Fears rise of home workers could kill cities’ cafe culture
Office workers’ flat whites are businesses’ bread and butter. By Emily Brookes and Siobhan Downes.
Leah Garcia-Purves opened her cafe, Morsel, in an alley off Auckland’s Queen St in January. By the end of the month she was serving 50 to 60 people a day, there were lines out the door for her cinnamon buns, and the business was running well.
But after a ‘‘dire’’ first week of alert level 2 which saw her serving just two or three customers a day, and with no guarantee if or when things will get better, she made the hard decision to shut up shop for good.
Morsel, which employed a part-timer, had received the Government’s wage subsidy and the landlord had given GarciaPurves a rent credit, but it wasn’t enough to meet her overheads.
Even with alert level 1 now imminent, she’s decided to cut her losses, as she fears her customer base has all but disappeared.
Most of her regulars came from nearby law firms, marketing firms, and recruitment agencies, while Auckland Council was another big source of patrons.
‘‘Everybody’s been like, ‘I’ve been laid off, or my hours have been cut drastically, or we are permanently working from home now’,’’ she said.
‘‘The first week we were open for level 2... they just weren’t there anymore. To me, it wasn’t ‘back to normality’ like everyone said it would be.’’
The potential move to level 1 being considered by Cabinet tomorrow, two weeks earlier than expected, will come as a relief to many inner-city cafes.
But it is too late for some – like Morsel – and others are grappling with the realisation that many of the office workers whose flat whites have been their bread and butter might not return.
Hamilton cafe Machina is opposite Fonterra’s corporate head office, which pre-lockdown, housed 800 workers. Now it’s more like 200, said cafe owner Gurdeep Rana. ‘‘Even if they get back to level 0, they’ll still give people the option to work at home.’’
If workers didn’t return to the CBD, Rana, who also owns Junction Bar on Hamilton’s Commerce St, said he would have to make staff redundant.
‘‘The flavour of the month seems to be we want more people working from home, and that’s coming from the Government all the way down,’’ he said.
‘‘I don’t know if people see the overall impact. If Fonterra or whoever is only working at 50 per cent capacity, that has a major, major impact.’’
Wellington cafe Green Land is a stone’s throw from Parliament. With most public servants working from home, the hole-inthe-wall coffee bar was lucky if it was brewing 100 cups a day during level 2 – down from an average of 600.
Owner Glenn Pitcaithly was welcoming a potential early move to level 1. ‘‘If you can double your turnover two weeks earlier, you can start to crawl out of a hole earlier.’’
Still, he expects a permanent change to his customer base. ‘‘I don’t foresee everyone coming back to work. The work-fromhome thing is going to be locked in for a lot of people. So there will be a shift we’ll have to adapt to.’’
Many cafes have kept afloat to this point thanks to the Government’s wage subsidy scheme, a second round of which will kick in soon.
Pitcaithly said the wage subsidy had been ‘‘absolutely crucial’’ in being able to keep his two full-time staff.
‘‘I would have had to have dropped one straight away. I would have sacrificed anything I would take out of the business to keep the other one,’’ he said.
‘‘I keep my staff for a long, long time – it’s really hard to get good ones. The value of your business is so much in your staff.’’
He planned to apply for the extension, as they were only now approaching 40 per cent of previous trade.
‘‘Even if we get up to 50 or 60 per cent once level 1 hits, that’s still not enough for me to keep them as I need to.’’
Machina owner Rana also said he planned to apply for the wage subsidy extension for his seven staff.
‘‘In hospitality, you need to be back to close to 100 per cent of what you were doing before. Every busy cafe or restaurant usually only makes money three out of four weeks anyway – it’s always borderline.
‘‘We’d have to be back to where we were this time last year in regards to keeping all of our staff without a subsidy.’’
In order to receive the extension, the Government initially said businesses would need to show they had lost at least half of their usual revenue. But on Friday, Finance Minister Grant Robertson said they had reduced the threshold to 40 per cent, which was expected to make an extra 40,000 businesses eligible.
That was good news for cafes like Espresso Workshop in Auckland’s Britomart, which had losses sitting right on the cusp of 50 per cent.
‘‘It looks like now we might just scrape in and be able to apply for that which will be fantastic for keeping the business afloat,’’ owner Andrew Smart said. Smart, who also owns Espresso Workshop in Parnell and the roastery of the same name in Remuera, said he was also lucky to have a ‘‘super supportive’’ landlord who had given the Britomart business rent relief.
He was confident business would pick up in level 1, and was excited to see his customers return.
‘‘We’re seeing the light at the end of the tunnel,’’ Smart said. ‘‘Not everyone will be back ... quite a few people have changed the way they work and have become more flexible in the way they work.
‘‘But if we can experience around a 30 per cent increase once we go to level 1, and then we’re just building on that, then I think we can probably say we’re going to be OK.’’
Where keep cups and loyalty cards are concerned, the CBD’s loss could be the suburbs’ gain. Smart, who supplies coffee to three dozen wholesale clients, said cafes further out from the city had been looking at losses of a more manageable 35 per cent during level 2.
‘‘I think some suburban cafes are probably experiencing visits from customers they haven’t had before,’’ he said. Morsel’s Garcia-Purves agreed.
‘‘All the eateries I know that are out in the suburbs are thriving,’’ she said.
‘‘My local is usually quite quiet, but every Thursday morning I go in and there’s a line outside for breakfast and brunch and people wanting to work there. So I think suburbs are going to be the growth area for hospitality.’’
It’s been an especially rocky few weeks for Garcia-Purves, who will start her next chapter caring for her terminally ill father.
‘‘Going on a caregiver’s benefit and then having to pay the outlay of the business that’s leftover... it’s not a great time.’’
But she eventually plans to go back to university to complete a degree in midwifery. She may also look at offering some kind of takeaway service in the future, as her home delivery cinnamon buns and cookies during alert level 3 had been a success.
Although she said there had been ‘‘lots of little lessons’’ she had learned from her business and things she would have done differently, ultimately nobody could have prepared for a pandemic.
‘‘When you start a business you don’t really make a wage until two years down the track,’’ she said.
‘‘But mine was on track for six months. I was ready to break even and then the whole Covid thing happened and it was a real kick in the guts.’’