Hospitality business owners brace for a longer lockdown than seven days

Wednesday, 18 August 2021

Edmundo Farrera, owner of La Fuente mezcal and wine bar in the Auckland CBD, says another lockdown is a blow to the business.

Small businesses in hospitality are preparing for the worst, a longer than seven-day lockdown, and hoping for the best.

The lockdown started on Wednesday and will run for seven days in Auckland and Coromandel and three days in the rest of the country initially.

Business owners are expecting it to be longer but hoping it will not.

Auckland CBD mezcal and wine bar owner Edmundo Farrera of La Fuente said the lockdown had followed a terrible July when its regular customers had taken part in the “dry July” campaign.

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Joel Hanssen, owner of Oddfellows Cafe in Sydenham, Christchurch, says even three days in level 4 took its toll on takings.

August had been looking good for bookings and events and now lockdown had put paid to that.

“This is definitely a blow for everything we do. It’s a bit of a hit to the stomach.”

Level 3 and level 4 were terrible for the business because it was so niche and its wines were not the cheapest. He was seeking extra support from his landlord because of lockdown and a bad July.

Because the Delta variant was difficult to get under control, a one-week lockdown in Auckland was probably not enough to do that.

Paul Baker (right) at Vivace Espresso coffee roastery in Christchurch with Bernard Smith, says payments from some wholesale customers were already “bouncing”.

“So I think we are in for at least a week and a half, if we are lucky, if they can manage to trace everything and also keep it under control.”

Christchurch cafe owner Joel Hanssen of Oddfellows in Sydenham said even three days took its toll on takings.

Last year’s just over four-week alert level 4 lockdown “ran the tanks low” using up reserves to top staff wages and continue to pay other overheads.

He was expecting to be locked down for longer than three days. “We’ve got to just sit and wait and see what happens in the next 48 hours.”

It was not trading as consistently day by day as it did pre-Covid-19 because more employees in the businesses around the cafe were working from home now. And it took time to rebuild the momentum of the business after lockdown.

He understood why the Government had to trigger the most strict lockdown, as long as they kept supporting businesses.

Coffee roaster and wholesaler, Paul Baker, general manager of Vivace Espresso, said cafes had been expecting lockdown and had been cutting back their orders. The business supplies about 260 wholesale customers.

The lockdown was likely to progress down through the levels so unlikely to be just seven days in Auckland and three in the rest of the country.

Auckland restaurant owner Krishna Botica says she is on tenterhooks waiting to see if the Government will make changes to how restaurants can operate in lockdowns, specially alert level 2.

“I think that it’s not a short term thing really,” Baker said.

A lot of payments to Vivace Espresso were on direct debit.

“The likes of today I’ve noticed a lot of them have started bouncing already,” Baker said.

The customers had either closed the account or did not have enough money in the account to pay the bill, or had asked him to delay putting the payment through. He estimated about 10 per cent of accounts were like that.

A lot of cafes were struggling. “They are hurting now. Cafes are being sold for real cheap.”

“There will be a closure of a lot of places if it (lockdown) carries on for too long,” Baker said.

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And when lockdown was over there might be a short ‘honeymoon” period, but cafes had seen after other lockdowns that it took time for trade to rebuild.

Auckland restaurant owner and spokeswoman for the Auckland branch of the Restaurant Association, Krishna Botica, said she and her husband had been expecting a lockdown at some stage so were mentally prepared.

The amount of food and beverage wastage was “thousands and thousands of dollars” this time and much greater than other lockdowns because most of the food deliveries came on Monday and Tuesday.

They were on tenterhooks waiting to see if the Government would make changes to what the hospitality industry could do in various alert levels, giving them more chance to trade more effectively.

At level 2, restaurants would rather staff have to wear masks and the restaurants be allowed to have counter-service and have mandated QR code sign-ins than try and serve customers with one staff member to a table and no-counter service.

They understood how important it was to keep trying to eliminate Covid especially as vaccination rates were so low, and they supported the level 4 restrictions.

“We don’t hold out a lot of hope that it will just be the one week and then back to business as usual,” Botica said.

After lockdown there was no instant hospitality recovery.

It took a long time for trade to rebuild because companies and staff had to regain confidence in returning to socialising in public and relearn new habits that were lost in levels 3 and 4.

Restaurant Association chief executive Marisa Bidois said the association had been campaigning for some time for targeted assistance for the industry to help with fixed costs.

“Feedback from members is generally in support of a short, sharp lockdown that gets the job done rather than going back and forward between alert levels.”