Covid-19: Lockdown costs central Auckland businesses $110 million in sales

Sunday, 26 September 2021

Auckland’s latest lockdown has cost central city businesses $110 million in sales, according to Heart of the City.

In a statement released on Sunday, the inner-city business group estimated customer-facing businesses in the city centre had lost an average of $85,000 in consumer spending since the beginning of lockdown on August 17.

The cost of the current lockdown was comparable to level 4 in 2020 and brought the total loss for about 1300 businesses to nearly $800 million since January 2020, an average of almost $600,000 per business, it said.

Heart of the City chief executive Viv Beck​ said the numbers showed immediate action was needed to avert a greater fallout in Auckland and its city centre.

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“What more evidence is needed that Auckland and its city centre are facing a disproportionate impact from Covid-19?

“Business and sector groups like ours have been calling for targeted support for a very long time, and it’s needed now,” Beck said.

“These are not just numbers, they represent thousands of hard-working people, their staff, their families, their health – sympathy for Auckland must be backed up with tangible support.”

Beck said the figures for the Auckland economy as a whole didn’t reflect the reality for many businesses.

“The city centre has a diverse mix of businesses, many of whom can operate successfully remotely and there are some very good news stories amongst them.

“However, many can’t, and the impacts are very severe. The Government must be more proactive and give businesses as much certainty as possible, including what financial support will be available at level 2.”

Cabinet is set to review Auckland’s alert level settings on October 4, but Beck said there was “a real risk of business failures” before then.

“Letting this happen at this stage doesn’t make sense. It will mean job losses, a reduced tax-take and higher costs related to unemployment. It will also mean the investment in grants hasn’t been maximised.”

Some businesses also needed access to capital and Treasury had been asked to evaluate a low-cost, easy-to-repay overdraft facility that would help businesses through the pandemic, Beck said.

The concept was proposed last year by economist Dr Richard Meade and Treasury had indicated it was being considered along with other options.

However, Beck said time was of the essence.

“Whilst there are actions underway to support recovery, including event planning, destination marketing and other initiatives to bring people back, more needs to be done, and central government funding and support is needed.”