The Easter holiday period may be a time when people want to go out and enjoy a coffee or meal, but hospitality businesses say they are struggling to make a profit due to a range of rising costs.
A new report from Hospitality Magazine has revealed that 73% of restaurants and cafés are considering staying closed over the Easter holiday period, with the overwhelming majority of these respondents (90%) saying they have definite plans to stay closed.
The report says that public holiday penalty rates are the biggest reason for these closures and notes that the next most common reason – an expectation of fewer customers – was a much more minor consideration.
“A total of 55.98 per cent of respondents cite exorbitant public holiday penalty rates as the key barrier – so much so that operating over Easter would in fact prove unprofitable,” the report says.
“In addition, 10.42 per cent of respondents will not open their doors over the period as they expect many people to holiday over the long weekend, meaning business will be quiet.”
This issue is not new: over the past few years there have been many news reports of restaurants and cafés struggling to justify opening on public holidays.
Back in 2011, for example, the Courier Mail newspaper reported that up to one fifth of all Queensland restaurants would be shut over Easter due to surcharge laws and increased award rates for staff.
Similarly, a Fairfax report in 2013 found that small businesses were particularly likely to struggle with costs and profits at this time of year, with many wanting to stay open but unable to justify the double-time-and-a-half wages they had to pay employees.
Small business owner and board member of the NSW Business Chamber Ellie Brown told Fairfax that the situation is unlikely to change until the government addresses shortcomings in its Fair Work policy. She explains that casual rates are as high as $45 per hour for staff, making the bill for wages “beyond the capability of many businesses”.
“There is no fairness in all of this – not for the public who are looking for somewhere to have a coffee or meal, the people who lose shifts, or for business owners.”
Wage Woes
The debate around penalty rates has been going on in the hospitality (and retail) industry for years, with industry bodies like Restaurant & Catering Australia, as well as conservative economists and politicians calling for changes to wages.
In fact, Restaurant & Catering Australia (R&CA) recently said that the high penalty rates were forcing many restaurants and cafés to close on normal Sundays, let alone public holidays.
“Approximately one third of restaurants are now closed on Sundays, due to prohibitive labour costs,” the organisation’s CEO, John Hart says in a media statement calling on the government to make changes to penalty rates.
“This does not send a message to investors, consumers or visitors that Australia is open for business.”
R&CA says that penalty rates are also leading to significant job losses and inconveniences for both regular customers and tourists.
The Other Side of the Table: How Closed Cafés Affect Consumers
While it is important to understand the pressures faced by businesses, on the other side of the table sit all of the consumers making plans for the Easter long weekend.
It would be annoying, to say the least, if someone was planning on brunch at their favourite café, only to find it closed up for the public holiday. What’s more is that the large number of restaurants and cafés planning to stay closed could drive more and more people towards whatever places are open, which means getting a table elsewhere could be hard and waiting times long.
But there are a few options eager diners can consider to avoid an Easter Egg-style hunt for open cafés. For starters, most businesses will outline holiday trading hours in advance, or be happy to answer questions potential customers may have. Booking to secure and table and a time for dining or drinking is also a good option.
For people who prefer to play it by ear, on the other hand, perhaps the adventure of trying to find an open place will be part of the fun. If not, the consolation could be saved money from not dining out.
Staying in or having a picnic and cooking up meals and treats can be just as social and, as kitchen icon Betty Crocker says, that can save a lot of money without a lot of work.
The post Cracking Up: Cafés Closing Over Easter To Cut Costs appeared first on Quid.