‘Grim’ reality of Melbourne retail industry after being hit by two lockdowns

The second lockdown has seen some businesses barely staying afloat, making just one sale a day after the city was faced with another lockdown.

Melbourne’s small businesses are fighting for survival as the city weathers its second lockdown since the coronavirus pandemic rocked Australia in March.

Walking down the iconic shopping precinct of Chapel Street reveals just how badly most retailers have been affected by Stage 4 virus restrictions.

It is estimated that more than 15 per cent of businesses in inner-Melbourne alone could permanently shut their doors due to the cumulative effects of the two lockdowns.

Some small businesses have already been forced to close permanently, while others have managed to hold on, adapting to current climates by taking their trade online.

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Melbourne retail businesses are struggling to stay afloat after being hit by the second lockdown. Picture: Wayne Taylor

Chrissie Maus, general manager of Chapel Street Precinct, who oversees 2,200 small businesses in the area, said while some businesses have pivoted, there are many where revenue has been “absolutely decimated”.

“There are many cafes and restaurants trying to go online, but in some cases they are only selling one pizza, or one meal a night — it is heartbreaking to watch,” Ms Maus told news.com.au

She said revenue loss is in the “millions upon millions” with consumer spending declining considerably as people are being more cautious now that they are living in a “state of the unknown”.

According to City of Melbourne data, the municipality’s hospitality industry contributed $2.5 billion to the Victorian economy before the pandemic struck, but just 45 per cent of food businesses managed to keep operating during the six-week April and May lockdown.

“The unknown is really weighing on the businesses and they need some kind of hope,” Ms Maus said.

“We need to have an idea of what the government are looking at doing, as there hasn’t been any clarity.”

There are different business sectors having one sale a day, if the are lucky, according to General Manager of Chapel Street Precinct Association, Chrissie Maus. Picture: Wayne Taylor

A road map out of lockdown will be unveiled on Sunday, with Victorian Premier Daniel Andrews saying another week of COVID-19 data was crucial to finalise the plan — but Ms Maus said that while small businesses only have to wait another week, “what it will include is causing a lot of anxiety”.

“We hope the map is far more clearer than past communication. Last time when we went into Stage 4, there was so much confusion over who could and could not open,” she said, adding that the road map will set the fate for a lot of small businesses.

She said the last 12 months had been relentless with some huge developments (on King Street) cutting off foot and road traffic which has been disruptive for many businesses.

“The sad thing about this is in the lead up to Christmas we started seeing more shops open but just as we turned the corner, the smoke (bushfires) hit and coronavirus began — so it has been death by a thousand cuts.”

Tom Langford, who runs the popular Prahran store, Casa Amuk, is one of many owners affected by the trifecta of recent events.

He said it is the coronavirus pandemic that has forced his business to close for the first time ever, telling news.com.au that he too has faced the hurdle of making just one sale a day through phone purchases.

Chrissie Maus oversees 2,200 small businesses. Picture: Supplied

“It’s the first time our store has been fully closed, which obviously means a further reduction in sales,” Mr Langford said.

He is in the middle of finalising rent relief with his landlord, and like many others, he is being propped up by JobKeeper which he said has been a “saving grace”.

However, the store he has spent six years establishing on Chapel Street is sadly “treading water at the moment”, he tells news.com.au

He said in order to keep his physical business afloat, the government needs to provide more clarity and certainty.

“We need to know what it is going to look like, we need to be able to plan,” he said.

“We have made the decision to fight for what we’ve built on the street, but we will definitely be only treading water at best.”

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Casa Amuk, born and designed in Melbourne, first opened its doors on Chapel Street in 2014 but has to close its doors for the first time ever, due to the coronavirus pandemic. Picture: Supplied

Mr Langford said that while one of the benefits of his industry is online shopping, it has been met with “varying levels of success”.

“Being able to receive stock has been a huge challenge for us, the bulk of our product is produced in Peru, which has been heavily affected, so we’ve had to focus on other areas of our business to have something to actually sell,” he said.

“For businesses like ours, stock management is the largest hurdle, especially with the end of winter now here, being able to get a return on investment for winter stock to reinvest into spring/summer stock is a challenge, on top of reduced sales.”

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Owner of the store Tom Langford said he may be forced to close for good due to the current climate. Picture: Supplied

He said the company faces the realistic possibility of being forced to clear stock at heavily reduced capacity — or make the decision to box up stock and hold on to it for next winter.

“And this will stretch cash flow if you can’t make the sales.”

The 33-year-old said the retail industry is in “absolute crisis” and while fashion boutiques are the “heartbeat” of Melbourne, many won’t survive the current climate.

“It’s pretty grim. There’s more than 50 vacancies between Toorak Rd and High Street,” he said, adding that he will soon have to make a similar decision to let go of his physical store if the road map doesn’t work in his favour.

In order for the more than 2,000 businesses to have a chance at surviving the COVID-19 economic downturn, Chapel Street Precinct Association is urging Melburnians to support local.

“Opt for boutique stores over chain stores. Check to see what your favourite fashion spot is doing for click & collect or delivery,” said Justin O’Donnell, president of the Association.

“Retail has been knocked out in two rounds toe to toe with shutdowns, we must be doing everything to ensure they stay in the ring.”