Martin Howard, owner and managing director of Coffee Station. Photo / Supplied
Martin Howard, owner and managing director of Coffee Station. Photo / Supplied
As New Zealanders wait to find out if lockdown restrictions will be extended past tomorrow, businesses are preparing for what could be another tough trading period.
Coffee kiosk business Coffee Station, which has five outlets in Auckland train and bus stations, has decided to remain closed until the governmentissues an update tomorrow.
But it is unsure what it would do if alert level 3 lockdown is extended.
Owner and managing director Martin Howard says, like many businesses, Coffee Station lost money by opening under alert level 3 during the first round of lockdown.
The business, which can operate as a takeaway operation under level 3, shut after the "morning rush" yesterday.
Under level 3, it can only make up about 25 per cent of normal trade.
"If you take the wage subsidy out you'd wonder why you bother," Howard told the Herald.
"Our business is proportional to how many people use public transport and there really isn't a lot of people catching public transport in level 3 - only essential workers - and even then those people can drive their car as there isn't much traffic."
Coffee Station began in 2016 and has kiosks in Newmarket, Panmure, New Lynn and Papakura train stations and Smales Farm bus station. It has 14 staff.
It opened Smales Farm after the first round of lockdown despite trading levels down about 25 per cent on pre-Covid levels.
Its wage subsidy ran out at the end of last week.
"Depending on what [the Government] say on the weekend, we'll go into the stores and get them ready for trading in level 3, which means putting up the screens and stickers on the floor," Howard said.
"We're in a better position than a lot of businesses in that we know we've got a business at the end of it. We know people are going to catch public transport again.
"If I had a restaurant on Queen St though, I'd be thinking 'is it worth persevering?'"
Martin Howard, owner and managing director of Coffee Station. Photo / Supplied
Howard said the business had hitched its wagon to Auckland Transport and he was able to remain positive as he knew business would return and improve in the long term albeit not immediately.
But he said the return of Covid-19 community transmission and operating under level 3 would put significant pressure on the business.
Revenue down about 75 per cent during level 3 last time and with wage costs making up 40 per cent of total revenue, opening puts the business in a difficult position. But so does closing.
"It was like groundhog day, how is this happening again? I remember sitting in front of the TV hearing this once before," Howard said about his reaction to Prime Minister Jacinda Ardern's announcement about the move to lockdown on Tuesday evening.
"We've either got a business that is shut if we're in level 4 or is 25 per cent if we're in level 3 and both of those situations lose a whole lot of money. Without a wage subsidy we won't be able to fund that for long."
Cabinet ministers will meet tomorrow to decide whether Auckland might be eased into alert level 2, stay at level 3, or moved to full lockdown.
The Government is contemplating a targeted wage subsidy for Auckland businesses if lockdown is extended past Friday.
Finance Minister Grant Robertson said he has met Treasury officials over a possible Auckland-targeted package, which could involve a wage subsidy extension.
