NEWS OF THE imminent closure of Bewley’s Cafe on Grafton Street has highlighted the dismal outlook for businesses in the heart of Dublin’s city centre as a result of the Covid-19 pandemic.
Managing director Cól Campbell, whose father Paddy Campbell owns the company behind the Bewley’s Cafe told staff on Wednesday that they have concluded the business could “generate substantial and unsustainable losses into the future” as a result of the pandemic.
Also referenced in the message to staff was the firm’s €1.5 million per year rent bill, which it pays to its landlord, a company controlled by developer Johnny Ronan.
Last year, Grafton Street ranked 13th in the world and seventh in Europe in global real estate firm Cushman Wakefield’s list of the most expensive shopping streets for commercial rents.
Although the government has announced a commercial rates waiver for businesses, cafe owners in the south Dublin city centre fear the prospect of being squeezed between the relatively novel problem of reduced footfall and a long-standing one, which is high commercial rents.
They are also grappling with the logistics of running coffee shops in adherence to social distancing measures when they are allowed to reopen in June.
Genuine panic
Despite losing “85% of business”, one businessman, Buzz Fendall says he feels lucky.
“We have a very, very understanding landlady who does understand the situation. And we will go into negotiations in around six weeks or so to see what we can do.”
In the meantime, he says, “we are all hoping that the government comes together with some sort of package to help us all out”.
Fendall is the owner-operator of the Bald Barista in Dublin 2, which before the pandemic, employed eight people. At the moment it’s just Fendall and his wife running the show, serving takeaway coffees to a few loyal regulars.
“God, we’d love to hire them all back”, an audibly upset Fendall says of his former employees.
“But we understand that we won’t be able to. Most of them are long-term employees. And, you know, we’re more than a family here… What can I say?”
He says that there is “genuine panic” among his peers about how they are going to adapt to the new environment.
“I was talking to a cafe owner yesterday who came to see us. He has two cafes. Quite simply, he’s trying to quickly turn them both into takeaway units. That’s all he can do. That is an unknown.”
Dead zone
Colin Harmon, chief executive of coffee wholesaler and cafe chain 3Fe, thinks that a lot of shops like his are going to have to shift completely to the takeaway model even after the current restrictions are eased. This, he says, is because social distancing and reduced occupancy rules will make sit-down service unprofitable.
When people say to me, you can open up and distance people, it won’t work. If I can put a counter at the door and serve coffee with two or three people, that will work.If I can have a full cafe with 50 people, that will work. Everything in between is a dead zone. There is no point in trying.
Harmon says that answering the rent question in the short-term will vary for owners depending on their relationship with landlords, which will be different for larger businesses and smaller ones.
“I think the smaller businesses can be more nimble in a way.
“If you’re a big business (in the city centre) and you have an 8,000 square foot restaurant, you’re probably renting from a big hedge fund and they’re going to be a little bit less sympathetic,” he says.
Before the pandemic, 3Fe employed 54 people at six cafes in Dublin, two of them in Dublin 2, half of which have had to close temporarily.
Three outlets have stayed open as ‘takeaway-only’ and Harmon says a fourth will open tomorrow, although most of the money coming into the business in recent weeks has come from online sales.
He says, “If your business is functioning at half the capacity it used to be, it seems reasonable to me that you should be able to go to your landlord and say, ‘Well, can I pay half the rent?’ And a lot of times, that will depend on the relationship you have with your landlord and all that kind of stuff.
“There’s a lot of very complex situations going on.”
To make the situation less complex, Harmon wants the government to intervene with commercial rent reliefs.
“The disappointing thing for me has been that the government hasn’t stepped in because, in the vast majority of cases, cafe owners are being reasonable, landlords being reasonable, and they’re trying to figure something out.
“You do hear situations where (landlords) are not budging. But I think a lot of the time (it’s because they) are waiting for the government to step in and help in some way.”
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