Yahoo Finance Sad impact on restaurant forced to close
The cost of living crisis is hitting restaurants hard and staff are suffering as a result.
The Easter long weekend is meant to be a huge four-day bonanza for hospitality venues, as Aussies soak up the extra time off work, but the cost-of-living crisis forced one restaurant owner to shut up shop.
Tim Matthews, owner of The Forge Pizzeria, had to close two of his three establishments from Friday to Monday after realising he wasn’t going to get enough through the till to justify opening. Bars, pubs, clubs, cafes and restaurants have to be able to afford to pay penalty rates to staff for working on public holidays like Easter and that can leave many struggling to make a profit.
But Matthews has revealed the sad impact weekend closures have on his employees.
Has your business been impacted by the cost of living crisis? Email stew.perrie@yahooinc.com
“If you look at some of our staff, they really need those penalty rates as well … they're experiencing the cost-of-living costs, just like the rest of us,” Matthews told Melbourne radio station 3AW.
Only one of his three restaurants was able to open in Ballarat and it saw some patronage over the long weekend.
While some venues are resorting to jacking up their prices to make sure they stay out of the red, Matthews said you could only go so far and, even then, it might not be enough.
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“At the end of the day, we're still probably making a loss when we put [prices] up,” he said. “You can't put them up as much as probably you need to … customers have only got so much money and there's only so much tolerance.
“You feel guilty asking for too much for what will be a normal pint of beer or something like that.
“We're just trying to come up with a balance.”
Public holiday surcharge isn’t the silver bullet to lift profits
Some hospitality venues are forced to put on a public holiday surcharge of up to 20 per cent to claw back some money to give to staff. While 10 to 15 per cent is usually the norm for a surcharge, there’s technically no limit to how much establishments can charge.
It’s also not a guarantee it will fix profits.
“I see some businesses complain that, even at 15 per cent or 10 per cent - which is more average - they lose money,” Fifty Up Club’s Christopher Zinn told radio station 2GB.
“One might say, ‘Why open if you lose money?’ But again, I suppose there is the expectation now from consumers that there is 24/7 service all the time and if you don’t stay open then your business might suffer more broadly.”
The consumer watchdog has warned that while holiday surcharging is legal, customers need to be able to see the surcharge clearly before paying.
"Restaurants and cafés are free to set surcharges, but they must provide consumers with a prominent single total price for goods and services, where they are able to be quantified at that time,” the Australian Competition and Consumer Commission said. “This can be as simple as a separate menu or price column for the surcharge days.
"However, the menu must include the words 'a surcharge of [percentage] applies on [the specified day or days]' and these words must be displayed at least as prominently as the most prominent price on the menu.
“If the menu does not have prices listed, these words must be displayed in a way that is conspicuous and visible to a reader. These measures apply to pricing for both food and beverages."
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