Wellington’s retail sector could experience “permanent damage” from the ongoing anti-mandate protests with Retail NZ fearing a vast amount of businesses could close for good.
Some businesses near Parliament have been unable to operate in recent days due to the anti-Covid-19 vaccine mandate protests.
It comes as the protests entered its 10th day, with reports of protesters threatening people living and working nearby, while hundreds of protesters' vehicles continue to clog streets near in the area.
“The disruption generally caused by the Red traffic light setting is bad enough but for businesses in central Wellington, the protests are really keeping customers away,” Retail New Zealand chief executive Greg Harford told Breakfast.
Businesses near Parliament have been forced to shut their doors over the past seven to 10 days as sales continue to plunge due to the disruptions.
“Customers just aren’t there. We’ve got public servants who are staying at home, working from home; you’ve got other customers who are just scared to come into town, worried both about Omicron but also about the protests and the fact there are lots of unvaccinated people wandering around the CBD."
He warned there could be be "permanent damage to Wellington retail and hospitality" should the disruption of the anti-mandate protests and the surge in Omicron cases continue, adding, "It’s just not sustainable for businesses to continue operating in an environment where they haven’t got any customers".
“It’s really difficult to make ends meet and I think you are going to see some businesses just not make it through.”
He said some businesses spoken to by Retail NZ are making around $150 in sales per day “and that’s just not enough money to keep the lights going and pay the staff”.
“Businesses are 90-plus per cent down in terms of sales and foot traffic and it’s really horrific and the sooner we can get some kind of semblance of normality back, the better it’s going to be for everyone.
“People have kind of struggled along, their businesses are battered and bruising but they’ve come through that on the basis of the wage subsidy and the resurgence support payments the Government’s put out there but that support’s not there anymore and I think people really are feeling a little bit of despair about what the future holds.”
He said 59 per cent of Retail NZ members in Wellington “may not survive the next 12 months”, adding that businesses are seeing a “real change in sentiment and a real change in customer behaviour” in recent weeks amid a spike in Omicron cases.
“We’re entering this unknown Omicron phase where it’s likely that there’s going to be widespread disruption for a very long time to come and it’s just not going to be sustainable for a lot of businesses.”
Harford said Retail NZ members across the country are down a “little more than 30 per cent, 32 per cent on average, but it’s far worse than that”.
One-third of retailers are down in sales by more than 40 per cent, while around 12 per cent are down between 60 and 90 per cent, he said.
“Some of those numbers might not sound significant but in retail, the average net margin’s just 3.8 per cent so for every $100 that a customer spends, you’re making $3.80 in profit on average so there’s not actually a lot of fat in it.”
Harford said businesses are “sailing really close to the wind”, with some members having put $150,000 to $200,000 of their own savings and remortgaged their houses to “try and keep their businesses afloat over the last two years".
"The current situation is just really, really difficult for them to keep managing through."
Harford said there needs to be an “end to the disruption [in Wellington] - we need to get the cars off the streets, we need people to be able to feel safe coming back into town”, as well as for the Government to “step in with an additional support package” for businesses under lockdowns.
“We really need Government to come to the party with some additional support to help businesses survive the Omicron outbreak.”