14 May 2020

Level 2: Majority of Canterbury businesses still on tenterhooks despite reopening

9:37 am on 14 May 2020

Two-thirds of Canterbury businesses feel their future remains on a knife-edge, in a sobering new survey gauging the effects of Covid-19 restrictions.

3 January 2019: Christchurch, New Zealand - New Regent Street in the centre of Christchurch, with outdoor cafes and speciality shops, and the tram route running through it.

New Regent Street in the centre of Christchurch. Photo: 123RF

But it is hoped a new campaign could save hundreds of jobs, by asking residents to act like tourists in their own neighbourhoods.

Closing her decade-old Chinese restaurant and opening the new Little Spicy on Christchurch's Riccarton Road is a decision Wen Wei wishes she had never made.

She transferred five existing staff to the new address at the end of February, which immediately had to adapt for takeaway orders, and said keeping them employed was a priority because they were "like family".

"Everyone's been with us for a long time. We've been through [the] earthquakes 10 years ago, but we pulled through. But this one's different - everyone's scared," she said.

"I don't know how long we'll last, but we'll stick together."

Wei was among 63 percent of Canterbury business owners who said they were enduring significant financial impacts from level 3 restrictions, according to a survey by the Canterbury Employers' Chamber of Commerce at the start of May.

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The 470 responses from businesses across a variety of sectors showed an improvement on the 81 percent who reported significant financial impacts at level 4.

But the chamber's chief executive, Leeann Watson, said there was still a long way to go before confidence bounces back.

"Cash flow is certainly one of the biggest challenges for businesses and in particular, small businesses, followed pretty closely by the additional requirements for them to operate ... they absolutely support having to do so, but it does incur additional costs for them," she said.

Watson said small businesses had been more impacted by a lack of customers, while large ones had suffered from supply chain issues.

Sixty percent said they expected "profound" cash flow problems over the next three months.

Templeton massage therapist Tanya Taylor was grateful for the wage subsidy and relieved to reopen her business Motion Pure Body Fitness today - but it was somewhat overshadowed by a potential long-term reduction in customer numbers.

"Some of my work is corporate work, which I can't do at the moment. Some companies aren't returning to their offices until level 1 and they'll have to look at their health and safety procedures, where they're allowed onsite massages on their worksites. So already I know I've lost 40 percent of the work," she said.

In two months, the Canterbury Employers' Chamber of Commerce said it had offered support and advice to more than 2000 struggling businesses through its helpline and a further 6000 via webinars.

The advice they are dishing out is now focused on redundancies, restructuring, and resizing, while the economic development agency ChristchurchNZ is taking a different approach - hoping to drum up demand from consumers.

In a campaign launching today, its chief executive Joanna Norris said Canterbury residents were being asked to act like tourists in their own region.

"We know that around 50 percent of GDP derives from consumption. So what that means is every single person can make a difference," she said.

Norris said there would be a lot of people without any extra money, because of the impacts of Covid-19, but those who did have spare change should spend it locally.

"Modelling by our economists has found if every household spends just a little bit extra in the local economy, that will literally save hundreds of jobs over the next year," she said.

"If you're in Christchurch - jump on the tram, see your city in a different way. Purchase from our local cafe. Go and do something new, that you haven't done before."

Leeann Watson said central government help would also be crucial.

She hoped today's budget announcement would include extended wage subsidies for the hardest hit sectors, and more accessible, robust mental health support.

Watson said level 2 would reveal the gap between businesses being able to reopen, and being able to operate at full capacity.

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