‘Simply not profitable’: Beloved cafe to close

A favourite Sydney cafe has revealed it will close after 12 years in business, with the owner describing the hospitality industry as “a bit broken”.

A favourite Sydney cafe has revealed it will close at the end of February after its owner described the hospitality industry as “a bit broken”.

A popular cafe in Sydney’s inner west has revealed it will permanently close at the end of February after its owner described the hospitality industry as “a bit broken”.

Alex Elliot-Howery, who owns the Cornersmith cafe in Annandale with her husband, James Grant, told The Sydney Morning Heraldthe site would be shutting because the venue “is simply not profitable”.

“I think hospitality is a bit broken,” Ms Elliot-Howery said.

Cornersmith cafe is an institution in Sydney’s inner west.

Rising costs have put pressure on the business but Ms Elliot-Howery said she has been reluctant to raise prices due to the cost-of-living crisis.

“People want coffee and they want a breakfast they can afford, which I totally understand because I’m that person too,” she said.

“But the reality is, you can’t really make money from what you used to be able to make money on.”

Alex Elliott-Howery said Cornersmith was shutting as it is “simply not profitable”. Picture: AAP Image/ Monique Harmer.

Ms Elliot-Howery said the business had been in “survival mode” since Covid.

“Every week it has felt harder and harder to make the right decisions, to keep our customers happy, stay creative and have the environmental focus that has always been fundamental for us.”

Cornersmith first opened in 2011 in the inner west Sydney suburb of Marrickville, now a popular hipster hub but back then a sleeping giant.

In 2016, a second cafe opened in Annandale, and in 2019 the Marrickville location closed.

The number of food and beverage services in external administration is now above pre-Covid levels. Picture: CreditorWatch

According to data from CreditorWatch, the number of food and beverage services in external administration is now above pre-Covid levels, after climbing steadily for most of 2023.

Food and beverage businesses also failed at a higher rate than any other industry in January 2024.

December’s retail trade figures from the Australian Bureau of Statistics showed that trading for cafes, restaurants and takeaway businesses fell in December, a typically strong month that many businesses count on to sustain them during quieter times of the year.

Food and beverage businesses also failed at a higher rate than any other industry in January 2024. Picture: CreditorWatch.

Ms Elliot-Howery agreed that it has become almost impossible to run a profitable hospitality business.

“Unless you’re a tiny little shop with barely any staff or you are part of a bigger restaurant group, I don’t know how anyone survives,” she said.

“What I worry about is that we are losing diversity in the industry.

“It felt like you used to be able to have a nice life from that, whereas I don’t believe it’s possible any more.”

She said the cafe could look to cut costs but was unwilling to compromise on its quality.

“We don’t want to cut corners; we don’t want to be the cheapest offering because I know what that means for our food system on a bigger scale.

“I literally wouldn’t be able to sleep at night if we used factory chickens or didn’t pay our staff properly.”

She said a new cafe would open at the Annandale site after Cornersmith closes and assured its fans the Cornersmith business would continue in some format.

“It’s a huge change for us to no longer have bricks and mortar, but Cornersmith will still exist in some form and I will still be teaching cooking classes,” Ms Elliot-Howery said.

“We’re trying to now figure out what we do with this brand that we built.”

The company has announced the news on its website.

In a statement on the Cornersmith website, Ms Elliot-Howery said she would continue to teach cooking classes and the company was “making plans with what to do with our much-loved pickles and preserves range”.

“It seems impossible to do the right thing environmentally, keep customers happy and stay independent and afloat financially,” the statement said.

“We tried bloody hard and while our passion and purpose hasn’t changed, our bodies, brains and bank balances are a bit exhausted.”

Customers took to social media to express their dismay at the beloved cafe closing.

“Really sorry to see you go. You’ve been one of the true highlights of our little neighbourhood,” one said.

“Huge loss for the Inner west, completely agree with you about how impossible it is to make hospo work these days,” wrote another.