The numbers are ugly. But the people writing the trade off have mostly never had to make payroll on a wet Tuesday.
I have been in this game over twenty years. Chef first, then cafes, now the roastery. I have opened the doors at 5am with a knot in my stomach about the week's takings, and closed a till on a Sunday doing sums that did not add up. So when I read that more than one in ten cafes and restaurants around the country have gone under in the past year, I don't see a statistic. I see people I know.
Now, everyone loves to blame rent. Ten years ago they were right. Rent was the thing that broke you. Not anymore. Rent is just one line on a page that has got longer and uglier in every direction.
Cost of goods is the quiet killer. Everything you buy to run a cafe costs more than it did, milk, beans, packaging, the lot, and it climbs again the month after. Then there is tax on everything. Payroll tax is the one that makes owners laugh and then cry: you grow, you hire, you do the right thing, and you get taxed for the privilege of employing people. Power went from uncomfortable to absurd. Wages went up, as they should, but the menu price could not chase it, because the customer is counting every dollar too.
So this is not really a rent story. It is a margin story. It is volume, profit, bottom line. It is the part nobody photographs: the owner who quietly put themselves back on the coffee machine, working the bar for free, because cutting their own wage was the only line left to cut. I have done it. Plenty of you reading this are doing it right now.
And here is the part that gets under my skin. Every time the trade has a hard year, out come the experts. Cut your menu to six items. Charge eighteen dollars for toast. Just work harder. Mate, the people still standing are working harder than you could imagine. The ones who closed were not lazy. Most were brilliant operators, and the maths simply ran out of room.
But I am not writing a eulogy, because that is only half the story. While the headlines count the closures, people are still backing themselves. Down in the Illawarra an operator just won the lease on a beachside pavilion. Out in the Hills, a couple just opened an Italian-Argentinian deli because they had a recipe and a reason. For every set of keys handed back, someone is turning a key in a new lock. The appetite has not gone anywhere. The model is just unforgiving.
So what actually works right now? The same things that always worked, with no room for slop. Know your numbers cold, every week, not at tax time. Give people a real reason to walk past the cheaper option, because "we are a cafe" is not a reason. Look after your staff, because a good team is the only thing that compounds. And stop discounting yourself into the grave. A queue paying nothing is not a business.
While we are at it, the real charities are doing it tougher than any of us. There is a community kitchen in Sydney's southwest that got pushed out by contamination and parked in a building that is barely standing. If you want to know how tight it has got, start with them, not with me.
And the biggest disruptor of the lot? It has not even properly landed yet. Artificial intelligence is going to reshape how every small business runs, for better and for worse. But that is a column for another week.
If you are white-knuckling through a quiet month, I am not going to blow smoke. It is hard, and it might stay hard for a while. But hard is not hopeless. This trade has been buried before and keeps climbing back out, because people will always want a good coffee and somewhere to sit while they drink it. That has not changed in twenty years. It is not changing now.
Stay caffeinated. I'm out.
Sources: The Sydney Morning Herald, Nine, The Daily Telegraph.
