Cafes forced to drop 15% surcharge this Easter
Cafes may be forced to drop 15% surcharge this Easter
With consumer confidence and spending waning, many of the country’s restaurants and cafes may be forced to drop their public holidays surcharge this Easter. Others may choose not to open, predicts Auckland’s leading retailing district.
Restaurants and cafés began imposing surcharges on statutory holidays after the introduction of the Holidays Act 2003 that entitled workers to time-and-a-half and a day in lieu on those days. The average surcharge is 15%.
“It’s an increasingly tough and competitive marketplace and so those businesses promoting no surcharge will have a big advantage this year. That will force others to follow,” said Cameron Brewer, general manager of the Newmarket Business Association.
“As well cafes feeling they have no option but to drop the surcharge, we’re also predicting fewer will open their doors simply because the risks and costs are too high given the relatively flat economy.
“Labour is a major cost for hospitality businesses and let’s not forget that the Holidays Act has effectively made labour costs 150 percent higher on a public holiday than on a normal working day.
“With a roaring economy over the past few years, most people haven’t minded paying a bit extra over Easter. However, this cavalier consumer attitude is changing and quickly.
“The consumer is being hit in the pocket from all directions and is becoming increasingly wary. Increasingly, price is very much a driver in the consumer’s ultimate decision making.
“Sadly this Easter the Holidays Act will probably bite business harder than it has in previous years,” says Cameron Brewer.