How to deal with public holiday surcharge
Do you think restaurants and cafes should charge a holiday surcharge? Customers often complain to businesses when a public holiday rolls by and they implement a surcharge even when it is common practice in the food industry.
Businesses explain that Sunday and public holiday surcharges go to the additional operating costs that come with public holiday operations, including higher employee wages. Is there another way to shoulder the additional costs though? This surcharge is just a way for owners to cover the penalty wages they need to pay their employees for working on public holidays. For some restaurants that experience slower business on public holidays, the surcharge allows them to simply break even.
It is legal for restaurants and cafes to charge a surcharge on Sundays and public holidays, however they must inform the customers of their intent. One way is by adding a note to the menu advising that a surcharge applies on specified days. Some restaurants just add a column on the menu showing public holiday prices.
Most customers understand the need for restaurants to charge extra on public holidays, but they still tend to complain about it especially when there’s not a lot of establishments open during that time. Restaurants attract more customers though if they don’t charge public holiday surcharge. There are plenty of restaurants that simply build the surcharge into their ongoing pricing and this creates competition.
If you are considering forgoing the public holiday surcharge, you can choose to open your establishment on certain public holidays that your restaurant will likely be busy. This means there will be enough customers to cover the cost of opening on that public holiday. You may also spread the cost of staff penalty rates by planning an annual pricing strategy so your customers won’t feel upset for visiting you on a public holiday.
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It’s good practice to review your numbers from previous public holidays, including your operating costs and revenue to find out the best approach you can take on public holidays. If your books leave you a bit confused, you may contact an expert.
As you look for different ways to grow and improve your business, seeking professional advice from a business accountant and consultant could prove to be an important and helpful decision.
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