Businesses hit with escalating costs that are eroding bottom lines

Ginny Clark from Decor Gardenworld says the business has defied the odds and demand was increasing. Photo / Carmen Hall

''A never-ending story'' is how one business owner describes escalating costs while others are hopeful the odds will turn in their favour in the wake of the omicron peak.

Tristan Webb, co-owner of and instructor at Skydive Tauranga, said the company had elected to close for three days during the week due to the slowdown - which was its usual practice during the winter months.

''We decided to do that a bit earlier this year because demand wasn't really there.

He said the business had absorbed a lot of costs for fuel and insurance.

''Obviously, we have burnt quite a lot of fuel over the year so that is our major one.''

However, Webb said fortunately the company was not reliant on international tourism, and although bookings were down by 20 to 30 per cent he was confident about the future.

''Skydiving is a thing that a lot of people have on their bucket list. Because we were primarily domestic-focused anyway our traditional customers still came out in force. We have had great support from the local community.''

Aucklanders, Wellingtonians and people from Christchurch also went to Mount Maunganui for holidays.

''So we survived and we were okay.''

Last weekend it had its first group from Australia since the borders closed and that increased Webb's confidence.

''That was really positive, so going forward we are anticipating a good summer. Fingers crossed we hope things will improve.''

Our House and The Rotorua International on Eat Street director Tim Smith said business was good, although it had been impacted by Covid and people needing to isolate - himself included.

''That has been really challenging.''

However, the opening of the borders was ''really exciting''.

''Some businesses have been at the lowest they have ever been but it is starting to get better. There is a nice mood coming back to hospitality.''

Our House and The Rotorua International had always paid staff a living wage and the rise again in September had been accounted for, Smith said.

He was also lucky to have consistent suppliers but in the future they might need to look at increasing some prices.

Ginny Clark, from Decor Gardenworld, said it had been really busy and she estimated sales had increased by about 10 per cent despite Covid.

People were getting back to learning the basics, getting into the garden and growing their own food.

''With the cost of food going up I think that is going to become more pertinent.''

She said the Bay of Plenty had a great growing environment.

However, Clark acknowledged there were supply challenges.

''I always say to people you know we haven't got this because a plant is not like a cake, you can't make it in an afternoon. So you have to plan.''

Clark said it ordered up to a year or more in advance but even then there were supply chain issues which mean shortages in some crops.

Freight, production and labour costs had also gone up.

''It's a big, never-ending story - every day we get a new list with price increases.''