Soaring costs claims another popular eatery which despite popularity
Soaring costs have claimed another popular eatery which has shut down one of its stores due to the tough economic climate.
Skyrocketing costs have claimed another popular eatery which has been forced to make the tough decision to shut its doors.
Abbots and Kinney, a “cult” bakery and cafe with stores across Adelaide, made the decision to close its Croydon store as the lease was about to expire.
Managing director Richard Wilson made the announcement on social media thanking the community.
“You have been so kind to us over the past years, but unfortunately our time here has come to an end,” he said.
“Leases expiring and prices increasing, it’s something we’re hearing more and more often these days with lots of businesses being forced to make tough decisions.”
CreditorWatch revealed hospitality businesses operating in food and beverages were most vulnerable to current economic conditions by a significant margin over other industries.
It predicted that 7.45 per cent of hospitality businesses could fail over the coming year.
Businesses were being challenged by consumer spending, as cost-of-living pressures saw consumers be more cautious about discretionary spending.
Power prices, food costs and labour shortages were other factors putting pressure on the hospitality sector.
CreditorWatch chief economist Anneke Thompson said a small fall in spending in the cafe, food and takeaway sector would compound already very difficult conditions for cafe and restaurant owners.
“This sector already has the highest rate of business insolvencies, and we expect insolvency rates to continue to rise as long as interest rates remain at their current levels,” she said.
CreditorWatch chief executive officer Patrick Coghlan said the unfortunate fact was the conditions would get worse for businesses in the hospitality sector before they got better.
“The outlook for hospitality businesses is not likely to improve until we see a lift in consumer spending,” he said.
“And that is not going to happen until the impacts of one or two rate cuts filter through to households. We don’t anticipate that being felt until at least the second half of next year.”
The bakery’s announcement is one of multiple businesses that have closed or changed their operating model around the country, despite their popularity.
The news comes after Adelaide pizza chain Hey Bianca quietly shut its stores and online delivery service with the business now marked “permanently closed” on Google.
Another independent pizza chain in Tasmania Wiseguise recently closed two of its stores in regional areas due to “incredibly tough economic conditions” and rising costs.
Slate Cafe in Perth were forced to close its doors citing rising operational costs had made it challenging to continue operating in the current climate.
In Sydney, restaurants Redbird and Tequila Daisy announced their closures in May and a bakery chain in Brisbane announced it would stop selling sanwiches to cutback on “skyrocketing” costs.
According to Restaurant and Catering Australia chief executive officer Suresh Manickam, restaurants were being pushed to the brink as costs increased and consumers spent more cautiously.
He told Bloomberg that almost every single input then went into doing business was rising.
“There are multiple challenges at the moment,” he said.