancellor Rishi Sunak announced his “Eat Out to Help Out” scheme, which will see households given vouchers to use when dining out to try and tempt people back into pubs and restaurants. The move was welcomed by the industry, but it remains unclear whether the British love of a discount will outweigh their fears of coronavirus.
If the gradual reopening of the economy continues and the levels on infection remain under control with a combination of social distancing, mask wearing, track and trace, and localised lockdowns then consumer confidence may start to return. However, the soaring number of cases in the US after states tried to reopen too early and too widely are a warning that getting policies wrong can be catastrophic for both the nation’s health and its public purse.