Level 2 urgent but no panacea for many businesses

Early figures show that Auckland city centre sales doubled in the first week of Level 3 but still account for only a small percentage of a standard trading week, which at this time of year would typically see spending of about $27m.

Heart of the City Chief Executive Viv Beck says “We’re told that 75% of the economy is functioning again, but this is not the reality of what we are seeing at the tills.  Whilst lockdown sales in the city centre doubled in the first week of Level 3 after a 90% reduction in spending during level 4, a significantly reduced level of spending highlights the urgency of moving to level 2 to generate much-needed revenue for businesses.  Each day of uncertainty is causing more anxiety and announcements this week are critical.”

“However, Level 2 will not be a panacea for many businesses, particularly those in the retail, tourism, hospitality, accommodation, entertainment and creative sectors.  The sudden loss of international tourism, students and events, coupled with people working from home will have an ongoing impact.  A report* commissioned by Heart of the City and released last week showed that Auckland’s city centre could lose more than 12,000 jobs and $3B of GDP by March 2021.”

“Level 2 still has significant trading restrictions for many sectors and there will be fewer people around to support impacted businesses.  This will have a significant effect on the success and vitality of the city centre.”

“More needs to be done to support impacted sectors, as the true impact of COVID-19 is yet to come.  Finding creative and sustainable ways to support businesses is paramount, including urgent and direct financial support with cashflow for those who desperately need it,” says Ms Beck.

-Ends-

* Heart of the City commissioned report “Post-Covid-19 Auckland City-Centre Economic Impact Scenarios”, StrategEase Ltd, May 2020, available here and associated media release here.