Hundreds of mom-and-pop restaurants, cafes and shops are going under across Australia as the cost-of-living crisis hits, with an Italian restaurateur forced out of business by skyrocketing inflation.
Australian businesses are failing in increasing numbers under the combined weight of rising costs, sky-high interest rates and consumers tightening their belts in response to higher interest rates.
Some 484 companies went into administration or liquidation across the country last month, up 45 percent from a year ago, according to data from the Australian Securities and Investments Commission. The February figure represents a whopping 134 percent increase from January of this year.
Electricity bills have already risen across the country, with more than 500,000 homes facing another increase of at least 20 percent this winter.
This, combined with the rising costs of fruits, vegetables, fuel, rising interest rates, and belt-tightening consumers, has hit small mom-and-pop restaurants, shops, and cafes especially hard.
The situation is so dire that some small business owners are even selling their homes or taking a second job to try to make ends meet.
Rocky Pitarelli closed Caruso’s Italian restaurant for the last time on Sunday, a much-loved restaurant he has run with his wife Kerrin in Gymea, New South Wales, for the past five years.
Rocky Pitarelli (pictured with controversial neurosurgeon Charlie Teo) has criticized Prime Minister Anthony Albanese for not showing enough love to the small businessman.
Pitarelli’s expenses have skyrocketed in recent months
Rocky Pitarelli (pictured) addressing diners at his now closed Caruso’s Italian restaurant.
“It doesn’t matter which way it goes, they are asking for more money,” he told Daily Mail Australia.
‘Chicken cost $9.80 a kilo three months ago, now it costs $11.50. An oil drum used to cost $40, now it costs $85.
“French fries, humble French fries, used to cost us $20 a box, now we’re at $67.
‘Utilities cost us $500 a month; now it is $700 and today they say it will be another 20 percent.
There is no regulation. Everyone is taking care of their own pockets.
Pitarelli, 50, criticized Prime Minister Anthony Albanese for not helping small businesses.
Has this guy ever been in the field? he said.
“It seems like he’s always on vacation forgetting about the nation and more concerned with making love to the world than helping the small business owner.”
He added: ‘What happened to us all being in this together? There was so much Kumbaya love during Covid – “we’ve got your little business back, we’re here for you”. And it was true.
‘With Gladys and ScoMo I felt loved. But you can’t offer a branch and get it back in a year.
Piatrelli, which was packed for its last weekend, also reserved its ire for consumers who seemed to prefer spending money at the big chains.
“It’s a sad truth,” he said. “We’ve all gotten really lazy and we seem to have forgotten about mom and dad’s operator.”
Narelle Lucas (pictured) is closing her Wild Earth Mother artisan shop, which supplied 20 local producers in the small Victorian town of Yarram.
Jenny Hyde, 59, opened 32 Below coffee shop and ice cream parlor in Smithton, Tasmania, six months ago.
But she’s closing the doors for good because of skyrocketing costs.
“Rising energy costs and staff salaries have really hit us,” he told Daily Mail Australia.
“I was still working part-time as a nurse (day, night, night shifts) so I could pay the bill and keep it afloat.”
‘The days that I was not working in the hospital I was in the store. I’ve been doing it for six months and I’ve taken it straight, but I’m not ready to do it anymore.’
Ms Hyde, who employed three staff members, criticized the lack of government help for small business owners.
“You have to have six months of negotiation to get help from them and holding out for that long just killed me,” he said.
‘People stay at home more. They used to go out as a gift because they could, but now it’s a luxury.
She added: ‘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 café owner even sold his house in a desperate attempt to keep his business afloat.
Bailey Walters, who was voted Young Achiever of the Year at the Restaurant and Catering Industry Association awards last year, was forced to sell off his cafe, Caleo, in Warners Bay, New South Wales last week.
In a heartfelt Facebook post, he apologized to the staff and vendors who ran out of money.
“I thought I could save the business by selling my house and putting the money into the business,” he wrote.
‘I was working 100+ hour weeks (without pay) behind the scenes to do everything I could to get us out of this mess, but Caleo didn’t save, simply put, the money just wasn’t coming in and the bills just wouldn’t stop.
Daily Mail Australia has reached out to Mr Walters for comment.
Darren Collier (pictured) made the decision to close his SpitJack restaurant in Melbourne because he “don’t really see things getting better”.
In Melbourne, Darren Collier made the difficult decision to close his fire-based flatbread restaurant, SpitJack, just over a year after opening.
“We could keep going, but with the recession, rising inflation and rising interest rates, we’ve already seen a leveling off of diners,” he said.
“With everything culminating in a perfect storm, it turned out to be more difficult than we expected. We’re nowhere near where we wanted to be and we really can’t see things getting better for us in the coming year.’
The restaurant, which employed as many as 12 people at its busiest, was hit by energy costs and wage increases.
“In a tough and tight industry with very small margins, electric bills and salary increases also have a significant impact,” he said.
Collier said a “cultural shift” was required for consumers to accept that they had to pay more for food.
“It’s just not sustainable for a lot of companies right now unless you have a lot of volume,” he said.
Belinda Rodwell, owner of Bell’s Kitchen & Takeaway in Vincent, Queensland, was also forced to close two weeks ago.
“I was paying $1,600 a month for rent and electricity,” he said.
You’d expect to pay that in a strip mall, not a little cafe on Vincent.
Ms. Rodwell, 47, gave away up to 50 free meals a day to the homeless and also provided the candy store for the local school.
As he struggled to keep the cafe open, his car was stolen and he was also diagnosed with heart failure and given only five years to live by doctors.
At one point, she worried that she couldn’t afford her medication, which costs $200 a month.
“As long as I was working and serving community members, I was fine,” he said.
“But overhead was out of control and we had no choice but to shut down,” he said.
32 Below, an ice cream parlor and cafe in Smithton, Tasmania, has closed after just six months.
Elsewhere, small shops are closing due to lack of demand and rising bills.
Narelle Lucas, 49, runs a local produce shop called Wild Earth Mother that sells artisan foods and drinks in Yarram, Victoria, a city with a population of just 2,000.
But you’re shutting it down after your customers just ‘disappeared’.
“They abandoned every interest rate hike,” he said. ‘And then in January, what used to deliver in a day was delivering less than that in a week. People just don’t have money to spend on luxuries.
Mrs. Lucas’s store supplied another 20 local producers.
“The closure of my shop will affect the lady who makes the cakes, the two cheesemakers, the butcher who makes the small products,” he said.
“All these people are losing all that money from me every week.”
“We’ve really tried to hold on, but it’s not going to get better anytime soon, it’s just going backwards.” This is just our small town, but this is going to happen to every small town in Australia.”
Yarram, which has a population of just over 2,000, is also losing its bookstore because it can’t make ends meet.
Ms Lucas criticized government schemes aimed at helping local businesses.
‘Being an artisan business, I can apply for farm subsidies and so can many of the growers I buy from. But they are very hard to get, actually you have to pay all the money in advance. Let’s say your application is for $20,000 and the government will give you 50 percent back, you first need to find that $20,000.
“If small businesses had $20,000, they wouldn’t be asking for government grants.”
Suresh Manickam, chief executive of the Restaurant and 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 moms 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 fight to break even or pass these higher costs on by increasing menu prices. Higher menu prices are the inevitable consequence of inflationary pressures facing small businesses.’
Power bills have skyrocketed across the country, with more than half a million Australian homes facing another rise of at least 20 per cent this winter.