let's talk about today's big business
news which is the end of the road for
celebrity chef George Calombaris with
his Restaurant Group going into
voluntary administration yesterday
simply never recovered from the scandal
of having underpaid staff by almost 8
million dollars last night iconic
Melbourne and Sydney venues like Vita
the rebranded Press Club and rebranded
Hellenic Republic restaurants were all
closed the fate of 400 staff is now in
limbo as new buyers for the restaurants
are trying to be found
now it's administrators put out a
statement last night saying the group
hadn't been able to recover that hit to
its reputation
despite the rebranding it also blamed
the rise of delivery apps which can take
up to a 30% Commission on food
deliveries but I've been speaking to the
Restaurant Association and its CEO also
partly blames the Fair Work Ombudsman
for naming and shaming George Calombaris
even though his company had voluntarily
owned up to the under payments and
where's Lambert also told me restaurants
in general are buckling under the
bushfire crisis and significantly rising
costs the base wage for a restaurant
employee while overall wages are
stagnant is up 36% the cost of food and
beverage is up 30 to 40 percent the cost
of rents are up 35 to 60 percent the
cost of electricity is up a hundred and
fifty percent the cost of gas is up 50
percent and we expect that the Fair Work
Commission is going to come out with
another wage increase to the minimum
wage and the award rate in just a few
weeks this is just going to add
increased pressure to an industry that
is already doing it tough based upon
outside forces
now where's Lama told me many large
chain restaurants are simply no longer
able to turn a profit juicer these
rising costs and they will either need
to raise their prices or closed for more
on their slits we're joined in Sydney by
financial journalist and strategist with
stock market newsletter Marcus today
it's Henry Jennings good morning Henry
good morning Madeleine so look I think
that no one would dispute that in the
George Calombaris case he is largely to
blame for his own demise that under
payment of nearly eight million dollars
but the point made by
Lambert there is that the restaurant
industry in general is under a lot of
pressure yeah I think especially the
fine dining end is under an awful lot of
pressure ingredients are just getting
more and more expensive and as well as
we're saying our wages are also going up
as well and I think consumers are
changing in their appetites to come
completely as well and going for more
mid-range and family experiences that
that sort of taking out the fine dining
and that really is I guess a function of
the economy at the moment which is
certainly not going spectacularly well
we've seen that with a number of retail
chains collapsing and that only feeds
through into the same narrative that's
affecting restaurants so it is a tough
world out there we've seen Heston
Blumenthal we've seen Neil Perry we've
seen others Jamie Oliver of course at
another high profile restaurant trained
under pressure and collapsing in
Australia at least so it is a very tough
world I think out there but certainly
you know those that have the formula
right do tend to do quite well you only
have to look at Justin hammers Empire
here in Sydney which does appear to be
very resilient despite the out the
downturn and consumer sentiment that
we're seeing at the moment yeah it's
always been a really tough game but as
you say with the general consumer
sentiment at the moment even tougher
you