Monday, May 25 marks Memorial Day, but it’s no holiday for businesses struggling to survive in the wake of the COVID-19 outbreak — and it doesn’t help matters that potential customers appear afraid to venture back into those stores.
Arizona Gov. Doug Ducey’s lockdown orders have expired and businesses were allowed to reopen, but what economic damage has already been done? And just how safe do customers feel in this “new normal” of shopping and commerce?
“I’m just going to wait a little longer,” Tim Jones of Glendale said Thursday, May 21. “I think things are heading in the right direction but I’m going to be patient. I can get just about everything I need online and that’s how I’m operating right now.”
A new survey released last week backs up Mr. Jones’ mindset, revealing consumers are wary of visiting local businesses even as the nation’s economy begins to gradually reopen.
“More than 2 of 5 Americans indicate they plan to shop in public less than before the outbreak, indicating that consumer spending will remain under pressure,” said Mark Hamrick, senior economic analyst at Bankrate.com “This suggests the online sellers will continue to be favored by consumers.”
As the nation celebrates Memorial Day, Bankrate reports only 1 in 3 adults (35 percent) would be comfortable visiting local businesses in under a month provided the business reopened this past holiday weekend with enhanced safety measures in place.
“While governments are giving the go-ahead to Americans to venture out of their homes to resume a semblance of their lives before the lockdowns, a majority believe this is happening too soon,” Mr. Hamrick said. “While retailers are naturally eager to welcome consumers back to brick-and-mortar locations, store traffic won’t return to normal in the near future.”
According to the survey, more than half of respondents (55 percent) think businesses are reopening too soon, and 43 percent say they expect to shop less in public than before.
“We are in a different world,” Mr. Jones admitted. “And who knows if it will ever get back to the way it was before.”
The statistics, gathered online on May 5-6, show huge differences based on political affiliation. The total sample size was 1,341 adults.
Three-quarters of Democrats think states are reopening businesses too soon while only 35 percent of Republicans agree.
“The nation’s political divide is in full view here with 3 of 4 Democrats saying it is too soon to be reopening businesses compared to about 1 in 3 Republicans,” Mr. Hamrick noted.
Those associated with the GOP were three times as likely to say the timing is just right (39 percent of Republicans vs. 13 percent of Democrats), and over eight times as likely to say businesses are reopening too late (17 percent of Republicans vs. 2 percent of Democrats).
More than half of Republicans (56 percent) would be comfortable visiting reopened local businesses within a month, compared to just 20 percent of Democrats. Furthermore, 18 percent of Democrats said they would not be comfortable visiting reopened local businesses until a vaccine is available or the virus is contained, compared to only 4 percent of Republicans.
Health concerns aren’t the only issues holding households back from spending.
More than 4 in 10 U.S. households (44 percent) say the COVID-19 outbreak has negatively impacted their spending ability, with reasons including:
Diane Swonk, chief economist at Grant Thornton, told CNBC there is a definite hesitancy by consumers to get back out there. A prime example is in Georgia, where businesses reopened in late April to mixed results.
“There’s a fear about reopenings and visiting places,” Ms. Swonk said. “The malls opened to a lot of fanfare, advertised like crazy, but few people showed up.”
Mr. Jones said he’s in no hurry to head out to the mall.
“I’ll think about that in the future,” he explained. “For now, I’m only concerned about buying the necessities.”