Sandy Bay businesses facing collapse as cost-of-living, rent increases bites

Rising rents, decreased consumer spending, and ever increasing cost-of-living pressures are biting Sandy Bay hospitality businesses hard, with many forced to shut their doors. What can be done.

Brew Coffee owner Richard Scarr at Sandy Bay. Picture: Chris Kidd

A Sandy Bay cafe owner says rising rents, decreased consumer spending, and ever increasing cost-of-living pressures are pushing many Sandy Bay businesses to the brink of collapse.

Brew Sandy Bay owner Richard Scarr said the Sandy Bay food scene has seen dramatic changes in the past year as numerous businesses have shut up shop and left the area.

Closures in the precinct include hip coffee joint Sash Coffee, which shut its doors for good in 2021, while popular burger joint Burger Got Soul served its final meal in August after more than 12 years on the strip.

Sandy Bay. Picture: Chris Kidd

Mr Scarr said more businesses would be forced to close unless spiralling interest rates cutting into disposable incomes, hikes in power costs, and higher insurance premiums are curtailed.

“The Covid period was hard, but this period we’re in now, I’d say, is harder,” Mr Scarr said.

“This is not just businesses at Sandy Bay, but nationwide. There is a massive amount of small businesses overlooking the cliff.

“With wage and rent increases, rate and electricity hikes, insurance premiums going through the roof … For a small business with three cafes that in reality really is setting in.”

According to Mr Scarr, the tax office has also played a big role in those collapses.

“Tax debt is the primary reason, but higher operating costs are also pushing businesses to or over the edge,” he said.

“I’m sure there are a lot of businesses like me who are still paying off a Covid tax debt. I’m paying off a debt of $150k, or about $3000 each week, to the ATO.

“Surely the government would rather relieve small businesses of this debt than force them to hobble through this struggling time.”

Vacant shop at Sandy Bay. Picture: Chris Kidd

Mr Scarr also said that while some landlords were willing to negotiate rent with tenants on the strip, if the current climate continues, landlords may have to “come to the party” to ensure the strip stays alive.

“I think that if you look at all the empty places and the cafes for sale, landlords and agents need to check in to see where the industry and where the economy is at and charge accordingly,” he said.

Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said

“We know many businesses are on the edge because they can’t keep up with the rising cost of doing business in Tasmania,” Mr Bailey said.

“Many businesses are right on the brink, and the government, in particular, needs to look at what it’s charging businesses and whether or not that’s sustainable into the long-term.

“There is no doubt businesses are entering a really difficult period, and we need the government to do what it can to support businesses. Otherwise, we will see unemployment increase and the economy slow down, which would be bad for everyone.”

Originally published as Sandy Bay businesses facing collapse as cost-of-living, rent increases bites