Breakfast burger bar chain Cheffy Chelby’s to close last two restaurants amid SA hospo crisis

A leading restaurateur has revealed why she’s shutting up shop – and has lifted the lid on what the actual price of making a coffee is for a business.

The owner of an award-winning chain of breakfast burger bars will shut down its remaining two restaurants at the end of the week, blaming rising costs and customers’ reticence to spend as inflation crunches hit.

Cheffy Chelby’s at Morphett Vale and Hallett Cove will close its doors on Sunday, just over a year after devastated owner-operator Michelle Lowe was forced to pull the pin on her flagship Port Noarlunga eatery. The building it was located in was declared derelict and unsafe by the local council in February 2023.

Ms Lowe said customers simply weren’t spending as much money as in the past – and the figures no longer added up, with soaring food costs meaning a small coffee should practically cost up to $8.

“Wages went up massively last year, our rent’s gone up, insurance has gone up, the cost of goods has gone up ... as a whole our customers are just not coming and spending as much money and that’s totally understandable with their cost of living going up,” she said.

“We tried not to (pass on costs) ... most recently we looked over what a small cup of coffee should be costing and Adelaide really should be charging about $8 for a small coffee.”

Ms Lowe, who launched her first venue in 2020, said the business never really recovered after she was given just 24 hours to evacuate the Saltfleet St premises, which she had poured thousands of dollars into.

“I’ve taken too many hits. It’s like I’m playing Mortal Kombat and I keep getting killed,” said Ms Lowe, a chef, who launched the business after losing her job at the start of the pandemic.

“My rent has gone up, the cost of food has gone up, wages and energy are up.

“I’ve fought and fought and fought and I don’t have the energy anymore. I’m devastated that I’ve put so much work into this but you can’t control everything. It is what it is.”

Michelle Lowe in 2020 at the original Cheffy Chelby in Port Noarlunga. Picture: Tom Huntley

Ms Lowe, 36, said the hospitality industry was becoming increasingly difficult, and growing numbers of owner-operators were being forced to work long hours in all aspects of the business to keep expenses down.

“Every person I know in the industry is owner-operating and doing everything. They work in the business during the day then work on the business at night.

“They are suffering so much, they can’t afford a work-life balance. It’s going to kill people going forward.”

The Port Noarlunga store had been a great success, and was crowned SA’s Best Burger Café in the 2020 Restaurant and Catering awards. But the building had to be demolished at short notice, which came after months of requests from Ms Lowe to repair the roof following storm damage in 2022.

Ms Lowe failed to receive any compensation after a clause was found in her lease stipulating that the building’s owner did not have to guarantee it was “fit for occupancy”.

“Why is it okay to include a clause that states that an owner doesn’t need to guarantee that a building is fit for occupancy?” said Ms Lowe, who was named Young Achiever of the Year in 2022.

“Who is it in council who maintains and monitors the safety and structural integrity of commercial buildings, especially those … that had reported faults. Who is liable here for my loss?”

Cheffy Chelby was crowned SA’s Best Burger Café in the 2020 Restaurant and Catering awards. Picture: Tom Huntley

She also said she was given legal advice to open a new Cheffy Chelby’s restaurant to help her claims to compensation following the demise of the Port Noarlunga business.

As a result, Ms Lowe opened a new eatery at Christies Beach in April 2023 but it struggled and she eventually closed it in February this year.

Her financial troubles were also exacerbated by a decision to sign a lease in 2022 for a fourth Cheffy Chelby’s at Hallett Cove Shopping Centre, prior to her eviction from the Port Noarlunga store.

Ms Lowe said she was given no choice but to go ahead with the project despite significant losses incurred by the closure of the flagship eatery.

This year, she tried to restructure the business but a debt consultant told her she couldn’t trade out of her position and closing her remaining Cheffy Chelby restaurants was her only course of action.

“Hospitality has always been a passion of mine but it seems that during and after Covid, it is even harder,” said Ms Lowe, who is helping her 16 staff find new employment.

“You have to love it to continue and I sold my house to undertake this project. It’s a shame it has come to this after the poor advice provided to me from a series of paid professionals.

“But I honestly think it’s going to get harder for hospitality in coming years.”

A long list of SA businesses have closed or are set to close in coming weeks, as the cost of living crisis takes hold and the ripple effect of Covid continues.

Most recently, acclaimed Italian restaurant Martini on the Parade announced it will close its doors for the final time on Mother’s Day.

Highly-rated Adelaide restaurant Umaii also closed suddenly on Saturday night.

Other hospitality businesses to shut down in recent months include Hog’s Breath Cafe Glenelg, Cardone’s on Jetty Rd, Glenelg, Little Banksia Tree in Bowden, Gouger St’s Super Bueno, cult Hills pizza restaurant Lost In A Forest, Folklore Cafe in Port Adelaide, Morris Bakery on the Limestone Coast, plus a host of Adelaide nightspots.

Earlier this month, Terroir Auburn in the Clare Valley also announced they were closing at the end of May.

Chinatown stalwart Kim Wang Supermarket is also clearing its shelves over the next few weeks, to the devastation of loyal customers, with plans to shut at the end of this month.

Michelle Lowe in 2020 at the original Cheffy Chelby in Port Noarlunga. Picture: Tom Huntley.