Rocky Pitarelli and his wife Kerrin have owned local institution Caruso’s Italian Restaurant in Gymea in Sydney’s Sutherland Shire for five years, with Mr Pitarelli previously working as the eatery’s head chef under the last owners for around 12 years.
It was a job they loved for “every minute of every day” – but last weekend the restaurant’s doors finally closed for good after the couple found they could no longer survive the impact of skyrocketing costs month after month.
He told news.com.au the cost of essential supplies such as fresh produce had become “unbearable” due to extreme weather events destroying crops as well as skyrocketing shipping costs and inflation more generally.
At the same time, he has been saddled with monthly interest rate hikes and exploding fuel and electricity costs, with Mr Pitarelli’s electricity bill recently rising from $300 a month to $504, then to $700 and finally to $840 after the latest 20 percent increase . – even after doing everything he could to cut costs and increase efficiency, such as installing LED lighting and fairy lights in the room.
“It’s tough – you put your life into one place and the bottom line, what you have to show for it is nothing,” Mr Pitarelli said.
“It’s an honor to host parties in your venue—families have made you a part of their lives and they trust you with that christening, birthday party, engagement—those milestone celebrations.
“We pay the price at the end, mentally, physically, emotionally – we are exhausted. But you know when it’s time to pull the plug, because you can’t keep going.”
Sir. Pitarelli said it was unconscionable for big corporations like the big banks and supermarket giants to pull in record profits in the billions at a time when the country was on the brink of recession with countless small business owners facing ruin under a “constant downpour of bills”.
“Everything is becoming unaffordable and the only people making money are the big companies like Coles and Woolies. They have the buying power but mum and dad’s surgeries are just forgotten by this nation. We depend on consumer support but they have none money. Everyone has another job now,” he said.
“There is just no relief from the pressure and everyone seems to be looking at the bottom line – we have forgotten that there is a human face behind the bank balance on the spreadsheet.
“It’s a domino effect with many pressures from all angles. George coming into my restaurant can’t pay $35 for a pizza when they’re $15 from Domino’s or $25 from Crust – so we’re becoming more of a corporate society … everything is designed for the bigger guys because they have the power, and we are just devastated.”
The father-of-one said he believed the country was heading towards an economic “dictatorship” dominated by big business with family businesses – which he described as the “backbone of our democracy” – dying out one by one.
He pointed out that while he was “a victim of circumstance”, he was far from alone, with countless other small businesses being pushed to the breaking point.
“To reduce inflation, people have to be out of work, unemployment has to rise and businesses have to go out of business. The only way it will stop is when people lose jobs,” he said.
“There’s no human feeling about it anymore, it’s all dollars and cents and at the end of the day the buck stops with the poor guy at the end of the tail trying to get to the top of the head.
“As a country we need to start asking why – why is this happening? Why do the banks have to make $20 billion a year? Why do the power companies have to make 20 per cent more – especially when it’s driving people to the wall?”
He said it was time for an honest conversation and for people’s voices to be heard before it’s too late.
“It’s like we’re in The Hunger Games. The basics of life have become unaffordable. Grocery bills – you burn through $100 for two packs of TimTams almost, and if you get gas it’s $50 to $100. It appears to be a 50 percent price increase for every person to live in this country, and who suffers the most? The children … it sends us desperate,” he said.
“It’s not just a problem, and unfortunately in this day and age, there’s no real answer until we as a nation decide enough is enough.”
Meanwhile, Mr Pitarelli said there were ways the government could help those struggling, including simply listening to the concerns of small business owners, as well as demanding answers from the big end of town.
“As electricity prices continue to rise, maybe they need to be held accountable to the Australian public. What changes in their business to say we need this price increase?” he said. “As a small business, if we raise the price of pizza $5, we have to stand there and justify it to the customer, because they’re going to ask. But when a bigger business says there’s an extra 20 percent on the electric bill, the public can just like it or lump it.
“This is where the government can help.”
He added that giving small businesses extra time to prepare and adjust to price increases would also help, given the unique challenges they faced.
“Corporate Australia has a billion in the bank so when the bank raises the price one day it’s implemented the next because they have the systems and the structure in place,” he explained.
“But when you cook in the kitchen, make accounts, order food, collect supplies and clean, you are stretched for time. I need at least three months to figure out a way to get through the next impact that comes to me, and it’s month after month – where’s the ceiling? When will they say they have done enough?”
He also proposed shorter terms for central bank governors to inject “fresh blood” and ideas into the central bank.
“I can’t say it enough – small businesses need help. At the moment there are too many people making decisions without consequences and they don’t have to justify it to anyone – the poor guy at the end just has to find the money and that’s the end of it,” he said. describes Australia’s current economic situation as “a mess”.
Despite his “devastation”, Mr Pitarelli thanked the community for its years of support and said he had not ruled out opening another Caruso in the future.
“Farewell is sad, but we have also received hello – hello to life, hello new adventure. We may open another Caruso’s down the track — our community well and truly made the case last week as to why we should do that, but again, it comes down to dollars and cents,” he said.
“Thank you to everyone who has done business with our company over the past five years. It’s quite humbling to feel the genuine love.”
Australia’s shameful ‘profit-price spiral’
Sir. Pitarelli’s concerns were echoed by a devastating analysis by The Australia Institute last month, which found excessive corporate profits – and not Australian wages – were behind our skyrocketing cost of living, described as the “profit-price spiral”.
It found that inflation would have stayed within the RBA’s target had businesses not squeezed consumers through the pandemic via excessive price increases and “gouging”.
But instead the RBA has focused on a “wage-price spiral”, as director Dr. Indeed, Jim Stanford said there was none, arguing that the pressure on Australians to essentially cope with a pay fall was “misplaced and unfair”.
The results were released in the same week that Qantas announced a profit of $1.4 billion, supermarket giant Woolworths revealed a profit of $907 million – a 14 per cent increase – and fellow grocer Coles revealed a profit of $643 million, which grew by 17.1 percent.
It also came hot on the heels of the Commonwealth Bank’s recently reported record $5.15 billion profit – a 9 per cent increase.
‘Big squeeze’ destroys companies
Meanwhile, digital credit reporting agency CreditorWatch recently released its latest Business Risk Index, revealing that there was “huge pressure” from rising costs and falling demand squeezing countless businesses.
CreditorWatch chief economist Anneke Thompson also confirmed that there was a “higher risk of insolvency for sectors that rely on discretionary spending, with the food and drink sector topping the list of riskiest sectors with a 7.3 per cent probability of default”.
Citing a recent Finder survey which found that 51 per cent of Australians who tried to cut back on spending reduced their eating and drinking habits, while 36 per cent limited how often they went to events such as movies, sports games and gigs, Ms Thompson said it “highlights the risk to this sector as business owners will now not only struggle with high costs, wages, interest payments and rents, but also lower demand”.