Original Pancake Kitchen closes Reynella, Port Adelaide diners

Jobs will go as iconic Adelaide diner Original Pancake Kitchen closes two of its venues amid soaring energy costs – and a devastating kitchen fire.

Adelaide institution Original Pancake Kitchen has closed the doors at two of its venues, but its iconic Adelaide CBD diner will live on.

A fire last month in its Reynella kitchen and soaring energy costs have been blamed for the closures at Reynella and Port Adelaide, with liquidators appointed to wind up those two venues.

Three other sites in the CBD, Marion and Modbury will continue to trade.

The Original Pancake Kitchen chain has been operated by director Mark Sandgren, who took over the original Gilbert Place diner in 2017.

He expanded into the suburbs in 2019 with a second outlet in Modbury, followed by the Reynella and Port Adelaide openings in 2020. A fifth outlet in Marion opened in September.

Mr Sandgren said Covid hit the business hard, and it was forced to borrow money just to stay afloat.

“People deserted the CBD but when restrictions eased we found they were supporting local venues which is why we were confident in our expansion into the suburbs,” he said.

“Post-Covid, the cost of doing business has gone through the roof. Our gas bill has almost tripled from $5000 a quarter to $14,000.

Pancake Kitchen director Mark Sandgren with liquidator Dominic Cantone. Picture: John Kruger

“Interest rate hikes mean many families think twice before going out to eat and we’ve suffered a decline in customers. More people are staying home and cooking comfort food such as pancakes themselves.”

The fire that tore through the kitchen at Reynella last month caused about $100,000 worth of damage.

Oracle Insolvency Services partner Dominic Cantone, who has been appointed to liquidate the two restaurants, said many hospitality businesses were struggling under the increasing pressure of rising utility bills.

“We are all paying more for electricity and gas but it’s particularly tough for restaurants and cafes,” he said.

“If you can’t reduce costs, then inevitably you have to pass them on to survive by increasing the price of items on your menu. We don’t have to go out to eat, and if your customers are also having to pay more to run their households it’s a discretionary expense that’s the first to be cut when budgets are tightened.”

Mr Cantone said the debts of the two closed venues would likely exceed $250,000, with the ATO the main creditor.

Pancake Kitchen owner Mark Sandgren with general manager Josh Whitford outside the CBD venue in 2020, at the height of Covid lockdowns. Picture: Mark Brake

Some suppliers are also owed money, while about 30 workers have lost their jobs but have had their entitlements paid.

“We believe we’ll see more restaurants and cafes driven to the brink and beyond as they struggle to recover from the economic effects of Covid in an environment of rising costs,” Mr Cantone said.

The Original Pancake Kitchen dates back to 1965, and Mr Sandgren is hopeful the original diner in Adelaide’s West End can survive the current challenges.

“Just about everyone I’ve met in Adelaide has a memory of eating at the Gilbert Place diner,” he said.

“It is still open 24/7 and I hope with the support of South Australians that will continue.”