“We have 45 staff. Approximately 30 are casual. I hope I’m wrong, however I predict most of our casual staff will be out of work in the next one to two months.”
“Apocalypse Now”: A Special Feature on How Coronavirus is Affecting Restaurants Around the Country
Broadsheet surveyed 360 restaurant, cafe and bar owners around Australia about the coronavirus and the impact it’s having on their businesses. Their responses paint a dark picture for the immediate future of hospitality in this country. But there are also moments of light.
Published on 17 March 2020
by
“The reality we’re facing is that this could be the end of our business.”
“I don’t know what to do.”
On Friday March 13, Broadsheet sent out a 10-question survey, “How Has the Coronavirus Impacted Your Business?”, to several thousand owners of restaurants, cafes and bars around the country. We wanted to understand the pressure they’re under and how they’re dealing with it. These were just three of the 363 responses we received, and they foretell a bleak future.
The survey went to fine diners, wine bars and cocktail bars in capital cities, but it also arrived in the inboxes of country bakeries, classic pubs, coastal cafes, suburban burger joints, falafel shops, neighbourhood bars, sushi-train restaurants and everywhere else Broadsheet readers like to eat and drink.
The questionnaire was anonymous, so business owners could answer frankly. About 50 per cent of respondents were located in Victoria, and 25 per cent in New South Wales. The remaining quarter was spread across South Australia, Western Australia and Queensland.
Chinese restaurants have been dealing with poor trade for at least a month now and panic-buyers have been loading up at supermarkets for about half as long. But last Friday felt like a disquieting turning point in all this.
That’s when The Grand Prix was cancelled in Melbourne and Download Festival was called off in Sydney. A few hours later, the government advised against non-essential gatherings of 500 people or more, triggering a cascade of major event cancellations and institutional shut downs that’s still ongoing.
As a country, Friday was perhaps the first day we fully grasped the severity of the situation. We suddenly understood, deep in our guts, that Covid-19 would alter all our lives dramatically, not just the lives of an unfortunate few. And for years, rather than mere weeks or months.
At Broadsheet our minds snapped to the restaurants, cafes and bars we’ve spent the past decade eating and drinking at, photographing and writing about. How would they survive such a monumental blow? We had to know.
Total number of survey respondents:
Percentage who say their business has been affected in some way by coronavirus:
We asked seven multiple choice questions and three open-ended questions – 10 in total. We present the most insightful responses here, grouped into themes and lightly edited for grammar and clarity. Each paragraph was written by a different business owner.
REVENUE
Estimated drop in covers in March:
Estimated drop in gross revenue (i.e. earnings before rent, wages, food costs and tax) in March:
“Business is actually up. I’d estimate 20 per cent, and out of the seasonal pattern. My theory is that people are favouring smaller venues near their homes where they know and trust the staff and owners.”
“Currently we’re busier than ever, possibly because we’re a bakery and we’re getting into hot cross bun season. If we have to close but aren’t given any money to help with staff costs, we will be in trouble. I think we should close now for a few weeks, but I can’t afford to until it’s mandatory.”
“We have not seen massive impact yet, but we believe it’s only a matter of time.”
“We’re in the country and just got over the impact of fires, so business has picked up on what it has been, but I expect that the impact will hit soon.”
“I think this survey may be a week too early.”
“We really rely on our regulars, most of whom work in offices around us. If these offices are shut down with ‘work from home’ orders, we essentially lose out entire clientele.”
“I thought we were holding on okay. Business was down a little, but the minute they closed our borders, things changed dramatically. It’s almost like people realised, ‘This is bad’. The phone didn’t stop ringing with cancellations. Sunday March 15, business dropped by 50 per cent with that announcement.”
“We’re expecting a revenue loss of 40 per cent to 80 per cent, which will put us out of business.”
“The level of anxiety and stress is overwhelming for staff, business owners and customers. We had up to 100 cancellations a day last week, including cancellations of big events (we lost hundreds of thousands of dollars of revenue) ... and we aren’t even ‘in it’ yet. It’s terrifying.”
“We have a heavy reliance on functions and large group bookings. So far, we’ve had 100 per cent cancel for the remainder of March. The cancellation on events, functions and group bookings means it’s difficult to give casual staff enough hours to survive, and salaried staff are concerned for their job welfare. Our events managers are worried about redundancies.”
“We went from 80 bookings to 0 bookings across one week.”
“It’s not a good time to be in hospo.”
“Apocalypse Now.”
THE VIRUS
“It’s just flu.”
“Take it easy, we get viral flu every damn year.”
“It’s probably going to end soon. They will release a cure and it will be forgotten.”
“We need to act now and shut. We are in a frontline of exposure. The sooner we close, the earlier we might be able to re-open again.”
“It’s frightening but you need to react and figure ways to make money. I’ve found the public are extremely thoughtful and caring.”
“We are as concerned about the impact on public health as anyone, but as business owners it’s really worrying to know that employees will be impacted by a possible forced closure. We know it’s the right thing to do, but are fearful of the outcome, both for the long-term survival of the business and the immediate financial impact on our workers.”
Editor’s note: epidemiologists and other medical experts agree that Covid-19 is far more dangerous than the flu and “flattening the curve” (i.e. reducing the growth rate of new infections by enforcing quarantine and social isolation) is the best course of action at the current time.
GOVERNMENT
“More decisive decisions need to be made.”
“As a very small business, the government initiatives to date won’t help much. They need to consider cutting payroll tax, leave entitlements etc. I don’t think many small businesses are in a position to inject money into the economy right now, no matter what the incentive is.”
“Rent is going to be the killer to business and the government needs to address this as landlords don’t seem to care about sharing the burden – an immediate 25 per cent rent reduction on all small business would seem sustainable, or an immediate market review available outside of lease terms.”
“The government’s package is not even close to keeping our business afloat. This crisis needs a lot more.”
“Government has not done enough in stimulus packages to help industries that run on low margins and are cash poor. Landlords have also been pretending it’s not happening. The reality is, small hospitality is on the brink of collapse with many believing they will not make a month at the current rate of trade.”
“There has been zero communication from the health department, the ATO or our local government. Any measures we take are done so with no guidance or oversight and the incentives brought in in terms of payroll tax reduction and increased asset write-off are simply laughable and in no way useful for small business … What we need is actual mandated instruction from the health department, rent relief, actual support for casual workers and a cashflow injection in the event of mandated closures.”
“No government support or direction for hospitality businesses. Insurers are indicating no compensation for loss of trade due to Covid-19. Advice is that people should work from home – not an option for restaurant operations.”
“My local council's health department were able to tell me not to open [on day one] before filling all the tiny gaps between the floorboards in my hallway, but not a peep regarding how to manage this … Ultimately, we need the authorities to take responsibility so that the individual operators don’t shoulder the burden.”
“The government needs to step in to support small hospo business. One thing that would make a huge difference is lowering business tax, or lowering award rates to make it more affordable for businesses to stay open. The wage bill is our highest bill by far. If we can make that more affordable, then we can keep everyone employed. At this point it’s more in our interest financially to close, but we don’t want to do that to our staff.”
“Hospitality is an industry that seems to always be neglected when it comes to government action and has a significant impact on a very diverse range of people. This needs to be addressed, as the domino effect in the hospitality industry will only lead to a significant decline in other industries.”
“It’s only a matter of time before restaurants and bars will be forced to close by the government. I fear our cash flow will only last so long if that happens. But I fully support the government in doing this and doing it early, as more catastrophic things will happen if left too late. Just look at Italy at the moment. We don’t want to end up like that.”
THE FUTURE
How long owners estimate their business can keep trading if nothing changes:
Average number of people employed by respondents:
“It’s too early to see what the effects might be.”
“I don’t know what to do.”
“This is the most significant thing we have ever had to plan for and, to be honest, we still don’t know what we’re planning for.”
“We’re improving service and making sure we’re the best of the bunch. The cream will always rise to the top.”
“We’ve looked into delivery partners, which was previously not a service we wanted to provide.”
“We would like to call on UberEats and Deliveroo to reduce their commission during this period to help restaurants and cafes stay afloat.”
“This is the most challenging thing we have had to face as a business since starting out, and it seems only the most resilient businesses will survive if there’s a prolonged impact.”
“People still gotta eat.”
“Uncertainty is the worst thing.”
“The uncertainty of the situation and the future actions or timetable make it super hard to prepare, deal with issues or modify the business accordingly.”
“People need to understand that once a small business falls, it’s gone forever. I understand the fear, but keep perspective.”
“Without assistance (either council waiving rates or offering assistance, landlords waiving or reducing rent for a period, which may then have a knock-on effect to banks) then I’m not sure we will survive with no customers. Suppliers still need to be paid and this is becoming increasingly hard with no revenue.”
“There’s no solution to this, unless everyone helps. Government, landlords, suppliers, banks, employees, employers and customers. Everyone has to do something to keep business and jobs.”
“Our biggest concern is having to close for a period in which we will still need to pay overheads and salaried staff. We can’t survive for more than maybe a month if this happens. Even if it’s one week, we will have trouble paying tax due.”
“It is uncertain what the future holds, particularly if government sanctions around forced closures come in to play. The impact of this would potentially be catastrophic to the industry as a whole, and the current proposed stimulus package barely touches the edges of it.”
“We have 45 staff. Approximately 30 are casual. I hope I’m wrong, however I predict most of our casual staff will be out of work in the next one to two months.”
“We are ready to take a financial hit, and know that it is inevitable.”
“Time for the government to help. We pay our taxes every year without complaint. Time to reduce taxes for six months.”
“There is no way we can afford to close for weeks or anything similar, this will sink our business. Our strongest summer quarter was down 25 per cent due to the bushfires.”
“We’ve been hit with many obstacles in the last few months. This might be the straw that breaks the camel’s back.”
“I feel the worst is yet to come, so if this initial stage of the outbreak has caused this massive downturn in customers spending, small business have no chance of future survival.”
“We have expensive and comprehensive business interruption insurance that has been refused by our insurance company. It’s devastating to know that our staff and rent will not be covered if we’re forced to close.”
“I believe this will force an irreversible change of the industry and society.”
“Everyone needs to work together to keep places open, as when it passes the economy needs to resume. Landlords with rent, equipment finance, loans, BAS payments. No one gets paid from bankruptcy.”
“Very soul-destroying. This may mean the end of our business after seven hard years.”
“Our industry was already suffering severely. Even though I’m a ‘busy’ place it has been hell to run for at least two years, with the wage theft, economy downturn, fires and roadworks in our area closing down trade. This is another thing to make small business so tough and not worth it!”
“Fingers bloody crossed.”
“We need support from the public to continue patronising our business.”
“We will pay out leave owing if forced to close, but won’t be able to sustain payments to staff beyond that, which is a real concern.”
“The burden needs to be shared amongst business owners, landlords, council, government. Rents should be reduced or stopped for a short period, councils should not collect fees and rates, payroll tax and other taxes must be frozen or reduced. This way more businesses will be saved, more jobs saved, and the economic burden from this virus can be distributed more evenly. If landlords insist on full rent and banks on mortgage payments, there will be many not surviving.”
“The reality we’re facing is that this could be the end of our business.”
“I strongly believe due to the fact that this is global, it’s an equalising scenario as we’re all affected. I think it’s important that we support each other. Every cloud has a silver lining. I’m not sure what it is yet, but perhaps it’s that we reset the way we think of the world and each other.”
“God help us all.”
