Pay increase the final straw for struggling small businesses

After 70 years in operation, the J&K store in Broken Hill, Australia, has closed its doors, marking the end of an era for owners Shelley and David Garnaut. The couple, now in their 60s, purchased the corner store in 2007 with optimism, but a combination of a shrinking customer base and escalating costs made its continued operation impossible.

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We've been battling, really battling.

At its peak in 2015, the store's income was sufficient to cover expenses, retain six staff members, and provide Ms. Garnaut with a wage. However, the Garnauts found themselves "battling, really battling" in recent years. Their electricity costs alone surged from $3,000 to $5,000 in the past 12 months. The "final straw," according to Ms. Garnaut, was a recent 6 percent increase to the minimum wage coupled with new regulations requiring employers to pay superannuation with every pay cycle.

"There was just no way [to stay open]," Ms. Garnaut stated, explaining that she and her husband were working increasingly long hours for diminishing returns. "David and I [were] working more and more [and we] only had [our staff] for a couple of hours a day. I cut them back to try and keep them employed and [it] just still didn't work." She accepted that the rising costs were simply too much to absorb.

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There was just no way [to stay open].

The closure of the J&K store, one of Broken Hill's few remaining corner stores, reflects a broader trend affecting small businesses in the city. A local cafe recently shut down after just 15 months, and other businesses are posting notices about price increases to offset higher wage and utility expenses. David Trinder, a restaurateur with over 40 years of experience in the city, noted that "business at the moment is not for the faint-hearted, particularly in hospitality, given the short-staffing solutions." He plans to raise his prices to manage rising expenses, emphasizing that "everything goes up, and we try to be reasonable in our application to price rises."

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David and I [were] working more and more [and we] only had [our staff] for a couple of hours a day. I cut them back to try and keep them employed and [it] just still didn't work.

NSW Small Business Commissioner Kalina Koloff acknowledged the impact of rising cost pressures, including wages and fuel, on small businesses. She encouraged owners facing financial distress to seek support, but for the Garnauts, the challenges proved insurmountable.

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Business at the moment is not for the faint-hearted, particularly in hospitality, given the short-staffing solutions.