As the hospitality industry crawls its way back from the grim depths of pandemic shutdowns, the battle to stay afloat for many venues has remained.
Crippling staff shortages in combination with soaring produce costs and unpredictable trading has served as a reminder of Australia’s ongoing economic volatility, almost a year after the country’s final lockdown lifted.
While crowds have rushed to flood entertainment and hospitality venues in eager bids to make up for lost time, the sad after effects of the Covid pandemic which have been compounded by recent produce hikes, have continued to be felt.
With the consumer dollar not stretching as far as it did pre-pandemic, some of the country’s favourite pubs have been left in a sticky position – to either hike up prices or absorb extra costs and hold out hope for running cost reprieve.
It’s largely obvious which watering holes have opted with passing costs onto customers, with a popular beachside pub in Sydney selling craft beer pints for $16 and schooners for $14.
Jon-Lee Farrell, co-owner of popular Melbourne pub Lulie Tavern, described the prices as “exorbitant”, saying they were likely to price people out of staying at the same venue for multiple rounds.
“Being in the industry we totally understand but at the same time it’s like, ‘wow, that’s a lot for a pint of draught’,” Mr Farrell told news.com.au.
“We rely on people to come back, and we encourage people to hang out and chat, and be here for hours. So we can’t be charging exorbitant prices, because nobody can pay $16 a pint and have four or five pints, it’s just mental.”
Mr Farrell and his business partner Brendan Kennedy had opted to keep drink prices affordable for their predominantly local customer base, however they were regularly considering a different approach.
“Our ethos has always been to be a local pub for everyone … we’ve worn the costs more than passed it onto the customer at this point,” he said.
Whether prices needed to be bumped up however, was a “conversation we have weekly”.
“We have to tread that line of looking after our local clientele and maintaining our prices while at the same time keeping up with rising costs.”
Trade is impossible to predict
One of the most prominent pressures continually faced by the business partners was how wildly unpredictable both supply and demand had been following the pandemic.
“It was never like this before the pandemic, it used to be super consistent,” Mr Farrell said.
“But now costs stay the same and keep going up, but trade goes up and down like a yoyo.”
He attributed the dramatic shift to customers being more cautious about leaving the house when they had cold symptoms, and a general smaller group of people going out for drinks regularly.
“We would talk to people at neighbouring bars and they might say, ‘we had a terrible Saturday night’ when we had a huge Saturday night,” he said.
“Whereas prior to the pandemic when it was busy, everyone was busy.”
People had also stopped pre-purchasing tickets for live music events Mr Farrell said, with customers happy to attend free gigs but seemingly opposed – unlike before – to buying tickets.
Despite ongoing challenges, the pub owners have remained optimistic about what’s expected to be a booming summer in Melbourne, particularly now tourists have been welcomed back.