'There is going to be carnage soon': Cafes and restaurants struggling to survive in red traffic light setting

Wednesday, 2 February 2022

The hospitality sector has been hit hard by the move to the red traffic light. (File photo)

Restaurants and cafes are being hit hard as customers hunker down at home ahead of the expected Omicron wave, Eftpos New Zealand spending data provided by Dot Loves Data shows.

Mandy Lusk, co-owner of Auckland's Vivace restaurant, said the industry was struggling to survive, and it felt like it had lost more than half its patronage since the country moved to the red light setting on January 23.

“We were better off being closed than trying to deal with this red level,” Lusk said.

Wellington's popular Lido cafe has closed after decades of serving Wellingtonians.

In the two day after the move to red, Vivace had 80 per cent of bookings cancelled till March, she said.

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“I know of two that have closed their doors since Friday, and many who have closed for most of, if not all, their lunch services.

Mandy Lusk, co-owner of Auckland's Vivace, said people in the industry had lost more than 50 per cent of patronage since the move to the red light setting.

“There is going to be carnage soon.”

Eftpos data for the week of January 28 shows central Auckland cafe and restaurant transactions were down 28 per cent, Wellington was down 32 per and Christchurch was down 31 per cent, compared with the same period last year.

Mary Meachen, owner of Old Bank Arcade cafe Smith the Grocer, has not had enough customers through the doors to pay her staff.

Lusk said many customers were avoiding dining in because they could not afford to self-isolate for 10 days if the restaurant was named as a location of interest.

Many companies had told their staff to work from home until further notice, which took away lunchtime customers, she said.

In a city populated by public servants, Wellington was also struggling with the lack of customers.

Smith the Grocer owner Mary Meachen told Stuff last week she had not even had enough customers through the doors to pay that day’s wages.

'Without a wage subsidy, we will be the next to close,' she said.

Other regions had also been hit hard.

Whangarei cafe and restaurant transactions were down 30 per cent, Hamilton was down 26 per cent, Tauranga was down 29 per cent, Rotorua was down 24 per cent, New Plymouth was down 19 per cent and Nelson was down 20 per cent.

Dot Loves Data government director Justin Lester said the expected rise of Omicron infections would hit the hospitality sector hard.

“The Government will need to carefully consider whether they support targeted sectors, such as hospitality, because many businesses won’t be able to survive without the wage subsidy or some equivalent.

“Early data indicates it’s going to be another very tough year,” he said.