After 32 years running Da Angelo Ristorante in Battery Point, Angelo Faraccio says he’s never seen conditions quite like this.
“I walk around town and see new businesses open and in six months they’ve closed down,” he said.
His experience reflects a national trend, with more than 10 per cent of Australia’s cafes and restaurants shutting their doors in the past year – double the national business failure rate, according to CreditorWatch.
Hospitality Tasmania CEO Steve Old said consumer behaviour changes have hit food-focused venues harder.
“Cost-of-living pressures see households generally reduce higher-cost discretionary items first, like full meals and larger dining occasions, while lower-commitment social spending, like meeting for a drink, often proves more resilient,” Old told Pulse.
For the past 32 years, Angelo Faraccio has run Da Angelo Ristorante in Battery Point – one of the Tasmanian restaurants that have defied the odds.
Faraccio said the current closure rate doesn’t surprise him.
“People forget about the bills that get accumulated when you run a business,” he said.
“People have got to be aware to remember the hidden costs and it’s not all, you know, bright diamonds and what have you, because there’s a lot that goes on behind the scenes.”
Faraccio said he loves to support other businesses in Hobart, just like others in hospitality support his.
“I go to Vanidol’s in South Hobart, I go to Frank,” he said.
Vanidol’s was first established in 1989 in Elizabeth street North Hobart.
At that time, it was the first restaurant to have three Asian cuisines on the menu Thai, Indian and Indonesian, they are now based in South Hobart.
Frank has been running since 2014 at the Franklin Wharf.
Australian Restaurant & Cafe Association CEO Wes Lambert said the figures confirm the food-led hospitality sector is under structural financial pressure.
“This is not cyclical. This is policy-driven pressure layered on top of weak consumer confidence,” Lambert said.
“Cafés and restaurants operate on razor-thin margins. When you combine rising wages, inflexible industrial settings, higher rents, escalating food costs and a tax system that punishes growth, something has to give.”
He said food prices have risen 7.5% over the past year, while cafe and restaurant turnover has remained flat since early 2023.
The ARCA is calling on state and federal governments to urgently reform industrial relations and tax settings.
