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“Where you see households not spending as much is on services that are just not available,” Janzen said.
Demand for services such as international air travel, which started plummeting in March, have yet to recover. Nor has demand for cruise ships.
Restaurants and bars, focused on dine-in experiences, have also been badly hurt.
Movie theatres, which had faced challenges from on-demand internet streaming platforms, are now battling on multiple fronts. First, there is the challenge of persuading customers that they can safely gather inside to watch a show. But there is also a looming challenge caused by the fact that the pipeline of new movies is drying up as a result of the pandemic.
“It’s the million-dollar question: what will happen to this business?” said Tirtha Dhar, Interim Chair and Associate Professor at Gordon S. Lang School of Business and Economics at the University of Guelph.
Dhar said ticket sales at movie theatres were declining before the pandemic because of pressure from Netflix, Amazon Prime, and other online streaming platforms. As a result, movie theaters are being used for new purposes, such as the live telecast of sporting and other events.
He predicted this year’s shopping season would be unusual. Consumer demand may be normal, but as COVID-19 continues to disrupt supply chains, there will be shortages of certain goods and price hikes, Dhar said.
Beyond the holiday shopping season, spending habits are changing in a multitude of ways: for example, as companies look to shift away from office buildings to save money, more people are working from home.
“What is going to happen when COVID-19 is over? Are we going to go back to our old habits?” Dhar asked. “The whole ecosystem of consumption is changing. Consumers are developing a lot of different habits.”
Financial Post
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