Auckland restaurants continue to collapse under the pressure of Covid-19

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Jan 19, 2022 1:15 am3 minutes to read

Misters Real Food went into liquidation this month after telling customers in November it was closing due to “continued difficulties as a result of Covid”. Photo / NZME

More Auckland restaurants have joined the growing list of closures as Covid-19 continues to hit the hospitality industry hard.

Elijah Blue, a waterfront restaurant near Hobsonville Marina, was liquidated on December 21, according to documents filed with the New Zealand Companies Office.

The bankruptcy of the restaurant and bar, which only started in September 2020, was due to “the impact of Covid-19 on the hospitality industry” and problems with the lease that left the business underutilized, according to the insolvency practitioner’s first report Grant Reynolds indicated.

Elijah Blue is one of several restaurants in Auckland to have closed their doors in recent months after the city spent all of spring in lockdown.

The sustainable and organic café Misters Real Food in the city center was also closed this month.

In an online update to customers in November, Misters Real Food said it had closed due to “continued difficulties as a result of Covid”.

The first report from bankruptcy trustee Kelera Nayacakalou, dated yesterday, said the company blamed its failure on Covid-19 and road works in the city, which resulted in less foot traffic.

The collapse of more cafes follows two leading Auckland seafront restaurants, Euro and Saxon + Parole, to close their doors due to pressure from Covid-19.

Euro was home to famous chefs like Simon Gault and was legendary for its long lunches.

Described as “a modern steakhouse made in New York”, Saxon + Parole opened in the Commercial Bay retail hub at the start of the Covid-19 pandemic in 2020.

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Celebrity Auckland restaurateur Leo Molloy, who owns the viaduct’s headquarters, warned after the euro’s closure: “This is just the tip of the iceberg. Wait till you see the iceberg!”

The Restaurant Association said it was devastated that the industry was left out of the government’s reactivation package for Auckland, which will pump $37.5 million into Auckland’s economy through 100,000 discount vouchers that residents can use on certain activities target.

The economic impact of the pandemic has also hit restaurants and cafes in other New Zealand cities hard, forcing popular establishments like Espressoholic in Wellington to close last year.

In Northland, the only regions still on the government’s red light setting, restaurants and cafes are feeling the pinch with fewer than normal domestic tourists this summer.

The Duke of Marlborough, a popular hotel, restaurant and wedding venue in Russell, has been hit hard, co-owner Riki Kinnaird told Radio NZ this week.

“With the red light restrictions and the noise around the roadblocks, we’re probably down 30 to 35 percent in trade,” Kinnaird said, adding that 10 booked weddings had also been cancelled.

“It’s day to day which means it’s really hard to plan and the anxiety levels are high. In fact, some people will go broke during that time.”

Satish Ranchhod, senior economist at Westpac, wrote today that spending on hospitality has “risen significantly” but the industry is still “contaminated by difficult demand conditions”.

Hospitality sales were still down about 7 percent compared to the same period last year, he explained, as spending in the sector continues to be dampened by Covid-related restrictions on trading activities.

Ranchhod added that uncertainty about new Covid variants continues to be a significant headwind for many customer-facing businesses such as bars, restaurants and entertainment venues.