David Parnham
5th May 2020
In April 2020 Café Owners & Barista’s Association Of Australia (COBAA) conducted a very detailed online study survey of the Australian cafe owners to best understand the impact on their valued businesses and the new trends from this “once in 100 year pandemic” COVID-19 Global threat.
We truly thank the 500+ cafe locations that contributed to this important Café Industry Wide survey. You should all now have received your FREE Impact report via email. The report details the economic and financial impacts of the restricted trade in the cafe operations between the period of early March to the 26th April 2020.
From these collective findings it is clear that up to 24% of all cafe’s surveyed (one in every four cafes) closed immediately when the New Trading Restrictions started, due to many reasons, however the major reason was the first two week period of uncertainty when the Government announced the first stimulus offer of JobSeeker and JobKeeper employee benefit packages. During this two week period many of you simply closed and retrenched all your cafe team, while facing the unknown and wondering what was to lay ahead with the “Takeaway Only” new rules for cafes during this pandemic. It is also true that a small number of cafe’s reopened after the Government stimulus announcement mid-March 2020.
For those cafe owners who stuck it out during this initial two weeks things were very different to the normal in so many ways.
Cafe businesses had to immediately review their own business strengths and think completely differently. This chart from the recent study shows the many new ways that cafe owners developed and/or enhanced their business during the early stages of the COVID-19 Restrictions.
From the above Chart, it’s been true to say that now there are two types of cafe owners in business right now. Those who say “you can’t make it work” in this COVID-19 trading restriction environment, and those who say otherwise. Whatever perspective you take, you’ll prove yourself right. We have heard the ‘talkers’ a lot over the last few weeks- “People aren’t buying takeaway right now.”
However, over recent weeks we have all seen the ‘doers’ take action and create a new normal until the Government COVID-19 Restrictions are lifted.
The cafe owner doers took action early to survive and to dramatically change their pre-COVID-19 menu offer and operational trading environment for their remaining staff. Many of you reduced head counts to the bare minimum while others maintained their staff by flexible working hours with a mix of JobKeeper payments.
The overall effect of the cafe business turnover is shown below and since this study we can only assume that trading has become even more difficult for many cafe’s based on social distancing and the reduced income of most Australian’s over the many weeks of COVID-19, with job losses and work from home Isolation controls in place from the Government to flatten the curve. As at today, 5th May 2020 the Australian people have been very tolerant and mostly have adhered to all the COVID-19 Restrictions including cafe operations. However, how many of us truly know the financial cost of this on our cafe businesses? The next steps we need to take until the restrictions are lifted by state or territory and thus what will be the NEW CAFE normal?
What is true is the differences of cafe location and style can be based on the success or otherwise on the actual cafe trade turnover during the pandemic.
It is true to say the CBD cafes’ takeaway sales were as high as +50% of their daily weekday takings before COVID-19 ‘takeaway only’ restrictions were in place from early March 2020. However, with the Government push for office workers to work from home and the tourist trade decimated with both International and domestic travel restrictions in place, these CBD cafes have been hit the hardest in their day to day operations. On the flip side we are hearing that local community support for cafe’s in rural or outer suburban areas are not as affected as their inner city colleagues.
It makes sense that coffee loving people are more likely to rely on takeaway only support of their cafe local “favourites” in these rural areas and outer suburb locations because most are in self isolation and/or working from home. Their loyalty to the local cafes has been well respected by many of the cafe owners and their valued staff at this important business survival time.
For many of you cafe owners, the question of whether you will stay open after the COVID-19 Restrictions ease or when the Government stimulus packages cease will indicate the true cafe industry impact.
However, in the recent study the cafe industry uncertainty is high at up to 20% during April 2020 – therefore as time passes it is safe to say aloud that this uncertain or unknown ratio of one to five cafe’s will increase as more financial pressures of rents, reduced trade, staffing and cost of goods all play out for each and every cafe business.
For more details on the COBAA Impact Study and express use of this article please contact.
David C Parnham
Café Owners & Barista’s Association Of Australia (COBAA)
P. 02 9380 5559 M. 0423 200 206 E. enquiries@cobaa.com.au
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