Why Lygon St small businesses are struggling after coronavirus lockdown
Lygon St, a Melbourne drawcard for tourists and public street celebrations for decades, has been among the hardest hit heritage strips during COVID-19 restrictions. As it stages a fight back it needs an important ingredient to return to former glory.
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Melbourne’s heritage food and retail precincts like Lygon S t will be among the hardest hit by the coronavirus, Australia’s peak retail body warns.
But there are already promising signs the popular tourist strip is staging a fight back.
Australian Retail Association chief executive Paul Zahra said Lygon St’s retailers were feeling the pain because they paid higher rents and relied heavily on tourists and foot traffic to survive.
“Shopping, restaurants, cafes and entertainment go hand-in-hand, and as life continues to return to restaurants, cafes and entertainment hubs there will be more people shopping in these precincts,” Mr Zahra said.
“There is no quick-fix to the issues we’re seeing. Government support can only go so far and ultimately retailers need more people to shop.
“As we move into a recovery period, it’s important that everyone works together — federal, state and local governments, retailers, landlords, and shoppers themselves.”
Long-term Lygon St traders told the Herald Sun that coronavirus had worsened pre-existing problems on the shopping strip and many stores had either reduced their hours or closed.
Lygon St turned into a ‘ghost town’ after the government-imposed lockdown in late March, traders say, echoing the struggles across the city in renowned fashion destination Chapel St in South Yarra.
Some Carlton businesses like The Original Lolly Store and jewellery shop Crystal Heart are keeping their businesses afloat on greatly reduced hours.
Others like Italian restaurant Piccolo Mondo will remain closed until June 22, when up to 50 dine-in customers will be allowed at restaurants and cafes.
And some longstanding businesses, like Casa Del Gelato, chose to stay open and trade throughout.
Owner Eric Pace noticed a huge drop in sales during lockdown at his family’s gelato business of 40 years.
“Usually customers would come in during the day, but there was a period where nobody was out and no foot traffic,” he said.
“Some people are slowly coming back in, which has been good for us and now there’s a little more movement since restrictions were eased.”
Mr Pace said the real test for small businesses would come when JobKeeper entitlements expired in a few months and employers returned to paying staff wages.
Original Lolly Store owner Arthur said Lygon St landlords should halve their tenant’s rent.
“Rents in Lygon St need to drop by 50 per cent to be realistic,” he said.
Arthur even moved his business 10 doors down the street to pay cheaper rent, despite many discussions with his landlord.
“Coronavirus has had a big impact on everyone, but the economy hasn’t been the best over the past few years.”
The business owner remains hopeful business will pick up.
“There’s still fear out there, so people aren’t going to come out in droves. But by September we would like to think people would be acclimatised to the situation and be out spending.”
Crystal Heart owner Marc James agreed Lygon St had changed over the years, but said businesses needed to adapt to survive.
He’s halved his trading hours and staff, and consequently, his usual takings.
But Crystal Heart’s online sales are strong and regular customers are grateful the store stayed open.
“I don’t think it’ll come back to normal for a while,” he said.
“Lygon St isn’t what it used to be — there’s no tourists, no foot traffic.”
Social distancing and hygiene precautions hadn’t stopped customers from visiting his store, Mr James said.
Mr Zahra the outlook for the retail industry as a whole looked positive.
“We won’t see growth for some time,” he said.
“Retail recovery will be slow and it will track alongside our economic recovery. That recovery will take another hit when JobKeeper comes off in September. We would like to see a gentler transition off JobKeeper for the retailers most financially affected – so it’s more of a slope than a cliff.”
Mr Zahra said positive steps taken by some retailers during the lockdown period, like introducing delivery services and takeaway, will help their business in the long term.
“The transformation taking place in the sector is real and it’s largely positive — we’ll see a decade worth of change out of this period, particularly in the transition into online, deliveries and other convenience areas.”
City of Melbourne Lord Mayor Sally Capp said council’s draft budget included a COVID-19 recovery package to help small businesses, including a rate freeze for commercial ratepayers and grants.
“We want to ensure Lygon Street remains an attractive destination for all Melburnians,” she said.
“We’re collaborating with precincts to boost marketing and encourage people back into key commercial areas.”
Carlton Inc president Luca Sbardella said the association had been working to help rejuvenate the business district.
“We have big plans for the street that were temporarily put on hold due to COVID-19 but now they’re back on track and we’re all so eager to see how things play out,” he said.
Carlton Inc has been working with Lord Mayor Sally Capp and the City of Melbourne, Melbourne University, RMIT University, community and residents associations as well as a number of prominent businesses and event organisers.
“There’s no better place situated in City of Melbourne to have a huge resurgence than Lygon Street. We are all very excited for the things to come for Carlton,” he said.
SHOP CLOSURES BY NUMBERS
Restaurants, cafes, bars, takeaway food: 7
Villa Romana, Piccolo Mondo, San Churro.
Fashion, retail: 2
Witchery, Milligram
Beauty services, hair salons, barbers: 1
H & N Nails
Other service (mobile shops, travel centres): 1
STA Travel
Vacant shopfronts: 6
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