Chris Trotter writes:
How many times during the holiday period have you seen those irritating notices posted on the doors and windows of restaurants and cafes, informing you that a 15 per cent to 20 per cent “surcharge” will be added to your purchases because of the Holidays Act?
I don’t know about you, but whenever I see such a notice, I turn on my heel and go in search of an alternative eatery. According to the vast majority of restaurateurs and cafe owners who don’t impose these surcharges, it’s what most people do.
I’d like to know Chris’ source for the allegation most cafes don’t charge a surcharge on public holidays. To the contrary I think the overwhelming majority do.
Does the surcharge cover the cost of your lost trade? Probably not.
That is a decision best made by individual owners. Some might advertise no surcharge as an advertising plot, others might need the surcharge to make it worthwhile opening.
The intelligent – and economically rational – course of action for any proprietor in the hospitality industry is obvious. The entirely predictable cost of hiring workers to run a business on statutory holidays can be simply factored into its overall cost structure, and recovered during the course of the financial year.
With no disrespect to Chris, but statements like the above are made by people who I swear have never employed people or tried to run a low margin business like hospitality. They think making a profit is just as simple as factor in overall costs and hey presto.
They just have no idea. Business goes up and down. Staff are rostered on as demand is predicted, but often it can be a mismatch. Your cost of supplies goes up. You need to hire and train more staff. Your cashflow is negative due to tax requirements. so need to borrow.
Only in Neverneverland is it as simple as oh just recover your loss later in the year.
The bottom line is that there is no point in opening a cafe on a public holiday if the marginal cost of doing so is greater than the income for that day. And a 50% hike in staff costs can be the difference between making and losing money. Why would you as a cafe owner spend the day working, to lose money?
I own a polling company. We do not poll on public holidays unless the client will pay the cost of the extra wages. Otherwise I will lose money on the polling done that day, and if I was a cafe owner instead of a pollster, I don’t need Chris Trotter telling me I should just have made more money earlier in the year. It does not work like that.
Now people are quite free to refuse to dine at a cafe with a surcharge on a public holiday – good on them. But you have no right to expect them not to impose a surcharge, if that is the only way they will make a profit from opening that day.Tags: Chris Trotter, public holidays