The bad news is still coming, just now, the Australian Bureau of Statistics officially announced the blockbuster data!
In addition, the Australian Securities and Investments Commission (ASIC) has also released an update on data:
The number of business failures in Australia has soared to an 11-year high, the construction and catering industries have become the "hardest hit areas", and companies that are applying for bankruptcy proceedings in court have "long queues"...
01 ASIC's latest data released: the number of Australian business failures has soared to the highest level in 11 years...
A few days ago, the Australian Securities and Investments Commission (ASIC) released an update on data:
The number of business failures in Australia
has soared to an 11-year high,
The construction and catering industry has been the hardest hit...
According to the report, in the nine months from the beginning of July 2023 to the end of March 2024, a total of Australian companies entered into receivership, an increase of 36.2% over the previous same period.
Among them, the catering industry accounted for 15.2%,
The construction sector accounted for 27.7%,
It is the hardest hit area in this wave of closures!
According to the report, this number will break through the 10,000 mark by the end of the fiscal year (June 30, 2024)!
In addition to the catering industry and the construction industry, other industries have also received a strong impact.
So much so that the number of businesses that are applying for court closure proceedings
It's already tripled!
The main culprits of the current situation are still high interest rates and inflation...
Just now, the Australian Bureau of Statistics released the CPI (inflation data) for the first quarter, and this result is what everyone does not want to see:
Australia's CPI in the first quarter of this year was significantly higher than the market's expectation of 0.8%.
In terms of annualization, Australia's CPI in the past 12 months has decreased from 4.1% in the previous same period, but it still exceeds market expectations...
In other words, the problem of inflation in Australia still exists.
And it's worse than expected...
02 Australian restaurants frequently close down, and the Chinese boss's admitting that "business is difficult to do" resonates...
Not long ago, Checho's, a Mexican restaurant in Penrith, Sydney, announced that it had begun to liquidate due to the poor operating environment in the restaurant industry.
"We are sorry to inform you that Checho's on High St is closing, we have spent an incredible 4 years in this community hub, and we are so grateful for the support from our loyal customers...
It's really a very difficult time for the restaurant industry and we hope that everyone will continue to support local restaurants, cafes and bars.
Too many businesses have been hurt and they wouldn't have been able to get through this without you..."
Just last month, Brenton Nisbet, a bar owner in Sydney, made a calculation and revealed the reasons for the frequent closures of restaurants -
And not just because of inflation!
According to Brenton, his store has been open for three years, and in addition to facing inflation, there are a series of rising costs to run the store, including staff salaries, government licensing fees, food safety inspection fees, as well as consumption tax, bar rental, etc.
Although his bar is often full, an analysis of transaction data shows that a year ago, customers per visit, and on the most recent weekend, that number dropped to, by more than 60%!
Cash flow is important for the restaurant, which has forced Brenton to reduce the working hours of 12 employees and spend more time working on their own.
"I work more and harder, but the rewards are getting less and less, last year I gave myself an hourly wage of $4.5, this year I have almost been reduced to free labor..."
According to Brenton, businesses like his would need to pay adult bar employees $36 an hour.
"I've done the math that in normal times, I have to earn at least $216 per employee to cover the cost of running the bar for a day, including staff salaries and other expenses, and if it's not enough, I need to fill it myself..."
In addition to staff costs, he recently received a notice from Liquor and Gaming NSW that licensing fees had increased by 55%.
Brenton also slammed the cost of food safety inspections at local councils, "My Blue Mountains City Council charges a $390 administration fee, plus $220 for annual on-site inspections...
Even if you pass the inspection without any problems, they will still charge you AUD 600. ”
In addition, there is consumption tax, bar rental, etc.
Beer and spirits are subject to excise tax, and the amount of the bar's menu is adjusted semi-annually in line with inflation – which has already sparked dissatisfaction among customers. Bar rents have risen by 16% in 3 years.
"The only thing you can do as a boss is find a way to raise prices and reduce costs, but all the adjustments are limited – if you pay less, no one will work for you, and if your in-store is too expensive, people may switch to other stores...
Countless small businesses are on the verge of collapse,
Even I may not be able to make it until next year..."
In addition to Sydney, several restaurants in Melbourne have also closed down recently.
Just this Monday, "Fishpot" announced that the store in Melbourne's Doncaster East will be closed, and the last day of the store is April 28 (this Sunday), and the "Fresh Fish Pot" Chinatown store will remain open.
Doncaster East's "One Fresh Fish Pot" store only opened in December last year, but I didn't expect it to be able to hold up after just over four months...
Just a few days ago, the long-established Japanese restaurant "Izakaya Den" in the CBD announced: April 26 (this Saturday) is the last day of the restaurant's business ...
Opened in 2009, the restaurant has been in business for 15 years now and was once one of the most popular restaurants in the city.
In addition, the long-established Italian restaurant "Rosetta" in Crown Melbourne has also announced that it will close on May 18.
In the past few days, a post on Xiaohongshu has exploded, and the content is also a Chinese boss who has worked in the catering industry for 8 years to persuade everyone that it is best not to enter the Australian catering industry now:
"Australian catering can persuade one to be a...
Truly, I beg you,
It is really prudent to set foot in Australian catering,
Cautious, cautious, re-cautious! ”
（截图来源小红书@小红薯_4643）
This post also caused a lot of discussion, a restaurateur who has been in Melbourne for 24 years said,
"The landlord increases the rent every year, all kinds of insurance, lawyer fees, etc., and the price of raw materials is also rising, I don't dare to adjust the menu price at will, and I will lose customers immediately as soon as I adjust it, it's too difficult..."
"Don't go into the mall to eat..."
"The ATO will suck the blood of the middle class and small business, it's very disgusting..."
"The five-year lease has risen by 40% at the end of the lease and the price of ingredients has increased by 40% every week, not to mention labor. My store is full of people, and it's hard to open a store, let alone sit in a store that is not full of people..."
"Although I am not in the catering industry, the business is much the same, and I also have a deep experience, that is, many things that should be done by employees are now carried by small business owners, and they have become a machine with almost no life..."
One owner shared his experience of running a store:
"After the epidemic, I can automate all the work in the kitchen...
The second cut product line, there were 4 main categories before, and now I cut one, use only a few materials to make more changes, the menu is not so monotonous, reduce kitchen loss...
The third front desk was all changed to Kiosk or QR code ordering, giving up cash and service, during which there were customer complaints, but there was no way.
The second is to push more discounts on food delivery platforms to increase additional cash flow, and then take the initiative to increase prices, which is almost 20% higher than before the epidemic... Although the operation lost some customers and the turnover was reduced at the beginning, now the customers are slowly growing after acceptance, and the profit is higher than before. ”
Since the pandemic, we have often heard about restaurant closures, and the tsunami of closures has come...
Although the reasons for the closure are different, the large environmental impact is one of the very important reasons, and I just hope that this "cold winter" will pass as soon as possible...