The upcoming rolling closures of the Auckland rail network was the final straw for the owner of five transport hub coffee shops after years of pandemic struggles
Espresso Kiosk, trading as Coffee Station, appointed liquidators last week after years of dealing with the impact remote working and network disruption had on the number of commuters it was serving.
Coffee Station opened its first location at Papakura Train Station in 2016 before opening locations in Newmarket, New Lynn and Panmure stations as well as the Smales Farm Busway Station in Takapuna.
The business had a licence to occupy with Auckland Transport, a relationship liquidator Bryan Williams described as “somewhat symbiotic”.
“On the one hand, Auckland Transport is eager to facilitate utility benefits to its commuters to improve usage, while on the other, Coffee Station is keen to provide a service to captive customers driven to its doors by a concurrent, but unrelated demand,” said Williams.
The first liquidators' report pointed to a downturn in commuting traffic, and the corresponding demand for Coffee Station products, through the pandemic as the start of the trouble.
Williams said once lockdowns came to an end, the mask mandate was a practical impediment to the consumption of food and hot drinks for public transport, alongside the widespread adoption of working from home.
“The propensity to operate remotely from home has dampened the demand for commuting services, and correspondingly, the demand for the offerings of the company.”
Network disruption
On top of everything else, the liquidator pointed to disruption to the delivery of Auckland Transport services, resulting from widespread damage identified in 2020, as having reduced the dependability of commuters and arguably causing them to opt against taking public transport.
Last month Auckland Transport and KiwiRail announced a $330m rebuild project that would see widespread closures lasting until 2025.
The Southern Line and the entire Onehunga line will be closed between Newmarket and Ōtāhuhu from late December 2022 to March 2023, while the Eastern Line between Britomart and Ōtāhuhu will be closed between March 2023 and December 2023.
Sections of the Western Line will likely be closed in 2024 and 2025.
The company’s owner and director Martin Howard had been providing money to fund the business’ losses until the rebuild was announced, when advice on the sustainability of the business model led to him stopping contributions.
Subject to consent from Auckland Transport, Williams will put the business up for sale.
Preferential claims from employees and Inland Revenue totalled around $28,000, while estimated claims from unsecured creditors including suppliers and Auckland Transport hit just above $680,000.
