Shutting his restaurant will cost Malcolm Stewart $6000 a month in rent, but the loss is not as much as it would be if he had the doors open.
Mr Stewart said he and his wife were putting $25,000 to $30,000 a month into keeping the Corner Pocket Bar and Grill at Caloundra open.
“Losing $6000 a month is better than losing $30,000 a month,” Mr Stewart said.
This is the second part of a Sunshine Coast News series on the local hospitality industry and its future. Read part one here.
Pum’s Kitchen at Maroochydore has also closed to diners, although owners Chris Pyatt and his wife, Pum, will continue selling takeaway meals and making and selling ready-made meals that are stocked in IGA stores.
At least four eateries – Apero, JD’s Chicken Co, Frenchies Brasserie and Eclipse – also closed at Tewantin and Noosaville last month.
Both Mr Stewart and Mr Pyatt said interest rates, the cost of living and high costs were making it difficult for cafes and restaurants to turn a profit.
They predicted more Sunshine Coast restaurants would close in the next six months if the economy did not lift dramatically.
“I know of at least seven or eight that are going from week to week,” Mr Stewart said.
“There’s going to be a lot of people get hurt in a big way in this one.”
Mr Stewart said running the restaurant had become harder and harder as interest rates rose.
“When they started putting up interest rates in 2022, in the first seven months it wasn’t too bad, but in the following few years I did about 40, 50, 60 per cent of my sales, and then it just wasn’t worth having the doors open,” he said.
“What I was taking a month, it wasn’t half what I was taking in the first year.”
Mr Pyatt said diners who used to order an entree, main and two glasses of wine had pulled back to sharing a plate and having only one glass or none.
He said interest rate rises and high rents had eaten too far into people’s budgets, while federal policies hit people at the lower end of the income scale.
“The people are losing their businesses and houses and things like that,” he said.
Mr Stewart and Mr Pyatt said costs had risen in comparison to dwindling takings.
The high price of staff was a particular concern, with them paying teenagers $31 an hour or even more with penalty rates to carry plates and pick up empty glasses.
Mr Pyatt said on a recent night the wages bill was $400 when there had only been $250-$300 of orders.
“There’s nothing left for us. There’s not enough money to pay the rent – that’s $1200 a week – (and) electricity,” he said.
“Our wages bill last year was $90,000. Pum and I took home less than $60,000.”
During Covid, Mr Pyatt and his wife set up a successful sideline making ready-made take-home meals that are sold through IGA stores, but he said those sales had also begun to tremble.
“When I hear the Reserve Bank say, ‘We know people are losing income, we know that some people are going to have to sell their homes,’ the reality is that their best chance of keeping a roof over their head will be to rent back the house they sell. That needs to stop,” he said.
Mr Pyatt said he and Pum would continue to make and sell takeaway and take-home meals with a view to reopening Pum’s Kitchen to diners if and when conditions improved.
“We’ll see how it goes. Hopefully, people will come in and buy takeaway and we’ll stay afloat,” he said.
Mr Stewart, who has owned the Corner Pocket Bar and Grill for almost two-and-a-half years of its eight years, plans to return to FIFO mine rehabilitation work to cover the rent on the restaurant so he can sell “at the right price”, or until interest rates ease back and he can reopen the doors.
