One of Australia’s city councils has proposed allowing business to trade 24 hours a day, seven days a week – but would SMEs be able to afford the additional costs associated with longer trading hours?
In a bid to create “a more diverse, late-night city”, City of Sydney Lord Mayor Clover Moore unveiled ambitious proposal to allow businesses to trade for longer periods.
Under the proposals, unlicensed businesses (i.e. those not selling alcohol) operating across Sydney’s CBD would be granted 24-hour trading licenses. That area would stretch from Darling Harbour to Hyde Park and down to Central Station.
Meanwhile, shops, restaurants, cafes and other “low-impact food and drink venues” located on main streets, in particular inner-suburban neighbourhoods, would see their trading hours extended from midnight until 2am.
Performance venues would also have their late-night trading caps extended by an hour on a “trial basis”.
Ms Moore said the proposal came after extensive community consultation on the best way to overhaul planning controls to create more vibrancy in Sydney.
“More than 10,000 people gave us their feedback, and the overwhelming majority said they want Sydney to have a diverse and exciting night-time economy with events and activities for people of all ages and interests,” she said.
“What they do not want is a city that is unsafe or that shuts down as soon as the sun goes down.
“The changes we are proposing to our controls manage the balance between allowing well-managed venues to continue to trade and any impacts on local neighbourhoods.”
Many areas of inner Sydney have suffered under the NSW government’s highly controversial “lockout laws”, which restrict the entry of patrons of sale of alcohol within certain designated areas – but not uniformly across the city.
They were implemented as a means of combatting alcohol-fuelled violence.
Back in 2016, a local real estate agent claimed that the laws were having unintended consequences on unlicensed businesses, as reduced foot traffic slashed sales volumes.
“We recently conducted a rent review on a pharmacy, a thriving business until a few years go, which determined rent needed to be dropped by half,” Malcolm Gunning said at the time.
“The result is not necessarily a windfall for the tenant, because it reflects the poor trading conditions on Darlinghurst Road. The lockout laws have depreciated the value of the premises by half.”
The move to inject new life into the city after dark was enthusiastically welcomed by Kerri Glassock, Sydney Fringe Festival CEO and co-chair of the council’s nightlife advisory panel.
“While the night-time economy is important to the financial wellbeing of our city, it also makes up the fabric of who we are as a city, our local stories and the unique offerings we have for our residents and visitors,” she said.
“It's wonderful to see a local council proposing changes that actively encourage diverse and unique offerings not only in the CBD but on our village high streets.”
A potential spanner in the works, however, is the higher operating costs that come with extended trading hours.
This is particularly pertinent given that the Fair Work Commission ordered increases in penalty rates under the retail award for Saturday hours and evening hours after 6pm on weekdays, which took effect from 1 November 2018, with further incremental increases planned over the coming years. Sunday penalty rates, however, will see phased reductions.
“We are very supportive, and continue to be supportive, of extended hours for retailers. But the question is how do you deal with it [cost wise],” Russell Zimmerman of the Australian Retailers Association told My Business.
He said that many retailers and business owners may feel like “It’s too hard to make money now, so I don’t dare to trade much beyond what I’m doing now”.
Mr Zimmerman did suggest, however, that a more flexible approach to trading hours may enable businesses to better capitalise on peak periods like schools holidays and major events such as Vivid Sydney, where substantially higher foot traffic outweighs the additional cost burden.
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