Chef, author and television personality Opel Khan has issued a grim warning for the Australian hospitality sector as he closes most of his restaurants in Sydney.
‘Food costs have increased by 40 per cent, we cannot increase the price we charge customers. ‘Wages have gone up, interest rates (have gone up),’ Khan said.
The public figure, who has a whopping 2.8 million followers on Instagram, shut down his Open Group website on Tuesday and gave an exclusive interview to Sydney Morning Herald.
The website, which previously featured Kahn’s various Harbor City restaurants, now displays an error message.
In May, the chef replaced his signature restaurant Khanaa in Surry Hills with Bistronomie, a venue he promoted as affordable dining for tough times.
It has already closed.
Khan also scrapped his plans to open a second Bistronomie outpost at the ill-fated Potts Point site that previously housed the ex-Gastro Park and Antipodean restaurants.
His Metisse restaurant opened there in 2019.
Chef, author and TV personality Opel Khan (pictured) has issued a grim warning for the Australian hospitality sector as he closes most of his restaurants in Sydney.
The upscale restaurant, named after the French word for mixed race, opened with chef Benoit Lollichon, a graduate of Michelin-starred restaurant Guy Savoy.
Kahn told the publication that he left Metisse and also made the difficult decision to close his small pasta restaurant called Acqua E Farina.
“A friend who owns many stores says he can’t make money right now,” he said.
“I’m going to take a little break, but I live and breathe food and wine, so don’t rule me out from opening another restaurant.”
Those who have the means to freeze their empires until the economy turns around, like him, are doing so.
Meanwhile, smaller operators and family businesses may be forced to close their doors forever.
Food costs have increased by 40 percent, we cannot increase the price we charge customers. ‘Wages have gone up, interest rates (have gone up),’ the celebrity chef said as he announced the closure of several high-profile restaurants.
The Bangladeshi-Australian chef said he has found new operators for his shuttered locations: the Acqua E Farina store will go to a Vietnamese restaurant and the Surry Hills Bistronomie location will go to a Chinese restaurant operator.
However, he will keep the doors open at his beloved Boccone Pizza in Potts Point.
It comes on the heels of a series of recent restaurant closures in major cities Sydney and Melbourne, including several cafe franchises Hog’s Breath, Epocha in the heart of Melbourne’s foodie precinct and Warike in Surry Hills last month.
The Sydney fusion restaurant that was born during the Covid lockdowns was famous for its “divine” take on Peruvian-Japanese food, which had diners raving about “inventive” dishes such as scallop, oyster and kingfish ceviche.
Restaurants and cafes are failing at a higher rate than other Australian businesses as consumers run out of money and retail rents soar amid the cost of living crisis.
“There’s just no money to be made right now,” said the former owner of French restaurant Metisse, affordable Surry Hills restaurant Bistronomie and Acqua E Farina in Potts Point.
Rents place a particularly high burden on food and beverage outlets as they are typically located in retail areas with high foot traffic and relocation for better deals typically results in less trade.
Food and beverage companies were falling at the highest rate of all industries tracked by credit reporting bureau CreditorWatch.
In August, companies in the sector were going bankrupt at a rate of 8.2 percent.
Hospitality companies are particularly vulnerable to higher interest rates as consumers reduce discretionary spending.
CreditorWatch chief economist Anneke Thompson said conditions had deteriorated quite quickly for the sector after a good run following the Covid lockdowns, when people had no opportunity to spend on outings or holidays.
But since then much higher mortgage and rent payments have begun to weigh heavily on consumer spending, making it difficult to raise menu prices to cover higher business costs.
Overall business failure rates had increased 17.3 percent since January and are now at their highest level since early 2021, in the midst of the COVID-19 pandemic.
Business Council chief executive Bran Black says it’s not just the economic climate that makes running a business difficult, but also political decisions.
In a speech at the business lobby’s annual dinner Tuesday, Black took aim at the federal government’s workplace changes, saying they were a deterrent to hiring.
Prime Minister Anthony Albanese, speaking at the same event, responded by saying job creation had been strong thanks to the reforms.
Albanese expects Thursday’s labor force data to show that one million new jobs have been created during his tenure.
“We are proud to be pro-business and pro-worker,” he said in a speech.
“We understand that secure jobs and fair wages depend on thriving businesses, just as we know that productivity gains depend on skilled workers and safe workplaces.”
Mr Thompson said Australian businesses were operating in extremely difficult conditions.
Low levels of consumer spending, high inflation and rising interest rates have been putting pressure on businesses.
However, the high failure rates also reflect a level of “catch-up” from pandemic-era lows, Thompson said, when many businesses were saved by JobKeeper payments and a pause in collections. of debts from the tax offices for companies.