Small businesses in the hospitality sector will struggle to claw their way out of pandemic paralysis without the assistance of third parties, with some entrepreneurs in this sector not expecting to survive beyond six months, a new survey released by Harris Coffee finds.
It also finds that two-thirds of the small business owners in hospitality share concerns that young people will be afraid to work in cafes given the recent upheaval that has resulted as a resulted from the coronavirus outbreak.
Coffee manufacturer Harris Coffee commissioned the You Gov Galaxy polling company to do the survey, which forms the basis for the Harris Café Report. There were 204 respondents to the survey from small businesses. A second survey looked at the attitudes of 1056 consumers to cafes and coffee shops.
The results for the small business component of the report show that 80 per cent of respondents believe that they will be unable to recover from the pandemic-enforced shutdown without third party support, according to David Ansell, the head of Harris Coffee.
Ansell said that six months is the longest timeframe 43 per cent of small business respondents expect to survive without third party assistance.
That dire prediction from small businesses surveyed is no surprise to Peter Strong, the chief executive officer of the Council of Small Business of Australia.
Strong says the ability of small businesses to reanimate after lockdown will depend on their sector and that the real test will be when financial support such as Job Keeper, the deferrals of repayment of loans to banks and the relief from certain Corporations Act obligations for directors disappear.
He predicts Australia will see between 150,000 to 200,000 businesses cease trading when safety nets are removed.
The Harris Café Report found that 89 per cent of the businesses that responded had experienced a significant haemorrhaging of revenue due to bushfires and the coronavirus pandemic.
More than half of that number told the pollsters that revenues had been reduced by at least 50 per cent over the past year.
Another issue that is concerning business owners in the hospitality sector is the prospect that employees will not return to the cafes and coffee shops when things begin to reopen.
Two thirds of small business respondents fear that young people will have been spooked by the shutdown and will not go back to work in hospitality.
The survey also points to nine in ten café owners worrying that the decline in visitors to regional areas will impact their businesses on an ongoing basis even when domestic tourism begins to take hold again.
But cafes and similar venues could rebuild custom quickly if the responses from consumers surveyed are any indication.
An overwhelming majority (70 per cent) of those surveyed viewed their coffee shops and cafes as important hubs of activity in the community.
There were 71 per cent of consumers responding to the survey telling the pollsters that they would spend more at their local café post lockdown to ensure that the businesses can remain open.