Victoria coronavirus: 15 per cent of Melbourne businesses won’t survive lockdown

The economy is still licking its wounds from the first lockdown and it’s feared another in Victoria will be a bridge too far for many businesses.

Melbourne businesses are bracing for another “devastating” blow as more than 15 per cent say they will be forced to close for good during the city’s second coronavirus-induced lockdown.

Residents in the bustling Victorian capital have retreated indoors for the next six weeks as the state government grapples with a surge in cases.

Lord Mayor Sally Capp said more than 16,800 businesses normally thrive on the nearly one million people that flock to the city’s centre each day but that foot traffic was slashed by 90 per cent during the initial weeks of the first lockdown.

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She says Melbourne is now at risk of losing a significant chunk of its iconic restaurant and cafe scene, a sector which contributes $2.5 billion each year to the state’s economy.

“We expect foot traffic to fall even further over the next six weeks as people take the necessary safety precautions to slow the spread of the virus,” the Lord Mayor said in a statement provided to news.com.au.

“It’s concerning that around 15 per cent of businesses surveyed before the second lockdown announcement said they would close their business permanently — or they haven’t decided if they will reopen.

The Lord Mayor is concerned the city’s iconic hospitality scene will suffer a devastating loss. Picture: Darrian Traynor/Getty Images

“Only 45 per cent of our food businesses said they’ve been able to keep operating through the pandemic. They’ve showed real innovation in being able to offer takeaway or implement physical distancing requirements.”

Cr Capp pleaded with residents in the city to engage with businesses attempting to pivot operations during the second wave of enforced lockdowns.

“I’m asking everyone to continue to support their favourite local haunts through takeaway and delivery orders,” she said.

“These businesses represent what we know and love about Melbourne. They need our support more than ever.”

The alarming forecast comes after a separate survey last week revealed the true cost of the first round of lockdowns with three in four small businesses nationwide losing up to 75 per cent of revenue.

And the smaller the entity, the heavier the losses, according to leading researcher the CT Group.

Nearly one-third of sole traders say they have lost more than 75 per cent of their income, compounding the significant blow to business during the summer’s devastating bush fires.

On Wednesday, Treasurer Josh Frydenberg said a “targeted” income support scheme will be announced on July 23 to ease the economic shock expected once JobKeeper and JobSeeker expires in September.

Its not yet known how the Federal Government’s next wave of support would be allocated but small business minister Michaelia Cash told news.com.au it would make sense to support hard-hit industries such as hospitality and retail nationwide rather than narrowing the focus to Victorians.

“What we are currently doing as a cabinet is working through what the next level of support that is needed to be provided to those businesses that we know will still be doing it tough after September,” she said.