LONDON, ONT. -- The COVID-19 pandemic is creating a divide between those businesses that can go digital and those that cannot.
That’s according to a Fanshawe College economics professor who says businesses that cannot adapt will simply not survive.
Professor Sharmistha Nag said consumer habits are rapidly changing, and the move to online shopping will be permanent for many. It doesn’t bode well for some businesses.
“If they are unable to make changes to their infrastructure this is going to be a big problem for them,” she said. “This is going to make a permanent impact on the way consumers behave.”
At dance studio Dance Extreme on Notre Dame Drive in London, owner Rebecca Brettingham-Felice said classes have gone digital, and are being offered on Zoom for their 600 dance students.
But doing the digital dance doesn’t pay the piper. Three years ago the business underwent $850,000 in renovations. In addition, it has a rent bill of $20,000 per month.
“We can never get this time back and these revenues in, so it is a massive loss of revenue,” said Brettingham-Felice. “We have now experienced one month and we are about to head in to month number two.”
The cost of overhead for shops that remain empty is also taking a bite out of London’s core. A survey of downtown businesses taken this month indicated as many as 16 per cent do not plan to re-open once restrictions are lifted.
Downtown London Executive Director Barbara Maly said it’s only going to get more difficult as the pandemic continues.
“Each week brings more and more struggles as the crisis goes on for our businesses. So we’re trying to reach out to them, as many as we can, and support them where we can.”
London Mayor Ed Holder is urging property owners to cut businesses some slack when it comes to rent.
“It is not the place of a municipal government to tell any owner of a property what they can and cannot do with their tenants. But we can certainly encourage and ask them for their support because we are all going through this.”
Survey shows one in five are no longer working due to COVID-19
A recent survey shows how the COVID-19 crises has affected businesses, lives and jobs in the region.
According to the Elgin Middlesex Oxford Workforce Planning and Development Board, one in five responders say they are not working during the COVID-19 crisis.
A COVID-19 Worker Impact Survey obtained 2,568 responses over 16 counties in Southwestern Ontario which included 250 in the London Economic Region.
The survey addressed changes in employment status since March 2, including what sector employees were a part of.
It found 20.5 per cent of responders are now temporarily not working, while 3.4 per cent have been laid off permanently due to the crisis.
And 63 per cent of the employees in the manufacturing sector who were working as of March are unemployed.
Responders between the ages of 18-24 were hit harder than any other age group, with over 46 per cent saying they are no longer working.
More than half of the responders in the London Economic Region say they're concerned about paying their mortgage or rent (52.8 per cent), paying bills (58.9 per cent), and feeding themselves and/or families (51.3 per cent).
"The economic recovery of our communities depends on the economic recovery of our workers. Listening to the voices of those directly affected by the economic impact of COVID-19 is an important step for moving forward," says Debra Mountenay, Executive Director, Elgin Middlesex Oxford Workforce Planning and Development Board.
