17 May 2020 -
Greetings from Barcelona, yep the world is still spinning and the sun came up today. Been getting a few requests so here’s an update from this part of the world.
The numbers 1... 2... 3...
So the Spanish government announced their three phase plan to reopen the economy. The entire country moved to the first phase two weeks ago. Though those tricky politicians moved everyone to Phase 0. Yep, it’s a FOUR part plan.
With the first phase we can go outside, during specific hours, for one hour a day and walk around. That’s it.
This past week every place in Spain moved to Phase 1, except for Madrid and Barcelona. So basically 50% of the population is still stuck at the mysterious Phase 0.
We’ve been at this for 65 days and we're both pretty happy with being stuck at Phase 0.
The basic numbers:
- In our neighborhood (Poble Sec) we’ve had a little under 250 confirmed and tested cases which comes to about 2.2% of the population.
- Total suspected cases in Catalunya runs about 3.1x the confirmed count. So we’ve had about 775 cases within 1/4mile of our home. So it’s really about 6.8% of the population has been infected.
- These numbers track pretty well with the comprehensive study of the Spanish population just released that 5% of the population was infected. With Madrid seeing about 10-12% and Barcelona at 7% infection rates.
Reality. Here’s a collection of photos taken in my neighborhood. These are our neighbors, that’s our health clinic 2 blocks away.
So why are we OK with being stuck at “Phase 0”?
- 25,000 new cases were reported in Catalunya (like your state or province) in the last 7 days. Of those 12,000 of the new cases were reported within 2 miles of our home.
- Today there are 20,800 active cases in Catalunya - this is the highest the number has ever been. About half are here in the city of Barcelona.
- Deaths are going down, infection rates are going down but the number of folks actively infected is going up.
- Our new infection rate has been bouncing around about +0.5% a day for the past week.
In sum, with just 5% of the population infected this is what happened when the infections got out of control. It’s taken 65 (plus) days to get it under some control to under 0.5% new infections per day.
Thanks, but we’ll hang out at Phase 0 for a little while longer.
Opening up and operating like before?
Basically our thoughts from Barcelona looking to other places is “insanity”.
No, no, no don’t do it.
We don’t know each situation, but you’ll see in 3 weeks the results, they just might be horrific.
As best we can sum it up: we live in a new world. Going back to living as before just doesn’t work right now.
One final thought on numbers, opening, closing and death. We recently asked ourselves “what if this doesn’t go away?” Kind of like AIDS, all those vaccines and miracle science just can’t quite cut it. It might be worth the effort to think that through a bit.
Our first 65 days, right now our planning horizon is life is like this for at least the next two years. So we’re about 10% of our way through kind of clawing back to life as before.
Business and economics
So how the heck is this going to work? The world has this virus floating around so lots and lots of things have to change.
It’s quite the challenge. Here’s a fun read, a 33 page government document (in Spanish) describing the precautions businesses must take to re-open. Lot’s a bleach and social distancing from now onwards.
We’re seeing it is going to be that hard just to re-open - like really really hard. Way more than we imagined.
There is a giant list of entire economic sectors that I cannot for the life of me see how any make any money in the next two years. Other areas look promising...
Not so good: Airlines, Cruise Ships, Hotels, Tourist Services, Car Rental, Bike Rental, Tour Boats, Amusement Parks, Museums, Concerts, Restaurants and Bars, Shopping Malls, Movie Theaters, Bus Companies, Taxi’s, “Sharing Anything Companies”, Clothing Manufacture and Retail, Auto/Plane/Boat/Bus Manufacturing, Gyms, Oil and Gas Industry, Refineries, Team Sports, Retail Property Owners, Home and Furniture Retail, Event Ticketing, Advertising Agencies, Resorts (any), Bowling Alleys, Casinos. Oh and the most painful of them all - “All You Can Eat Buffets”
Oh the lucky ones: Pharmacies, Tobacco Shops, Grocery Stores, Liquor Stores, Garden Centers, Bike Shops, Motorcycle and Scooter Shops, Technology Services, Bakeries, Ecommerce, Package Delivery, Home Fitness anything, Laundromats, Teachers, Nurses, Doctors, Urban Planners, Financial (non-mortgage), Insurance, Online Content (any).
12% of Spain's GDP is from tourism, think how Florida, Alaska, Nevada and Hawaii will fare.
Most businesses here in Barcelona are still closed. I expect many small businesses will never open again and those small businesses that do re-open will find it very tough to survive. It looks like Nissan is closing their car manufacturing permanently.
A quick view of random data points from my block - 200 feet of Barcelona:
- The taxi driver that took me and my sick dog to the hospital said his fares were about 20% of normal. He usually is about 50% tourists and 50% locals.
- Bar de Perez, the local owner, opened up last week. Her early morning work crowd is not there. No one is allowed inside - only window service. 1 to 2 people stopping by for a coffee. Best estimate 20-30% normal.
- Backpacker’s hostel. Was operating on thin margins. Been closed for 60 days. Probably might reopen in 2021.
- Architects office on the corner. Closed down, they packed everything into a van at the end of April. They are not coming back.
- Theatre / Comedy School. They’ve been closed since March. Maybe they are doing something online? I hope so.
- Construction company. A pretty good size 50 -70 person company. Only open for emergencies. Thus impacting the local bar above.
- Blai Street (around the corner) is a well known pedestrian street with about 30-40 bars and restaurants. All closed, heavily reliant on tourists. I’d give 50% a chance of opening again with the same owners before 2021.
Who will still be here in 2021?
In general, we’re seeing the businesses that might have a chance of surviving are the ones that are currently open - someway somehow. Getting cash in the door and moving inventory. Those that have dug-in and worked at creating a new way to make money have a chance to stand up tomorrow.
The ones we’re very skeptical about are the ones that are “waiting” to re-open and continue their previous business model. My thoughts: “It won’t work - it can’t work.”
How we’re looking at this…
The can’t list:
- No in person classes - not until 2021 at least
- No tourist groups - not until 2021 at least
- No weekend markets - they are closed, and we’re not real excited about all the folks
- No inside retail - our space is too small
- No restaurant sales - no one is opening a new restaurant anytime soon
So what’s the small business plan for the rest of 2020?
Retail sales. We’re opening up our retail shop. Though we cannot allow anyone inside as it’s too small. So we are displaying products in the window and converting the doorway into a display. That way local folks can buy something without having to come into the shop. We’re making smaller, more affordable items as the tourists are all gone.
Build online sales. We’re full-time building up our online sales through advertising, social media, product placement you name it we’re giving it a shot to see what works. Last month we shipped stuff to folks in Europe, North America and Australia. Little by little we’re growing this part of our business. Amazing, this month we have a thing called an “order list”. It’s not a long list, but hey we have one.
Corporate/designer sales. Working to contact designers, wedding planners and larger companies that have clients or budget for our products. We’ve got one customer evaluating samples. So a little bit there.
Expand our space. We’re pretty tight on space and had plans to expand our space. We finally got our building permit approved, yep even during a pandemic. For the new retail/showroom space we are working on revising the plans to fit our new world.
So by the end of 2020, just maybe we’ll have:
- Viable online sales channel
- More corporate/designer clients
- New larger (Covid-ready) retail ceramics showroom
- New larger ceramics studio
- New artist residency studio - apartment space
Small business folks
From our perspective this isn’t a “survive wait and see” moment. Go build something that inspires you.
Stuff is moving around very quickly. That is opportunity, take advantage of it. There’s a lot unknown, limit as best you can future risk, and get moving.
Take decisive action. Get up, get going and play to win.
Folks with ideas send them on over.
Hope you all stay healthy and safe in our new world.
If you know of anyone that needs corporate gifts, getting married, just broke a plate or is in need of a fine handmade coffee cup (more online soon) here’s how we can help out.
Oh and wash your hands,
Wendy and Eric
Taller Gingell Barcelona
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