‘Won’t survive’: Sydney businesses struggle as workers turn their backs on the CBD

Australia’s biggest city is a shadow of its former self, with countless business owners warning they are now facing a ticking time bomb.

Before Covid turned the world upside down, Marino Plagiotis’ bustling CBD cafe would be booked out on Fridays.

But now, the city is so quiet he’s had no choice but to reduce staff numbers at the end of the week – and like countless other small businesses in inner Sydney, it’s a struggle just to break even.

Mr Plagiotis, who runs the Hungry Bean Cafe on Clarence St, told news.com.au workers were shunning the office on Mondays and Fridays post-Covid, and that the trend, coupled with months of bad weather and ongoing public transport strikes, had devastated small businesses.

“We have a large cafe with 140 chairs and we’ve been here for many, many years. Before the world sneezed, we would be booked out by Wednesday and most cafes and restaurants anywhere in the CBD would have extra staff called in on Fridays because it was the best day of the week. Now it’s the exact opposite – it’s the worst day, followed by Monday,” he said.

“People need five days a week (of earnings) not three – if it’s only three days, how do you manage a profit?

The Hungry Bean used to be booked out on Fridays. Picture: Facebook

“The best most businesses are doing is just paying the bills and keeping their heads above the water, I do not believe there are many that are killing it every week.”

He said the impact was so severe that many businesses had already collapsed.

“On this street alone there are six or seven cafes that are never coming back … a lot of business owners are sick of paying rent when out of 100 workers on one office floor, only five turn up on a Friday,” he said.

“Others are stuck – they can’t make more money even if they wanted to once things get busier because they can’t hire more staff, there aren’t enough workers.”

He said some eateries were only opening at a limited capacity as they no longer had the staff to service a full venue, and that most workers were taking on additional duties as a result of staff shortages.

Businesses facing ‘financial ruin’

The situation is not a new one, with independent MP for Sydney Alex Greenwich writing to former Minister for Small Business Eleni Petinos back in July to plead for “urgent assistance to protect small business owners in the central business district from financial ruin”.

Mr Greenwich, who previously raised the same concerns with the Treasurer in January, explained that the latest omicron wave had “extended and deepened impacts on small

CBD businesses”, with inner city precincts battered by “significantly reduced numbers of workers and visitors”.

“A number of CBD small business operators have contacted me about significant financial

hardship due to the ongoing Covid-19 pandemic,” he wrote.

“They tell me that they signed commercial leases when the central business district was filled with hundreds of thousands of office workers and visitors, but have faced more than two years of lockdowns, work from home policies, and community fear of going out that have cut trade and income but not reduced costs.”

Alex Greenwich wrote to former small business minister Eleni Petinos warning that Sydney small businesses faced ‘financial ruin’.

Mr Greenwich is calling for more support for business owners. Picture: Damian Shaw/NCA NewsWire

“Small business operators who have contacted me say that landlords have only agreed to

small rent reductions for very short periods, leaving them paying full rent despite significant

loss of business. They say they have accumulated significant debt and are at risk of business

failure and bankruptcy.

“Commercial hardship grants, government fee rebates, expanded outdoor dining space and

Dine and Discover vouchers did not prevent escalating debt for CBD small business owners

and I again urge you to extend government help to protect business owners from ruin until

pandemic conditions are well and truly over.”

Sadly, in the weeks since that letter was first penned, the situation has only worsened as workers and visitors steered clear of the city during August as ongoing public transport strikes regularly ground the city to a halt.

Businesses ‘won’t survive’

It’s a situation Business Sydney executive director Paul Nicolaou is all too familiar with, explaining to news.com.au that it was a “sad” sight walking through Sydney’s CBD on Mondays and Fridays post-Covid.

“Tuesdays, Wednesdays and Thursdays are manic but you don’t see a lot of people on Mondays and Fridays,” he said.

“It’s rather sad, to be honest – a lot of small to medium-sized business owners are quite depressed about it because they rely on people coming into the city Monday to Friday as they’re not open Saturdays and Sundays.

“Cafes, restaurants, hairdressers, dry cleaners, shoe repair shops, newsagents, chemists, you name it – they’re all struggling.

Sydney’s CBD resembles a ghost town on Fridays and Mondays. Picture: Nikki Short/NCA NewsWire

“They rely on passing trade and when people aren’t coming in, they really suffer.”

Mr Nicolaou said many businesses were seeing earnings drop by as much as 50 per cent on Mondays and Fridays and that there was a “100 per cent” chance some ”won’t survive”.

“Energy bills are going up, the cost of food and beverages is going up, and they are struggling to find staff,” he said.

“Big businesses like Star and Crown casinos will survive but small business owners are struggling big time.”

Mr Nicolaou is now pushing for the state government – the biggest employer in NSW – to order public servants to return to the office at least three to four days a week to boost foot traffic in the CBD.

He’s also advocating for the reintroduction of the NSW government’s $25 “Thank God It’s Friday” lunch vouchers which were paused as the Omicron variant tore through the state.

He’d also like to see free public transport on Fridays or Mondays for six months to kick start the city’s economy, and said work needed to be done if Sydney was to maintain its position as the “number one city in the Asia-Pacific”.