Intersection between Queen and Victoria Streets in Auckland CBD. Photo / Getty Images
Intersection between Queen and Victoria Streets in Auckland CBD. Photo / Getty Images
The return to office working has been slower following the second lockdown in Auckland, sparking fears for what that means for already struggling businesses.
Foot traffic in Auckland last week was down about 40 per cent under alert level 2.5 - comparatively better than the 50 per cent decrease inthe first week of level 2 in May.
But the phased return to the office for about 130,000 workers in the city centre had so far appeared to be slower than the first time round - as expected, Heart of the City chief executive Viv Beck said, which had resulted in a mixed bag of trading conditions.
Level 2.5 had already proven challenging for the about 1500 customer-facing retail businesses in the city centre, and there had already been an increase in store closures, including on Queen St, Beck told the Herald.
"It is a scenario where their costs are higher and their revenue is down," Beck said, adding that it was "heartbreaking" to see restaurants turn people away due to alert level capacity restrictions.
"It does vary a bit depending on the businesses you talk to. [But] we know overall that it is very, very challenging."
Under level 2 the first time round, spending across Auckland city centre was down 46 per cent or $40 million compared to the same time last year.
Heart of the City will receive sales data for the first week of Level 2.5 later this week.
Under level 3 the first time round, spending across Auckland city was down more than 80 per cent, resulting in a loss of $60m. About $56m was lost under level 3 most recently.
The 40 per cent reduction in foot traffic in the city could be attributed to no domestic students about due to semester break, no tourists and international students and a chunk of office workers still working from home.
Fewer workers coming back to work in their CBD offices meant significantly less trading potential for businesses in the area. The delayed return to level 1 would likely mean a greater loss than $40m under the current alert level as some workers continued to work from home until then, Beck said.
"There's over 130,000 people a day that would normally be in there - there's no question it has an impact on the businesses that are there largely to either service tourists, students and workers."
Stats NZ data shows that more than 40 per cent of employed New Zealanders worked from home during lockdown levels 3 and 4 in April and May.
Almost one million New Zealanders did some work from home in the June quarter.
Intersection between Queen and Victoria Streets in Auckland CBD. Photo / Getty Images
Over the weekend, Wynyard Quarter was busy and bustling, while there were queues outside Commercial Bay stores Tommy Hilfiger and Calvin Klein. Britomart and Takutai Square, however, was quiet.
Some businesses in the CBD were busy, some were quiet, and this was also dependent on what day of the week it was.
Some businesses were quieter on weekdays than they were on the weekends, she said.
"Some are busy, some aren't, it varies a little bit and it is a bit of a mixture. Overall, this is now an extended period of restricted trading which is not going to be easy."
Heart of the City says was trying to stimulate spending and activity in the centre, including by extending Restaurant Month deals into September, Beck said.
Viv Beck, photographed in Auckland CBD during busier days. Photo / Doug Sherring
Events and hospitality businesses were finding the return to level 2.5 the hardest, Beck said, having to keep gatherings and groups to a maximum of 10 people and operating in line with seated service, social distancing and single servers per table.
Auckland city centre had few retail vacancies before Covid-19, Beck said, but now had them on the main Queen St strip and off smaller side streets such as High St.
Beck said she was concerned about the potential of more business closures.
"We are concerned about the impact on businesses and the challenges they are facing and the impact of having businesses close. We're certainly doing work on alternatives and how space can be used differently. There is no question this is and going to continue to have a big impact on small businesses, particularly in the city centre."
