Mandatory actions that businesses, retail stores and service providers must take to reopen all point to one thing – MASSIVELY higher prices…
(by Half Dollar) As more states begin to look at life beyond the lockdowns, or perhaps at the holes being blown in their balance sheets, we can see what some of the “new normal” will look like.
In Ohio, the “new normal” will be a mask.
At all times.
From Governor DeWine:
These are the basic principals for consumer, retail, and other services. We do want employees to wear masks. Every retail outlet will have to be able to follow these protocols. pic.twitter.com/8T2WK4kfaQ— Governor Mike DeWine (@GovMikeDeWine) April 27, 2020
While I can say without a doubt that I hate clichĕs, and especially one as bad as “new normal”, it will indeed be a weird new normal.
Here’s some food for thought about Opening Up America Again.
Let’s use just this one example to think about the implications, because I think they’re universal, and, unfortunately, all roads lead to price inflation.
Let’s pick apart what consumer, retail and service establishments are required to do upon reopening, and let’s look at it in grouped order.
First, notice several things that are mandatory for employees.
Here’s the gist of it:
- MINIMUM 6-feet distancing or INSTALL Barriers
- Face coverings AT ALL TIMES
- Hand sanitizers at high-contact locations
- Immediate cleaning of high-touch, high-use stuff
Here’s the question: How much will it cost to do all of those things, and who will bear those costs?
Can a clothing store with high overhead already and cut-throat competition afford to relocate cash registers and have employees parading around with spray bottles of disinfectant?
I don’t think so, and that’s not even all they’d be doing differently.
For customers and guests, it’s pretty much the same story:
- 6-Feet distancing
- Provide hand sanitizer
- Stagger entry of guests
Those things also come with high costs that weren’t there before.
For example, somebody has to be paid, or some sort of system has to be installed or configured, to stagger guest entry.
I saw this myself at Lowe’s Home Improvement on Saturday, where an employee was posted outside telling people when they could go in.
The point is that all of these mandates add costs which were not there before, and not only are those costs there where they wouldn’t have been, but the simple fact is that somebody must pay these costs.
Let’s look at some of the Physical Spaces group to finish up this analysis, presented in a streamlined bulleted list:
- 6-Feet distancing or Install barriers
- Post signs and HOURLY disinfection of high-touch areas
- Clean merchandise BEFORE stocking
- Reduce maximum capacity by 50%
- No more self service food stations
- No open food courts
All of those things point to one thing and one thing only: A business that goes out of business or charges significantly higher prices.
Take this example: A restaurant.
If a restaurant owner must reduce the number of tables to comply with the social distancing mandates, then the owner has a lot less opportunity to seat tables, not to mention the owner would have what would be considered an abundance of empty, wasted space, so that means for the restaurant owner, there is less opportunity to serve food to patrons, mandated by the state.
In businesses with lower profit margins, which can be the case of a restaurant, every table for dine-in counts.
Opening Up America Again comes with a lot of costs that weren’t there before, and sooner or later these costs will be felt in rapidly rising prices.
What are some things going on in other states?
Sound off in the comments below!