Spiralling saga for local businesses

Since taking over the business last April, Charity has contended with spiralling operating costs.

She recently made the difficult decision to sell the business — partly for health reasons, and partly due to the stress of covering those price rises.

“It’s another rise, and another rise, and then you get a notice from one of your suppliers who said, ‘Unfortunately, we now have to put all our products up by five per cent’, and then you get one from another supplier,” she said.

“It’s a vicious cycle.”

Charity said she paid about $10,000 in insurance last year, up by about $500 from the previous year.

The rent for the premises also went up by $22 per week from the previous year, she said.

To cover costs, Charity was forced to make the tough decision to let go of two staff members.

“You have to try cut somewhere,” she said.

“Either you cut the quality of food, then you don’t get any business because people aren’t going to come in if it’s not good quality food, or you cut staffing.”

She said that government assistance in the form of rent controls and insurance support for small businesses would be a big help to keep businesses likes hers on their feet.

Kitchen Kravings isn’t the only local business to feel the pinch. Anyone walking around Cobram’s CBD cannot fail to notice For Lease signs plastered in shop windows.

Across town, Cafe13 owner Kylie Poole explained that her business was recently hit with a drastic jump in overhead costs.

“In the last financial year, the costs of electricity and gas rose $12,000,” she said.

That equated, Kylie said, to almost a doubling of those costs from the previous year.

But it isn’t just overheads that are soaring. Insurance and rates have increased, while prices for raw products — such as cooking oil and flour for batter — have also risen for Kylie.

She said Cafe13 currently employed about seven staff members, most of whom were local teenagers on casual contracts.

“Most of the kids haven’t had a job before,” she said.

Kylie has managed to keep Cafe13 on budget, but only by trimming hours for a few staff.

And to keep further costs down for customers, Kylie made the decision to not apply a credit card surcharge to transactions.

She said one solution could lie in creating more reasons to keep tourists in town, injecting money into the local economy.

“We don’t do anything for Christmas or New Year’s in town. Nathalia has fireworks, Yarrawonga has fireworks. I think in general we seem to get overlooked here in Cobram,” she said.

“I know the Katamatite Rodeo brings extra money into Katamatite because people stop and buy drinks from the servo, etcetera.

“We’ve got those beautiful big parks — Federation and Mivo Parks — and we don’t utilise them. But it could bring a lot more [tourists], even from other towns.

“It would keep them shopping here in our town.”

A nationwide issue

A report, published by the Council of Small Business Organisations Australia and Commonwealth Bank Australia in October last year, found small businesses across the country were facing rising energy prices, insurance costs and rents.

COSBOA chief executive Luke Achterstraat said small businesses across Australia were struggling to manage spiralling costs.

“Australian small businesses are the heart of every community, employing more than five million people,” he said.

“Small businesses have been hard hit over the past year, with nearly half not breaking even. Owners are doing their best to keep their heads above water, but this is not an easy task in a sea of economic and regulatory uncertainty.”