If you have got out and about, two things you may have noticed, the lack of people around and the number of businesses that are closed. Both related to each. Which businesses will reopen when this pandemic is over? Hopefully all, but it is most likely that some won’t. Whether it be that covid-19 was the final straw, the owners mental health, or as an ongoing investment decision it is better to just walk away. The persons who can more easily make a pure investment decision to not reopen are the out of town investors; who lease their premises and can move their stock to a store in another city, or if only held on consignment return back to their suppliers, maybe text former employees that the business is not reopening and leave it to their lawyers to work out the balance of their lease. Gone. The share price the only thing that appears as a positive; which directly benefits the decision makers.
Imagine you are a business owner, that owns the premises you operate from, have good long time employees and have paid for the stock on your shelves; how easy is it for you to make a pure investment decision to reopen or not? Bloody hard, impossible to not let emotion come into play. Yet, these type of businesses won’t get treated any differently to the investor only companies by the government with the stimulus packages. Even though these are the businesses, that because of their emotional ties with the community, are more vital to the community’s recovery. The more of these businesses that reopen in our community the quicker we recover. As these businesses make emotional decisions, that may appear illogical to an investor. Emotional decisions to keep trading or reopen when allowed to, despite the pain (financial and mental) it is causing. If you think local business owners don’t think like this, let me tell you what one, who’s store is currently still open while the national stores beside are closed, said last week, “you can’t get sales when your doors are closed, you hope you get enough business each day to cover the daily costs to open, you hope your customers appreciate what you are doing, you hope this won’t go for much longer, you got to keep hoping”. Can you imagine a CEO in Sydney saying this about a store they have in Rockhampton. Their company’s share price is arguably where their focus is.
So, if government can’t be seen to favour one type of business over another with their stimulus payments, despite locally owned businesses being the ones most likely to enable a community to recover quicker, it is left to us to show a preference. Online shopping is unsurprisingly increasing, which sites you decide to click on to buy products from affects our community. Click on the national (or international) store, your money leaves our community (no matter if they have stores here), pandemic recovery time lengthens. Click on the locally owned business, your money stays and circulates here, pandemic recovery is hastened. Something to think about.
This means that when the dust settles, we need to stop tilting the playing field against local businesses, and start tearing down the barriers between them and success. We need to show them preference over the investor companies that will take their bailout money and, when their profits aren’t cutting it, leave our towns without a second thought.