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Hundreds of family-run restaurants, cafes and shops are going to the wall across Australia as the cost of living crisis bites – with an Italian restaurateur forced out of business by skyrocketing inflation.
Australian companies are going bust in increasing numbers under the combined weight of rising costs, soaring interest rates and consumers tightening their belts in response to higher interest rates.
Some 484 businesses went into administration or liquidation across the country last month, up 45 per cent from the same time a year ago, according to data from the Australian Securities and Investments Commission. The February figure represents a whopping 134 per cent increase from January this year.
Electricity bills have already surged across the country, with more than 500,000 households facing another increase of at least 20 per cent this winter.
This – combined with the surging costs of fruit, vegetables, fuel, rising interest rates and consumers tightening their belts – has hit small, family-run restaurants, shops and cafes especially hard.
The situation is so dire that some small-business owners are even selling their homes or working second jobs to try to make ends meet.
Rocky Pitarelli shuttered Caruso’s Italian restaurant for the final time on Sunday – a much-loved eatery he has run with his wife Kerrin in Gymea, New South Wales, for the last five years.
Rocky Pitarelli (pictured here with controversial neurosurgeon Charlie Teo) blasted Prime Minister Anthony Albanese for not showing enough love to the small businessman
Mr Pitarelli’s expenses have skyrocketed in recent months
Rocky Pitarelli (pictured) addressing diners in his now-closed Italian restaurant Caruso’s
‘No matter what avenue you turn they are asking for more money,’ he told Daily Mail Australia.
‘Chicken was $9.80 a kilo three months ago – now it’s $11.50. A drum of oil was $40 – now it’s $85.
‘Chips – the humble French fry – used to cost us $20 a box – now we are at $67.
‘Utilities used cost us $500 a month – now it’s $700 and today they are saying it will be another 20 per cent.
‘There’s no regulation. Everybody is looking after their own pockets.’
Mr Pitarelli, 50, blasted Prime Minister Anthony Albanese for not helping small businesses.
‘Is this guy ever in the country?’ he said.
‘It seems he’s always on a holiday forgetting about the nation and is more concerned with making love to the world than helping the small businessman.’
He added: ‘What happened to we are all in this together? There was so much Kumbaya love during Covid: “we’ve got your back small business – we are here for you”. And it was true.
‘With Gladys and ScoMo I felt loved. But you can’t offer a branch and take it back in the year.’
Mr Piatrelli, who was fully booked for his final weekend, also reserved his ire for consumers who seemed to prefer spending money at big chains.
‘It’s a sad truth,’ he said. ‘We’ve all got really lazy and seem to have forgotten about the mum and dad operator.’
Narelle Lucas (pictured) is closing her artisanal shop Wild Earth Mother which stocked 20 local producers in the small town of Yarram in Victoria
Jenny Hyde, 59, opened café and ice cream parlour 32 Below in Smithton, Tasmania six months ago.
But she is closing the doors for good because of rocketing costs.
‘Rising energy costs and staff wages have really hit us,’ she told Daily Mail Australia.
‘I was still working part-time as a nurse – day shifts, lates, nights – in order to pay the bill and keep it afloat.’
‘The days I wasn’t working in the hospital I was in the shop. I’ve done that for six months and I’ve taken it alone but I’m just not prepared to do it anymore.’
Ms Hyde, who employed three staff members, criticised the lack of government help for small business owners.
‘You have to have six months of trading to get any help from them and holding out for that long has just killed me,’ she said.
‘People are staying home more. They used to go out as a treat because they could but now it is a luxury.’
She added: ‘The interest rates keep going up and up. You’ve had ten in as many months. How are people supposed to survive? I think it’s only going to get worse.’
One cafe owner even sold his home in a desperate bid to keep his business afloat.
Bailey Walters, who last year was voted Young Achiever of the Year at the Restaurant & Catering Industry Association awards, was forced to liqudate his cafe, Caleo, in Warners Bay, New South Wales last week.
In a heartfelt Facebook post, he apologised to staff and suppliers who have been left out of pocket.
‘I thought I could save the company by selling my house and putting the money into the business,’ he wrote.
‘I was working 100+ hours a week (without pay) behind the scenes to do everything I could to get us out of this mess, but there was no saving Caleo, put simply the money just wasn’t coming in and the bills just wouldn’t stop.’
Daily Mail Australia approached Mr Walters for comment.
Darren Collier (pictured) has taken the decision to close his Melbourne restaurant SpitJack because he ‘can’t really see things getting any better’
In Melbourne, Darren Collier has taken the tough decision to shut his fire-based flatbread restaurant, SpitJack, a little over a year after opening.
‘We could keep going but with the recession, rising inflation, interest rates going up we have already seen a levelling out of diners,’ he said.
‘With everything culminating in perfect storm, it’s turned out to be more of a struggle than we anticipated. We are nowhere near where we wanted to be and we can’t really see things getting any better for us in the next year.’
The restaurant, which employed up to 12 people at its busiest, was impacted by energy costs and wage increases.
‘In a tough and tight industry with very small margins, the electricity bills and wage increases also hit the bottom line quite significantly,’ he said.
Mr Collier said a ‘cultural shift’ was required in order for consumers to accept that they had to pay more for food.
‘It’s just not sustainable for a lot of businesses right now unless you have lots of volume coming through,’ he said.
Belinda Rodwell, owner of Bell’s Kitchen & Takeaway in Vincent, Queensland, was also forced to shut up shop two weeks ago.
‘I was paying $1,600 a month for rent and power,’ she said.
‘You’d expect to pay that in a shopping centre, not a small cafe in Vincent.’
Mrs Rodwell, 47, would give up to 50 free meals away a day to homeless people and also supplied the tuck shop to the local school.
While she was battling to keep the cafe open she had her car stolen and was also diagnosed with heart failure with doctors giving her just five years to live.
At one stage she was worried she would not be able to afford her medication which costs $200 a month.
‘As long as I was working and serving members of the community I was okay,’ she said.
‘But the overheads were just out of control and we had no option but to close,’ she said.
32 Below, an ice cream parlour and cafe in Smithton, Tasmania, has closed after just six months
Elsewhere, small shops are folding because of lack of demand and rising bills.
Narelle Lucas, 49, runs a local produce shop called Wild Earth Mother selling artisanal food and drinks in Yarram, Victoria, a town with a population of just 2,000.
But she is closing it after her customers just ‘vanished’.
‘They dropped off every interest rate hike,’ she said. ‘And then in January, what I used to turn over in a day I was turning over less than that in a week. People just don’t have any money to spend on luxuries.’
Ms Lucas’s shop stocked 20 other local producers.
‘My shop closing will impact the lady who makes the pies, the two cheese makers, the butcher who makes the small goods,’ she said.
‘All these people are losing all that money from me every week.’
‘We’ve really tried to hang on but it’s not going to get better any time soon – it’s just going backwards. This is just our little town but this is going to happen in every small town across Australia.’
Yarram, which has a population of just over 2,000, is also losing its bookshop because it cannot make ends meet.
Ms Lucas was critical of the Government schemes aimed at helping local businesses.
‘Being an artisanal business I can apply for agricultural grants and so can a lot of the producers that I buy off. But they are very difficult to get – you actually have to pay all the money up front. Say your application is for $20,000 and the Government will give you 50 per cent back, you have to find that $20,000 first.
‘If small businesses had $20,000 they wouldn’t be asking for Government grants.’
Suresh Manickam, CEO of the Restaurant & Catering Association which represents small businesses in the hospitality industry, urged consumers to remember that they ‘bear the brunt’ of rising costs.
‘Small businesses owned by mums and dads are dealing with higher electricity prices and rising interest rates at home and in the family business.,’ he said.
‘They have no choice but to either struggle to breakeven or to pass on these higher costs by increasing menu prices. Higher menu prices are the inevitable consequence from the inflationary pressures faced by small businesses.’
Energy bills have skyrocketed across the country, with over half a million Australian households facing another increase of at least 20 per cent this winter
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