Let’s look more about the impact to the economy related to office space… not the space itself, but those businesses around it.
According to the Starbucks, COVID-19 — and the related fall in foot traffic — led to a revenue decline of $2.3B last quarter.
As highlighted by Medium’s Steve LeVine , Starbucks is only one data point in a much bigger story.
Levine rattles off some sobering stats:
- Tens of thousands of office support workers have lost their jobs
- Around $2T in corporate travel will not happen this year
- As of July, ~$21B of hotel-related mortgage loans were delinquent (versus ~$1.15B pre-pandemic)
Why do we care?
The current economic situation – the recession – is different from previous ones in that the root cause is not related to financial markets. The Great Recession or the Great Depression both were related to credit and financial markets. This current dip is all about services – any area of the economy dependent on face-to-face interactions.
Thus, we care because this is the filter to do analysis. At a micro level, you can make predictions about what your customers will feel in impact based on that lens.
Second, you can safely assume that this will be the conditions until a vaccine is released AND distributed.
This is my data driven counter point to optimism talk of Q4 recovery.
The upside – you can look for opportunities in pivots that address these problems.