Businesses brace for more pain – ‘Clock ends up ticking’

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Auckland business owners are nervously waiting to find out how long the city will remain in lockdown.

Few people were at Queen St's usually busy intersection after the country moved into alert level 3 to battle the Covid-19 pandemic.

Data shows spending in the city reduces by 40 percent during a level 3 lockdown. File photo.
Photo: RNZ / Jordan Bond

Based in a Queen Street arcade, retailer Marbecks Records is all too familiar with alert level 3 and has closed its doors to take only phone and online orders.

“We can handle three days; let’s hope it doesn’t go on,” said the music store’s owner Roger Marbeck.

He is concerned that when the time comes for people to return to the city, they will be cautious.

“That’s the nightmare; it really is, it takes ages for people to start coming back. It depends how quickly businesses return their staff to the city,” Marbeck said.

“We aren’t seeing that traffic at all. Some days you could drive a tank up Queen Street and you wouldn’t hit anybody. Some days in the mornings especially, it’s pretty deserted.”

Many cafes have closed for the three-day lockdown rather than staying open for contactless deliveries.

One cafe owner RNZ contacted was on the brink of folding and did not want to talk on the record.

Economists predict the economic fallout from Auckland’s lockdown will be half that first expected during August’s restrictions.

ASB economists say businesses did better than expected during the last lockdown, when it was estimated the country could shed $440 million of growth. They now forecast half that will be lost in the current lockdown.

Quarter of a million workers stay home

However, the head of the economic agency, Auckland Unlimited, is warning against complacency over the real economic impact of the restrictions.

Chief executive Nick Hill said during alert level 3 250,000 people in Auckland are unable to work – a quarter of the city’s workforce.

“It creates a lot of uncertainty for those individuals about how long this is going to go for and how vulnerable they are. For the employers it’s how long they can afford to pay their wages and salaries while they’re not contributing. The clock ends up ticking,” Hill said.

AUCKLAND,NZ - OCT 13 2015:Traffic on Vulcan Lane in Auckland downtown, New Zealand .It's a popular cobblestone plaza off Queen St home to fashionable restaurants, cafes, pubs and stores.

Around a quarter of Auckland’s workforce are unable to work during an alert level 3 lockdown, Auckland Unlimited says. (file pic)
Photo: 123rf.com

Data also shows spending in the city reduces by 40 percent during a level 3 lockdown.

“There’s a risk that we’re a little bit blasé about the economic impact of Covid on this country so I think it is important that we do have some good facts about actually what’s happening.”

Auckland Council figures show under previous level 3 alerts the number of people in the city fell by almost half.

Auckland Chamber of Commerce chief executive Michael Barnett last year estimated that a level 3 lockdown costs the city $10 million a day.

“It might be a little bit less this time because the expectation is three days,” he said.

He still believes any business with 30 staff will pay $30,000 on overheads over the three days.

“Many of them [business owners] are waiting to see if they are going to have to suck up the cost of the last three days for the good of the whole community or if it’s going to be longer.

“As we watch the results come through people are going to have a better idea if this is something that they can manage or if it’s something that’s just too much.”

Barnett was concerned for the future of Auckland’s CBD.

“When you have a look at the number of empty buildings for sale and for lease signs down there, there has to be some very real commitment to have people come back into the town and work from their offices.”

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