WHEN decent customer traffic is mostly confined to lunch hours and perhaps weekends, cafe and restaurant operators in the CBD have my utmost admiration for trying to make a success of their ventures.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The greatest fixed cost that would have to be met in prime locations would have to be rent. Say a main street eatery's premise costs $3500 a month, their mark-up on their wares is 30 per cent, their pies are priced at $4 each, so they make $1.20 per pie. This means they will have to sell 2917 pies a month or 96 pies a day for every day of the year just so they can pay the landlord.
One hundred pies [a day] isn't such an earth-shaking figure until you realise competition from other food retailers abound and the customers are spoilt for choice.
Rent, as everyone knows, can only increase. Same with utility rates and staff salaries. But try increasing prices,and customers will vote with their feet. When revenue is not fixed,when rent forms the lion's share of expenses and the landlord will always have to be paid first, it's serfdom bondage by another name. Put another way, have you ever heard of landlords falling on hard times or going broke?
