Kaffana closure follows ‘perfect storm’ of high rents and wages, and coronavirus
A “perfect storm” of intense competition, high wages and the coronavirus shutdown has been blamed for the demise of once popular CBD restaurant and bar Kaffana.
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Family-run CBD restaurant Kaffana has come to an end, with a “perfect storm” of intense competition, high wages and the coronavirus blamed for the demise of the once popular eatery.
Liquidators have been appointed to wind up the company operating the Serbian-influenced venue, which has been run by the Vujic family since 2014.
In 2017, the restaurant relocated from its first home on Peel St to larger premises around the corner on Gilbert Place.
Co-owner Predrag Vujic said the move coincided with a major downturn in the local dining industry.
“When we moved from Peel St to Gilbert Place it had an instant impact on the numbers coming through,” he said.
“High wages, high rents, the downturn in business and the coronavirus was the perfect storm that tipped everything over.
“It really hurts to be in this position, not just for me but for my staff as well.”
Kaffana’s winding up was prompted by an unpaid debt to Return to Work SA.
Mr Vujic said the coronavirus shutdown meant the business was unable to raise the funds to satisfy the $13,000 debt.
Close to 15 full-time and part-time staff are affected by the restaurant closure, which follows the collapse of the King’s Head pub last week.
Mr Vujic said there were signs of a recovery for the business in the months before the coronavirus hit, but that came to an end when the Fringe festival arrived.
“You have an OK December and January and then the Fringe comes along – the east end makes money and the west end dies,” he said.
“Turnover’s down 30, 35 or 40 per cent and then this (coronavirus) happens.”
Kaffana joined Adelaide’s small bar and dining scene in 2014, serving traditional Serbian food including chargrilled meats.
The Vujic family had previously run the Zorro’s charcoal grill restaurant in Hahndorf.
Following Kaffana’s move to Gilbert Place, the family opened a sister restaurant, Sestra, in the vacated Peel St space.
Mr Vujic said brother Nick and other family members would continue to serve takeaway from Sestra with a view to reopening once coronavirus restrictions eased.
“We haven’t received any government grants or handouts – my family has no money so they still need to keep trading through takeaway,” he said.
“It’s devastating because I wanted the best, and I’ve put so much money into it, and my family has put money in over the years.
“They want to keep going but I’m done – I’ve had enough of the hospitality industry.”
Mr Vujic expects other city restaurants to suffer a similar fate to Kaffana in the coming months.
“Competition is intense at the moment and that’s fine, but you’ve seen the amount of bars that have opened and closed in the past seven years or so,” he said.
“The competition is all going to dissipate – we’re out of business and others will fall out as well. Hopefully the ones that are left will thrive.”