If anyone wants to believe that the economy, businesses and consumers will go back to where they were in 2019, they are going to be in for a disappoinment.
Governments have a tendency to overexagerate how the economy will rebound. Earlier in the year even the Federal Reserve was claimg a robust return of consumers. They have since changed their tune. But they were only half right, the rebound unfortunately was not in physcial stores, it was mostly in e-commerce.
Businesses are struggling as they are either open or closed. However, I am of the opinion that even if they were reopened at current traffic and revenue volumes businesses will continue to struggle financially. Being opened only slows the downward progression of potential failure.
Government intervention may help a little but it all depends on whether the financial help is enough to carry businesses through the pandemic.
Just this week the government of Canada stated that 50% of Canadians will be inoculated by September of next year. There are three problems with this;
- Consumer behaviours will continue to change and become fixed in the new habits.
- Most small busnessses with high costs are not going to survive because of lower volumes.
- Even with an e-commerce platforms I have been arguing for years that most physical positioned brands will never make up enough revenue online to compete.
What small and midsized businesses need is continued support while they are open and not only when they are closed. If they could all get relief or support for their highest overhead costs; payroll and leases while they are open until this virus is under control. Otherwise we should be prepared for significant business failures.