Dot Loves Data's Justin Lester says swathes of CBD businesses could be forced into liquidation if spending didn't pick up. Photo / Georgina Campbell
Dot Loves Data's Justin Lester says swathes of CBD businesses could be forced into liquidation if spending didn't pick up. Photo / Georgina Campbell
Anne Mazer is trying to knit a survival strategy together to keep her Auckland retail stores afloat, but the future remains bleak.
Her Great Kiwi Yarns - operating from two stores on Queen St, in the heart of Auckland city - sells New Zealand-made jumpers, socks and other knitwear.
Foreignstudents and tourists are her best customers, but international borders remain fixed shut due to Covid-19 restrictions.
And while the Queen's Birthday long weekend - the first long weekend since the country moved to alert level 3 - brought an uptick in sales, it was still a far cry from what was needed.
"Compared to what we usually do, our sales were ridiculous, it was way under 50 per cent," Mazer said.
Making the downturn harder was the uncertainty over when or if sales would return to profitable levels, she said.
Dot Loves Data's Justin Lester says swathes of CBD businesses could be forced into liquidation if spending didn't pick up. Photo / Georgina Campbell
It comes as new data showed Auckland CBD had suffered the country's second biggest drop-off in Eftpos spending since the lockdown, behind only Queenstown.
Spending in the South Island resort town had been as low as 85 per cent down on 2019 figures, analysts Dot Loves Data said.
"Auckland CBD consumer spend remains at meltdown levels, where large swathes of retail businesses may be forced into liquidation," Dot Loves Data's Justin Lester said.
"While much of New Zealand saw spending improve over Queen's Birthday weekend, Auckland CBD remained down 35.6 per cent compared with the same period in 2019."
While this was an improvement on level 3 - when Auckland CBD consumer spend was down 79 per cent compared with 2019 - it was still at a level where businesses could not trade profitably, Lester said.
The sectors hardest hit were:
• Hotels and motels: Down 87.1 per cent • Entertainment, including movie theatres: Down 64.5 per cent • Bars: Down 46.8 per cent • Fast food: Down 44.8 per cent • Restaurants: Down 39.7 per cent • Petrol stations: Down 25.7 per cent • Health services: Down 7.8 per cent • Department stores: Down 5.5 per cent • Clothing: Down 3.5 per cent
The sectors performing better included:
• Beer, wine and liquor sales up 21.6 per cent • Beauty treatments (including hairdressers): Up 10.1 per cent • Household appliances: Up 2.8 per cent
Heart Of The City chief executive Viv Beck said the dual economic hit from the Covid-19 pandemic and city construction projects had hurt CBD businesses. Photo / Doug Sherring
Viv Beck, chief executive of city centre business association Heart of the City, said the pandemic had been particularly challenging in the CBD.
"We've had the effect early on from the impact of loss of international tourists, international students, large-scale events and with people working from home."
Restaurant Association of NZ chief executive Marisa Bidois said her team's research had also shown sales at Auckland CBD eateries had been severely hit.
The pain was also being felt nationally. Twenty-nine per cent of the association's national members said in a survey their income was severely down this long weekend compared with last year.
In Auckland CBD, Covid-19's economic pain came on top of the economic hammering the City Rail Link and other construction projects had already caused to city businesses.
Mai Thai - one of Auckland's oldest Thai restaurants - closed its doors at the end of April because of the double hit from Covid-19 and the CRL project.
Restaurant Association chief executive Marisa Bidois said eateries across the country were feeling the pain. Photo / File
Business owners at Auckland's Elliot Stables dining village also warned many of their eateries might not survive the pandemic due to the lockdown's restrictions on trade.
Krishna Botica, co-owner of Cafe Hanoi, Xuxu Dumpling Bar and Saan, said her eateries had experienced an uptick in business at the start of alert level 3 last month when customers could once again dine-in at restaurants.
Alert level 1 now couldn't come soon enough for Botica.
"We know for sure we are not going to get back to 100 per cent," she said.
"We are hoping for 80 per cent, but that can only happen at level 1."
Ofir Yudilevich, owner of The Jefferson whisky bar in downtown Auckland, said bars had also been crippled under alert level 2
The Jefferson's usual 160-person capacity had been reduced to 60 to adhere to level 2 safety measures.
Krishna Botica, co-owner of Cafe Hanoi, Xuxu Dumpling Bar and Saan, said her restaurant's recovery to pre-Covid levels could only take place in level 1. Photo / Dean Purcell.
"One Friday night [during level 2] we had 196 people through the door, and we would have turned away about 200 more," he said.
Level 1 will mean social distancing rules no longer apply and people will be free to stand and drink at the bar while mixing and mingling with others.
Matt Jorgensen, owner of Auckland's Ding Dong Lounge and Infinity night clubs, said alert level 1 sounded like "heaven".
He did a test night under alert level 2 but said it wasn't economical for him to be open.
"One of my clubs takes 550 people, so a 100-person limit is very restrictive," he said.
"Especially because we are only open two nights a week and we are only busy for kind of six hours a week, so if we can't fill the place up we can't make any money."
Heart of the City's Beck hoped to see city workers back in their CBD offices as soon as possible, popping into their local shops and cafes at lunch and grabbing a show or drink in the evening.
"That's the big one," she said.
The Jefferson Bar owner Ofir Yudilevich said he had to turn away patrons during level 2 because of safety restrictions. Photo / Dean Purcell.
Following that she hoped to see international students return safely, a travel bubble opened with Australia and major events return as soon as possible.
Great Kiwi Yarns' Mazer would like to see the travel bubble extended to other "safe" countries like South Korea and China.
Normally in June, international students begin arriving in Auckland for the start of July university classes, she said.
This would often bring new Chinese students into Mazer's shops with their families.
Not only would the visitors buy woollen clothes for the student, they would also buy for the other family members present as well as for family back in China, Mazer said.
At the moment, Mazer was relying on the Government's wage subsidy scheme to help pay her staff.
She had cut their hours back to the minimum amount that would still qualify for the subsidy scheme.
That left her to work 12-14 hour shifts every day to fill the gaps.
She said if a travel bubble opened with Australia in July, it might just do enough to keep her stores running.
And if the bubble doesn't open by the time the wage subsidy runs out?
"We will have to let people go, we have no choice - it's as simple as that."
