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Auckland’s CBD retail scene has been struggling for years. The City Rail Link construction works, Covid, and the fall-out with people working from home, crime and safety issues, have contributed to businesses shutting up shop.

Work on a new CBD project for a bus corridor promises improvements to public transport down the line, but in the meantime, it comes with disruption for businesses.

A fresh set of road cones and fencing in the Auckland CBD has left a popular cafe facing a bleak future.

“We have no reserves left and we are now at a point of sinking rather than treading water,” says Richard O’Hanlon, who has run Remedy Cafe on Wellesley St for almost 14 years.

Since the first cones went out in early April to turn part of Wellesley St West into a dedicated busway, O’Hanlon said takings are down 40% and two staff have been laid off to spread what little money is coming in.

The cafe owner supports the CBD upgrades but after seeing how badly Albert St fared over work on the City Rail Link(CRL) and watching the “snail pace” of work on nearby Victoria St “I genuinely only see a bleak future ahead”.

Richard O'Hanlon says takings are down 40% due to the road works on Wellesley St West. Photo / Jason Oxenham

“The impact these works are having on business in the area is worse than during the Covid outbreak,’ said O’Hanlon.

The Wellesley St bus improvement project will create a dedicated east-west bus corridor between Albert and Queen Sts with wider footpaths, four new bus shelters, improved pedestrian crossings, and remove buses from Victoria St to become a tree-lined street for pedestrians and one lane in each direction for traffic.

Work began on Wellesley St in mid-April and is due to be completed by late 2025. The two street upgrades are part of a series of projects in Midtown to prepare the area for future growth in public transport when the City Rail Link opens in about two years.

Auckland Council and Auckland Transport acknowledge the construction works, which are part of the City Centre Masterplan, will have a significant impact on businesses.

“We understand this must be a very stressful time for a small business and we appreciate the concerns of our business community,” they said in a joint statement.

The public bodies said they are working with impacted businesses to ensure the area feels safe, clean, and welcoming throughout construction. They have a programme to address cleanliness, security and anti-social behaviour, and have clear signage for people to find their way around.

“We also work with businesses to enlive and promote the area through events and activations.”

O’Hanlon said local businesses need help to survive the works on Wellesley St, suggesting rates relief as one solution.

Artist impression of Wellesley St West after the bus improvement project is completed. Source / Auckland Council

“If we are not helped we simply will not survive long enough to see the completion of the project that Auckland Council and AT so eloquently suggests will be great for businesses in the area.

“While the city needs upgrading in many areas, surely it should not be at the expense of those businesses that are left in a dying city centre,” he said.

The council does not offer rates relief to businesses for disruption from construction works for fear of setting a precedent, but last year set up microgrants of up to $3000 a year to support businesses to be more resilient to disruption.

Remedy Coffee received a grant this year ‘to purchase new signage to enhance their visibility to passersby’ and is eligible to apply for further grants in 2025 and 2026, the council said.

O’Hanlon described the grant as a “bit of a slap in the face”, saying it only covered a day’s income before the work started.

It’s been a tough year for retailers in Auckland’s CBD.

In May, Smith & Caughey announced it would close its department store in early 2025 after 144 years in business.

Chairman Tony Caughey cited the economic downturn and a big drop in consumer confidence; the rise of shopping malls; upmarket brands building their own retail stores: Auckland CBD traffic, crime and safety issues; and a drop in pedestrians, with many people working from home as reasons for closing.

Chairman of Smith and Caughey's, Tony Caughey in their flagship Queen St store in Auckland.

Last week, French beauty retailer Sephora announced it was closing its flagship store on Queen St next month. It is keeping its other two stores in Newmarket and Sylvia Park.

The Herald reported in 2019 that Sephora spent more than $5 million for the interior fit-out of the Queen St store, which opened to much fanfare, including a dance number from the retailer’s Auckland employees, confetti showers and a live DJ.

Auckland retail has been dealt another blow with two popular brands announcing this week they are shutting up shop.

Sportscraft had its closing-down sale over the weekend with the clothing brand exiting from its two New Zealand stores in Newmarket and St Lukes Westfield malls.

Area 51 has told its customers that it is closing its Newmarket store after 20 years.

Bernard Orsman is an award-winning reporter who has been covering Auckland’s local politics and transport since 1998. Before that, he worked in the parliamentary press gallery for six years.