I own a busy main street café in an affluent suburb of Auckland with my husband, his sister, and her husband.
On 28 February 2020, New Zealand recorded its first COVID-19 case, and we were moved to Alert Level 2 on 21 March. With no real guidance of how to operate, we attempted to socially distance staff and customers and joined the scramble for masks. On 23 March, the government announced we were at Alert Level 3 and gave 48 hours’ notice that, as a country, we would be moving to Level 4 lockdown. We closed up, divided the unsold food between the partnership and staff, and bunkered down at home. We dropped excess muffins and food off to neighbours.
Within four days we went from full operation to indefinite closure.
It felt like we were in an apocalypse, only with homeschooling. Everyone was scared of the unknown. How would we pay our rent, our staff, and our outstanding invoices? Would the government’s wage subsidy and business financial support be enough? (Spoiler alert: it wasn’t.) We were lucky that our business landlord reduced our rent to 30%, with the rest to be repaid gradually once we reopened.
The little dollar store next door – with a single owner operator, no staff, just her on her own – had no rent reduction. The store’s still operating, but with a very tenuous future.
Perhaps the government’s financial gurus thought that our personal wage subsidy was adequate to cover our mortgage, groceries and utilities, business utilities and rent, body corp fees (NZ$2,500-$5,000 at a time), GST, and Pay As You Earn (PAYE) taxes. The owner of a local butchery close to our home committed suicide because of the relentless stress and financial pressure he was under. The government had deemed it was unsafe for small, essential goods stores to open, causing undue financial hardship and countless tons of waste of local produce around the country. This hit us hard because we know it could have been prevented.
We stayed in this fearful state for almost a month before moving to Level 3 on 27 April 2020. We could have opened for contactless trading that day but we chose not to because we make and bake all our own food, and at Level 3 we couldn’t maintain social distancing for staff in our kitchen, and would require too many people on site to ensure our staff’s safety.
Towards the end of Level 3, our cash position meant that we had to take out the government’s business loan “support” – which turned out to be a great way to give small businesses much-needed cashflow, and then strip them of the chance to bounce back when they reopened because of the repayments.
This loan was a lump sum around NZ$2,000–$5,000 plus $1,500 for each of your full-time staff. Once you reopened, you had to pay it back – even though your sales were going to be down because you had restricted trading, and you’d still be trying to pay off all the other invoices you’d had trouble covering. Our coffee invoice alone was typically around NZ$1,000 for one week.
The first week back you’d have to buy all of your food, somehow, and from the second week on you’d pay your staff and invoices from the previous week, plus all your other outstanding invoices, plus your government loan. There was no relief for GST; there was no relief for PAYE. You’d just have to pay it all back.
I thought, what’s the point? That helped me for a very brief moment. But it didn’t ensure our survival.
We reopened in mid-May once we moved to Level 2 restrictions. Hospitality trading at Level 2 was confusing, tricky, and costly. The government’s guidelines appeared to be written with no understanding of how hospitality works.
Each group that came into the café could only have contact with one person in the business. Say we have 20 tables; if one of my staff greets a group at the door and seats them at their table, from that point that staff member is the only person who can take the order, deliver all the coffee and food, take the payments, clear the table, and answer any questions. No-one else is permitted to contact that table.
Normally we would have one person making coffee, one on the till, and maybe a couple of extra staff. But Level 2 meant only one of my staff could greet, seat, take and deliver orders and work the till per table. Even with extra staff, one person might be running 30 coffees and meals!
It meant we had to roster a minimum of two extra staff to cover the single-server per table rule. We often had to remake food and coffee because it had gone cold waiting for the single server who could take it to their tables, even if there were other staff available. We lost at least 50% of our seating. The guidelines required that all customers be seated to order, which meant we lost table space for dine-in customers because our many takeaway customers had to be sitting down to order. We had to pay at least NZ$1,000 per week to cover increased staff costs, while at the same time accept a loss of table space and therefore a downturn in sales.
Each time we bounced in and out of lockdown throughout 2020–21 – I don’t even know how many times anymore – we would easily lose NZ$10,000 worth of stock. We would get around 12 hours’ notice of closure. A whole week’s worth of produce would either be binned or distributed for free. Our premium coffee beans, freshly roasted a couple of suburbs away, could not wait weeks to be used – we’re talking 32kg of beans each time that we would have to pay for but not use. Every lockdown, we partners would have to dig into our savings to top up the government’s small wage subsidy – NZ$500 per week – for our staff, because the government required business owners to make up the difference.
There was also the Auckland lockdown border issue. Auckland had different levels of restrictions than other parts of the country, and a border was drawn around Auckland to define it. From the August 2020 lockdown, my café was inside the Auckland border, but the village where I live was five minutes outside. About 90% of us in the village worked in Auckland.
It was impossible to get to the café because we couldn’t cross the border – we weren’t essential workers (even though my brother-in-law lived inside the border, he wasn’t able to run the business without a barista or baker). Even my essential-worker neighbour, who manages a daycare centre, had trouble getting across. It would take her two hours to get to the border because of all the backed-up traffic, and even then, she would still sometimes not be allowed through.
We’re a small village and we didn’t have a supermarket until this year – we only had a butcher. But they weren’t allowed to open because they weren’t considered essential either. If we wanted to get groceries we had to drive to other towns, which were a distance away. We had to drive for an hour just to get bananas.
Our village was put back inside in the Auckland border on Valentine’s Day 2021. I found out from the village Facebook page.
On 17 August this year, two days after my youngest child turned two years old, we were shot back into Level 4 restrictions due to Delta entering the community. We’d celebrated his first birthday in lockdown in 2020. We went through the close-down process like pros, distributing stock and dropping food off for neighbours. We prepared for homeschool again with our six-year-old. We steeled ourselves for the heartache and tears of our three-year-old and his best friend, who live opposite each other but cannot cross the road to play.
We called suppliers and apologised to them for having no way to pay in full. Due to a change in process, a filing error and the inability of Work and Income (a government department) to sort it out, we received the wage subsidy for our staff, but not ourselves. Four weeks into lockdown with no income makes grocery shopping for three ravenous little boys very difficult. I had to tell the person from Work and Income that I hadn’t bought groceries for nearly two weeks because we had no money. He said: “I’m really sorry, it’s not like in my control. We haven’t really been told what to do either.”
We finally got paid in week five.
Thirteen weeks and counting and our patience is wearing thin. My social media posts of the delicious lockdown treats I’ve baked at home have waned. We’re thankful that our family and staff are safe but we question how we will come back this time. Aside from the immediate cost of lost stock, we do not know how much we have lost this time.
When we reopen, we will have to pay over NZ$150,000 in deferred GST, PAYE, rent, invoices, and government business-support loans. And that’s not taking into account what has been “borrowed” from our partners’ personal savings. In this lockdown alone, which began on 17 August, we have lost more than NZ$260,000 in sales so far. According to the media, New Zealand has lost around 29,000 businesses in the past nine months. We are only one small café, four business partners, and eight staff. We have mortgages and children. Right now, we just hope to open before Christmas.
I’m not criticising how safe we’ve been kept, because we’re really grateful for that. I don’t necessarily think that another government would have done it better. But as for the economic impact… Well, fingers crossed there aren’t as many “closed” signs along the main street this time.