‘To the wall’: Iconic Sydney restaurant falls victim to cost of living crisis and corporate greed

An iconic Sydney restaurant has just closed for good – and it exposes a major crisis devastating the nation that nobody can escape from.

A devastated small business owner who was forced to close his beloved pizza restaurant due to the cost of living crisis has accused greedy corporations of running everyday Aussies into the ground in the brutal pursuit of excessive profits.

Rocky Pitarelli and his wife Kerrin have owned local institution Caruso’s Italian Restaurant in Gymea in Sydney’s Sutherland Shire for five years, with Mr Pitarelli previously working as the eatery’s head chef under the last owners for around 12 years.

It was a job they loved for “every minute of every day” – but last weekend, the restaurant’s doors were finally closed for good after the couple found they could no longer survive the impact of skyrocketing costs month after month.

He told news.com.au the cost of essential supplies such as fresh produce had become “unbearable” due to extreme weather events destroying crops as well as soaring shipping costs and inflation more generally.

Rocky Pitarelli pictured with Dr Charlie Teo at Caruso’s. Picture: Facebook

At the same time, he has been slugged with monthly interest rate rises and exploding fuel and power costs, with Mr Pitarelli's electricity bills recently jumping from $300 a month to $504, then to $700, and finally to $840 after the latest 20 per cent rise – even after doing everything he could to cut costs and boost efficiency, such as installing LED lighting and fairy lights in the venue.

“It’s tough – you put your life into one venue, and the end result, what you have to show for it, is nothing,” Mr Pitarelli said.

“It’s an honour to have celebrations in your venue – families have made you part of their lives and they trust you with that christening, birthday party, engagement – those milestone celebrations.

“We are paying the price on the exit, mentally, physically, emotionally – we’re exhausted. But you know when it’s time to pull the pin because you can’t keep going.”

Mr Pitarelli said it was unconscionable for huge corporations such as the major banks and supermarket giants to be pulling in record profits in the billions at a time when the country was on the brink of a recession with countless small business owners facing ruin under a “constant barrage of bills”.

“Everything is becoming unaffordable and the only people making money are the big companies like Coles and Woolies. They’ve got the buying power, but mum and dad operations are just forgotten by this nation. We rely on consumer support, but they don’t have any money either. Everyone has second jobs now,” he said.

The restaurant has been a local icon for many years. Picture: Facebook

“There’s just no relief from the pressure, and everyone seems to be looking at the bottom line – we’ve forgotten there’s a human face behind the bank balance on the spreadsheet.

“It’s a domino effect with many pressures from every angle. George coming into my restaurant can’t pay $35 for a pizza when they are $15 from Domino’s or $25 from Crust – so we’re becoming more of a corporate society … everything is designed for the bigger guys, because they’ve got the power, and we’re just being squashed.”

The father of one said he believed the country was headed for an economic “dictatorship” where huge corporations dominated with family businesses – which he described as “the backbone of our democracy” – dying out one by one.

He pointed out that while he was “a victim of circumstance”, he was far form alone, with countless other small businesses being pushed to the breaking point.

“To reduce inflation, people have got to be out of work, the unemployment rate needs to rise and businesses need to go broke. The only way it will stop is when people lose jobs,” he said.

“There’s no human feeling about it anymore, it’s all dollars and cents, and at the end of the day, the buck stops with the poor guy at the end of the tail trying to get to the top of the head.

“As a country we need to start asking why – why is this happening? Why do banks need to make $20 billion a year? Why do electricity companies need to make another 20 per cent – especially when it’s sending people to the wall?”

He said it was time for an honest conversation and for the voice of the people to be heard before it’s too late.

“It’s like we are in the Hunger Games. The basics of life have become unaffordable. Grocery bills – you burn through $100 for two packets of TimTams just about, and if you get petrol, it’s $50 to $100. It seems to be a 50 per cent price increase for every person to live in this country, and who suffers the most? The kids … it’s sending us desperate,” he said.

“It’s not just one problem, and unfortunately in this day and age there’s no real answer until we as a nation decide enough is enough.”

In recent months, rising costs have become ‘unbearable’. Picture: Facebook

Meanwhile, Mr Pitarelli said there were ways the government could help those struggling, including simply listening to the concerns of small business owners, as well as demanding answers from the big end of town.

“When electricity prices keep going up, maybe they need to be held accountable to the Australian public. What changes in their business to say we need this price increase?” he said. “As a small business, if we put the price of pizza up $5, we have to stand there and justify it to the customer, because they will ask. But when a larger company says there’s an extra 20 per cent on electricity bills, the public can just like it or lump it.

“That’s where the government can help.”

He added that giving small businesses extra time to prepare and adapt to price rises would also help, given the unique challenges they faced.

“Corporate Australia has a billion in the bank so when the bank raises the price one day, it’s implemented the next, because they have the systems and structure in place,” he explained.

“But when you’re cooking in the kitchen, doing the accounts, ordering food, picking up supplies and cleaning, you’re stretched for time. I need at least three months to work out a way to get through the next impact coming at me, and it’s month after month – where is the cap? When do they say they’ve done enough?”

He also suggested shorter terms for Reserve Bank governors in order to inject “fresh blood” and ideas into the central bank.

“I can’t say it enough – small business needs help. At the present moment, too many people are making decisions without any consequences and they don’t have to justify it to anybody – the poor guy at the end just has to find the money, and that’s the end of it,” he said, describing Australia’s current economic situation as “a mess”.

Despite his “devastation”, Mr Pitarelli thanked the community for its years of support, and said he hadn’t ruled out opening another Caruso’s in future.

“Goodbye is sad, but we’ve also got hello – hello to life, hello new adventure. We may open another Caruso’s down the track – our community well and truly stated the case last week on why we should do it but again, it comes down to dollars and cents,” he said.

“Thank you everyone who shopped at our business over the last five years. It’s quite humbling to feel the genuine love.”

Small business owners are now living through a Hunger Games scenario as they fight to survive another day. Picture: Facebook

Australia’s shameful ‘profit-price spiral’

Mr Pitarelli’s concerns were echoed by a devastating analysis from The Australia Institute last month, which found excessive corporate profits – and not Australian wages – were behind our 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 via 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 essentially cop a pay decrease was “misplaced and unfair”.

The findings were released in the same week Qantas announced a $1.4 billion profit, supermarket giant Woolworths revealed a $907 million profit – up by 14 per cent – and fellow grocery juggernaut Coles revealed a $643 million profit, which grew by 17.1 per cent.

It also came hot on the heels of the Commonwealth Bank’s recently reported record $5.15 billion in profit – up by 9 per cent.

‘Big squeeze’ ruining businesses

Meanwhile, digital credit reporting agency CreditorWatch recently released its latest Business Risk Index, revealing there was a “big squeeze” from rising costs and falling demand pressuring countless businesses.

CreditorWatch chief economist Anneke Thompson also confirmed there was a “higher risk of insolvency for sectors reliant on discretionary spending, with the food and beverage sector topping the list of riskiest sectors at a 7.3 per cent probability of default”.

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, Ms 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”.