Paris Starts a Strange New Coronavirus Life

(Bloomberg Opinion) -- With face masks at the ready and their hands slathered in gel, patient Parisians lined up on Monday at a safe distance from one another for a first taste of real-life shopping after almost two months of draconian lockdown. After weeks of not being allowed to leave the house without an authorization form, or to go jogging during the daytime, freedom meant being able to browse in a bookstore, visit a barber or stroll along the Seine. .The scenes point to a strange new life for Paris’s city dwellers, and a limbo of sorts before a looming economic storm strikes..It’s encouraging that Paris and its surrounding areas are stirring to life after stay-at-home measures slashed footfall in stores and other entertainment venues by around 80%, according to Google. So-called “revenge buying” — pent-up demand for retail therapy after weeks of focusing on essential items and groceries — is happening despite ongoing social-distancing measures. Shoppers were out looking for clothes, books, gadgets and the obligatory haircut, and they were even willing to brave larger retail outlets such as Zara and Fnac book and electronics stores, with lines 50 people deep. Traffic congestion in Paris, tracked by TomTom, has hit levels not seen since March. .For every shop back open in Paris’s popular central districts, though, it looked like at least two or three were still shut. That included big department stores such as Galeries Lafayette, but also movie theaters, restaurants and bars, which the government is keeping shut until at least June. As with other cities easing lockdowns worldwide, the risk of a flare-up in infections has led to a very cautious approach..Paris is no longer a city of cafe culture, or of epicurean delights where budding Hemingways are served St. James rum and oysters — it’s takeout or nothing. Stoic acceptance of restrictions is the new Parisian philosophy. Plenty of people now wear some form of face covering out in the streets even though they’re only really required to on public transport. Green or white arrows on the floor of stores guide customers in order to avoid accidental human contact, and one million stickers regulate the flow of human traffic across the metro system. It’s Paris as a simulacrum of an Asian city that puts hygiene first (with a few exceptions)..The vigilance is warranted. The greater Paris region accounts for almost 40% of the country’s total hospital death toll from the new coronavirus, and its intensive-care capacity is still stretched..The hope is that in a few months’ time, the city will recover its vim, provided fears of a new wave of infections fail to come to pass. But the prospect of a smooth “V-shaped” recovery — one in which the economy bounces back from the low point of the lockdown — is looking increasingly remote. France’s gross domestic product, of which the Paris region accounts for about one-third, contracted 5.8% in the first quarter — the worst reading since records began. It’s expected to collapse 16.4% in the second quarter, according to Bloomberg Economics..If Parisians are still able to go shopping in this environment, it’s thanks to the state, which has footed the bill for 12 million French workers’ furlough wages, or six out of 10 private-sector jobs. That won’t last forever: At some point, when the worst of the health crisis passes and we all begin to live with this new normal, the state will expect companies to take on more of the wage burden. .It’s this transition from an economy on life support to one able to stand on its own two feet that will likely squeeze those masked shoppers and the businesses so desperately eager to serve them. Some 40% of consumers expect to spend less after lockdown, according to one survey. At the same time, fixed costs will go up, as stores redesign their layout and equip their staff for social distancing. Low margins in the services sector mean that almost 30% of restaurants and cafes could go belly up, according to industry representatives..In ordinary times domestic consumer demand would be bolstered by tourists pouring into Paris, but that escape valve isn’t there. France’s 2 million Chinese annual visitors and 4 billion euros ($4.4 billion) in associated spending are nowhere to be seen, and their temples of commerce like the Mandarin-language duty-free Galeries Lafayette store lie empty. Disneyland Paris, a tourist attraction on par with Notre Dame or the Eiffel Tower, is also closed. .Rather than enjoying an epicurean summer, Paris could find itself confronting a Schumpeterian one of creative destruction as swathes of its economy go bust. A hit to demand and supply, along with tighter credit conditions, would crush businesses and burst a real-estate bubble that has been expanding for years. White-collar workers accustomed to remote working and fed up of apartment life after lockdown are already looking to buy homes with gardens outside Paris..There are solutions on offer that policy makers might consider: Greater fiscal spending at the national or European level would limit the economic damage, while urban-planning strategies like the “15-minute city” could make Paris more livable. Until then, a lot depends on the virus — and revenge buyers..This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners..Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes..©2020 Bloomberg L.P.

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Paris Starts a Strange New Coronavirus Life

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