From $3000, to a single long black. This was the reality for Wellington’s Karaka Café last Wednesday, when the business turned over a mere $4 during an entire day. Owner Paul Retimanu told news outlet Stuff, the usually popular waterfront spot would normally make up to $3000 on a typical Wednesday, but that was reduced to a single coffee on August 19.
“It just gives us context about what [the move to] level 2 can do,” said Retimanu.
Karaka is just one of the many hospitality businesses struggling with the return to stricter alert level restrictions, which came into effect on August 12.
Auckland was plunged into level 3 lockdown, while the rest of the country moved to level 2. A Restaurant Association of New Zealand survey to be released today reveals 68 per cent of businesses had recorded significant revenue drops so far in August compared with the same period last year. In Auckland, turnover was down 96 per cent compared with 2019, and 90 per cent compared with the same period in July.
Across the rest of the country, sales were down 46 per cent on last year, and 43 per cent on July. Retimanu said Karaka thrived when New Zealand moved to alert level 1 in June, with the following month even more profitable than the same month in 2019.
“But going back into level 2, it’s just turned that tap off again.”
Weekdays were especially difficult, with even fewer customers coming through the door than the last time New Zealand was in level 2, he said.
Restaurant Association of New Zealand members Mike Egan and Steve Logan presented a petition to Cabinet Minister Kris Faafoi on Wednesday, asking for targeted support for the hospitality industry.
“People are a bit more concerned when you get to level 2 and those protocols kick in. It just sets off another whole raft of fear.”
The cafe had about 12 staff on deck when it sold a single coffee on August 19, and about 60 staff on its books in total.
Although the two-week wage subsidy extension was helping, it would only go so far, Retimanu said.
The venue had events booked for a total of 930 people across the three days after level 2 came into effect – all of which had to be cancelled because of gathering limits.
Danger Danger owner Matt McLaughlin said things had gone “from bad to worse” over the past two weeks. “We might as well have just shut up shop.
“The first Friday in level 2, I had my quietest Friday in 15 years – I turned over 15 per cent of what I would normally do on a normal Friday night.” The wage subsidy would “not even touch the sides”, he said.
“It’s going to leave a big hole for us.”
On Wednesday, the Restaurant Association presented a petition to Parliament calling for the Government to subsidise restaurant bills, as was the case in Britain.
Figures from Dot Loves Data show 76 per cent of Wellington businesses had accessed the Government wage subsidy so far. The national average was 75 per cent, while the figure in Auckland was 89 per cent.
Fulla Beanz coffee shop owner Scott Vining told Stuff the Christchurch business experienced a 40 per cent drop in custom “overnight” when the city entered level 2.
“That comes down to all the big, nationwide companies around me recommending that their people work from home.”
The drop in customers had resulted in about $2000 in lost revenue a week, he said.
