Popular Aussie restaurants fold as crushing operating costs wreak havoc

Customers left devastated after hugely popular Aussie restaurants suddenly fold amid the nation’s crippling cost of living crisis.

Bleak post-Covid economic conditions have continued to wreak havoc on the hospitality sector, with another two formerly bustling establishments being forced into closure.

Popular South Australian eatery, Seed Clare Valley, this week informed customers it had gone under and would be ceasing trade “effective immediately”.

It was a similar story up north on Queensland’s Gold Coast where La Diosa Mexicana, located inside the busy Circle on Cavill Shopping Centre, had no choice but to close its doors.

Devastated former clientele were shocked at the sudden announcement, made to the business’s Facebook page on Thursday, and described the restaurant as having the best Mexican food in town.

“The best Mexican restaurant by far! Really sad you guys have closed. We’ve spent many a night celebrating there,” an upset former diner said in a comment.

“So sad, best Mexican food ever. All the best to owners and staff,” another said.

In South Australia, the owners of Seed Clare Valley attributed the closure to enduring a raft of unexpected challenges, including the effects of recent skyrocketing inflation.

Seed Clare Valley announced this week that it had been forced to close down. Picture: Seed Clare Valley

“Dear Seed supporters, we deeply regret to inform you that Seed Clare Valley will be ceasing trade, effective immediately, and has entered into voluntary liquidation,” a post to its Facebook read.

“Opening a new venue is always a huge undertaking – however, as it did for so many businesses, Covid presented us with a raft of challenges we could never have anticipated.”

They added that pressures from Covid had been worsened by increased operating costs and issues with staffing.

“Unfortunately, these challenges have also recently been compounded by increased operational costs and overheads, plus a regional staffing shortage, and have contributed to the difficult decision we have had to make today,” they wrote.

“We are incredibly thankful for the support of all our customers and staff over the past nine years, and we appreciate your understanding during this time. Please note that any further updates to trade will be made available via our social media and website.”

The business first opened in 2014 and underwent a renovation in 2021 which included the addition of a bistro, deli and rooftop bar.

Diners expressed their devastation after hearing the popular eatery closed down. Picture: Seed Clare Valley

Hundreds of diners expressed their sadness over the closure of the business, which many said had placed the region on the map for tourists.

“You really helped put Clare further onto the tourist map. We wish you all the best in the coming months. Thanks for the many wonderful memories,” a comment from a local real estate agent read.

“You have done so very much for the Valley and created such an amazing restaurant over the years. We have celebrated so many milestones there with our family and friends and thank you all so very much,” another person wrote.

Sadly, the two closures are far from isolated cases, with well-documented financial pressures placing insurmountable strain on establishments across the country.

Another recent victim was Caruso’s Italian Restaurant in Gymea in Sydney’s Sutherland Shire, which was crippled beyond recovery by operating costs, closing its doors earlier this month.

On the city’s Northern Beaches, Manly’s Jellyfish Cafe has also suffered the same fate, shutting down last week after almost two decades of operation.

The company has been handed over to liquidators HoganSprowles after a verbal report earlier in March “proved” the cafe should be “wound up”.

Gold Coast’s ‘best’ Mexican business La Diosa Mexicana had to shut down. Picture: La Diosa Mexicana

The upsetting streak of closures comes after a devastating analysis from The Australia Institute last month found excessive corporate profits – and not Australian wages – were behind Australia’s skyrocketing cost of living, described as the “profit-price spiral”.

It found inflation would have stayed within the RBA’s target if companies had not squeezed consumers through the pandemic with excess price hikes and “gouging”.

But instead, the RBA has focused on a “wage-price spiral” which director Dr Jim Stanford said did not actually exist, arguing that the pressure placed on Australians to have their essentially have their wages reduced was “misplaced and unfair”.

Citing a recent Finder survey which found 51 per cent of Aussies attempting to cut back on spending were reducing their dining and drinking out habits, while 36 per cent were limiting how often they go to events such as to the movies, sporting games and concerts, CreditorWatch chief economist Anneke Thompson said it “emphasises the risk of this sector, as business owners will now not only be grappling with high costs, wages, interest payments and rents, but also lower demand”.