After lockdown – what are the scenarios?

In March and through the first half of April most employers worked on the principle that the lockdown would be temporary and they could hopefully go back to business almost as normal in late April/May. With the extension of the lockdown there is an increasing realization this will not be the case and employers are trying to make sense of what their businesses might look like over the next few months.

“Hope for the best, but plan for the worst”

In trying to look at future scenarios the best we can do is look at what is being speculated on in the press and post-lockdown scenarios being practiced globally as the best indicator of the future. In this context we should note the following:

1. Various authorities (including the DA) have suggested various scenarios on how the lockdown restrictions might be eased including inter alia:
   1. An Eskom like load shedding schedule where different communities are allowed out on different days/times;
   2. A one week on and one week off situation where one is under lockdown for one week and then allowed to get out for one week;
   3. A male/female split where men are allowed out one day and women the next;
   4. A continued lockdown for the more vulnerable (elderly and those with existing conditions);
   5. A progressive relaxation of the lockdown whilst restricting larger gatherings;
2. Wuhan implemented a relaxation of their lockdown (after 76 days) and allowed travel outside of the region albeit with some restrictions still in place. While there have been some fears of renewed infections these have not yet shown in any WHO figures;
3. Austria started re-opening non-essential stores in mid-April:
   1. Firstly, stores of less than 400m2;
   2. Then shops, malls and hairdressers;
   3. Restaurants and hotels would be only opened later;
   4. Restrictions include one shopper per 20 square meters and everyone required to wear masks in stores and on public transport;
4. New Zealand’s proposals include allowing fast foods and takeaways, plus forestry and construction to open first
5. In Germany some of the lifted restrictions include:
   1. Stores no larger than 8,600 square feet (800m2) allowed to open, but customers are required to maintain a safe distance;
   2. Car dealerships, bicycle shops and bookstores have been allowed to resume business, regardless of size;

So, looking at the above, while there is uncertainty over timing, it would appear the following can be learnt:

• Small premises are likely to open sooner than larger premises and it is likely some restriction on footfall will remain in place (meaning footfall numbers will remain lower);
• Establishments are likely to be required to maintain separation and provide PPE (masks) is clients and/or employees – this should be planned for;
• Travel, restaurants (excl. takeaways) and hotels will probably be the last to open up;

Uncertainty will remain and this will likely dampen consumer demand and corporate investment. Plans should be made for lower turnover across the board with businesses “right-sizing” to match their industries.

Some other things to consider though would include:

• Where it is anticipated supply-chains have de-stocked then there may be a re-stocking impact which may obscure real demand levels in the short term;
• Supply chain restrictions and changes will open opportunities for increased local supply, but will come at an increased cost for consumers;
• Reduced demand will put many businesses at risk and it is expected there will be casualties. Those that remain should find themselves in a stronger position when things recover;