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Another wave of family restaurants face perfect storm as beloved institutions close their doors

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Another wave of family restaurants face perfect storm as beloved institutions close their doors

Screenshot 2025-10-01 at 14.19.15.png Another wave of family restaurants face perfect storm as beloved institutions close their doors
Is it goodbye for the Vo Family for their Phuong Restaurant? Image source: Google Maps.

The handwritten farewell notices are becoming all too familiar in Sydney's dining precincts.



After 35 years of serving steaming bowls of pho and crispy summer rolls to generations of families, the Vo family at Phuong Restaurant in Crows Nest has joined the heartbreaking exodus of beloved family-run eateries calling time on their dreams.





Their closure on 1 October wasn't just another restaurant change—it was the latest casualty in what industry experts are calling the toughest trading conditions in decades, with 1 in 11 businesses in the hospitality sector expected to collapse in 2025.



When 35 years isn't enough



The Vo family's emotional farewell message captured the essence of what makes neighbourhood restaurants so special.



'Phuong Restaurant has never been just about food—it has been about people, connection, and family,' they wrote, acknowledging the generations who had passed through their doors for celebrations, family dinners, and countless everyday meals.









'The current trading conditions are the toughest we have seen in our time of operating venues'

Restaurant owners Rebecca Lines and Hamish Ingham, Broadsheet



For many seniors, Phuong represented something increasingly rare in modern Sydney—consistency, affordability, and genuine warmth. The cosy venue's well-priced dishes, including their famous Vietnamese stuffed chicken and sizzling beef, had remained accessible even as costs soared around them.



The numbers tell a stark story



What the Vo family faced reflects a crisis sweeping across Australia's hospitality landscape. Insolvencies are at record highs and are up 57 per cent for the year to November, with the average business failure and closure rate currently at 5.1 per cent—the highest since August 2020.









Food and beverage services now lead all industries for business failure rates, late payments, and tax debt defaults, while spending at cafes, restaurants and takeaway outlets has remained flat since early 2023.




The perfect storm facing restaurants


High rents, increasing costs, staff shortages, and customers staying home have created unprecedented pressure.


Rising operational costs include skyrocketing power prices, increased ingredient costs, and persistent labour shortages.


Consumers tighten their belts amid cost-of-living pressures.




When 'pause' means goodbye



Just days before Phuong's closure, nearby Moon Phase bakery in St Leonards quietly shuttered with an equally mysterious note about going on 'pause' from 21 September. The award-winning bakery, recognised in the 2025 Good Food Essential Sydney Cafés & Bakeries guide, had built a devoted following for its exceptional croissants since opening in 2023.



The Daily Mail understands this 'pause' is actually permanent—another casualty of conditions that have claimed established names like Red Lantern, Mr Yip, and Monopole in recent months.









What this means for dining communities



For older Australians who remember when a night out was both affordable and predictable, these closures represent more than lost dining options. They're watching the fabric of their communities change, as establishments once considered immovable cultural objects make heartbreaking decisions because it quite simply costs more to keep opening the doors than to shut them permanently.



Many family-run restaurants have served the same customers for decades, becoming extensions of the community's living room. When they close, they take with them not just recipes and traditions, but gathering places where multiple generations shared meals and memories.



The ripple effects



Reports of rent hikes have joined reports of fewer diners with smaller budgets, and large developments have kicked into gear, meaning venues have had to move out. All of this has contributed to venue owners and operators experiencing burnout.









The closures create a vicious cycle. As beloved restaurants disappear, remaining establishments face increased pressure to fill the gap while dealing with the same challenging conditions that felled their neighbours.




How you can support local restaurants



  • Visit regularly rather than saving them for special occasions

  • Order directly from restaurants instead of through delivery apps when possible

  • Pay promptly and tip fairly when service warrants it

  • Spread the word about places you love on social media

  • Be understanding about menu price increases and reduced hours




Signs of hope amid the struggle



While the statistics paint a grim picture, some restaurateurs are finding ways to adapt. Industry veterans note that there's a new financial cycle every 10 to 12 years, and some businesses will thrive during this challenging period while others exit.



The key difference now is the support of local communities. When longtime customers rallied around Phuong with thousands of social media messages expressing their sadness, it showed the deep connections these establishments forge.









Looking ahead



The 2025 outlook is likely to remain challenging until interest rate relief arrives, but communities can make a difference. Every regular customer, every positive review, and every recommendation helps family-run restaurants weather the storm.



The closure of institutions like Phuong reminds us that the restaurants we take for granted won't always be there. In a time when 1 in 11 hospitality businesses face potential collapse, supporting the places that matter to us isn't just about good food—it's about preserving the heart of our communities.



What This Means For You


The Vo family's gratitude for being welcomed into their customers' lives, celebrations, and family dinners serves as a reminder of what we stand to lose when these gathering places disappear. As they move on to their next chapter, their legacy lives on in the thousands of meals shared and memories made over three and a half decades.



What memories do you have of your favourite local restaurants? Have you noticed changes in your neighbourhood dining scene? Share your thoughts about supporting local family-run eateries in the comments below.




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Another one I have never heard of !!

While families are tackling high mortgage repayments or incredibly high rents as well as soaring grocery bills, oh and let's not forget high power cost, how and why would they be eating out at any restruants.

Unfortunately a lot more Restruants will need to close down.

We eat out either once a week or every two weeks. We go to our favourite Chinese restaurant in Kingsgrove for maybe 25 years now.

What I've noticed over the past year is their prices have risen by maybe 30 % or even more.
We usually order chicken chow main, and either beef in black bean sauce or Mongolian beef plus a fried rice and hubby and I share. Sometimes I will also order either Dim sims or spring rolls.
A year ago our bill came to around $45 now its around $70 and no difference in ordering.
I understand due to the rise in groceries and power cost they need to increase prices but I said to hubby I think we will start going monthly. With the warmer weather we will instead get fish n chips and eat at the beach instead.

How could a family or couple paying rent or a mortgage afford to eat out
 
Eating out has become a luxury. It has now become quite unfordable. We used to go out midweek every week for dinner and always ate out on Saturday and Sunday for lunch. We may do Saturday lunch every few weeks now. Rather than go out now, we try to replicate our favourite meals in our kitchen and try also so new ones, it much cheaper. It is a shame that so many eating places that are long term parts of the community closing down. It has become unaffordable for many small businesses to provide the same quality and stay afloat. A lot of the pleasures are now luxuries!
 
I haven't eaten out in so long that I've forgotten where and when.

The prices now frighten the bejesus out of me and I simply can't justify the expense. :(
 
Another one I have never heard of !!

While families are tackling high mortgage repayments or incredibly high rents as well as soaring grocery bills, oh and let's not forget high power cost, how and why would they be eating out at any restruants.

Unfortunately a lot more Restruants will need to close down.

We eat out either once a week or every two weeks. We go to our favourite Chinese restaurant in Kingsgrove for maybe 25 years now.

What I've noticed over the past year is their prices have risen by maybe 30 % or even more.
We usually order chicken chow main, and either beef in black bean sauce or Mongolian beef plus a fried rice and hubby and I share. Sometimes I will also order either Dim sims or spring rolls.
A year ago our bill came to around $45 now its around $70 and no difference in ordering.
I understand due to the rise in groceries and power cost they need to increase prices but I said to hubby I think we will start going monthly. With the warmer weather we will instead get fish n chips and eat at the beach instead.

How could a family or couple paying rent or a mortgage afford to eat out
I remember when my Mum would cook for two days prior to a family picnic on the weekend.
Meatloaf and salad were prepared as well as a fruit slice and cupcakes. Flasks of tea and coffee made and bottles of cordial. Along with the cricket bat and a soccer ball.
Fantastic days that I still remember.⚽🏏🧁🍹
 
We use to eat there when we lived locally. Great service & food was lovely & fresh & affordable. The decor was a little out dated & could have done with a refurbishment but the food was so good it never worried us. There are a lot more cafe/restaurants opening in that area that cater for the younger crowd. And the old dependable ones are disappearing. Such a pity!
 
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Another one I have never heard of !!

While families are tackling high mortgage repayments or incredibly high rents as well as soaring grocery bills, oh and let's not forget high power cost, how and why would they be eating out at any restruants.

Unfortunately a lot more Restruants will need to close down.

We eat out either once a week or every two weeks. We go to our favourite Chinese restaurant in Kingsgrove for maybe 25 years now.

What I've noticed over the past year is their prices have risen by maybe 30 % or even more.
We usually order chicken chow main, and either beef in black bean sauce or Mongolian beef plus a fried rice and hubby and I share. Sometimes I will also order either Dim sims or spring rolls.
A year ago our bill came to around $45 now its around $70 and no difference in ordering.
I understand due to the rise in groceries and power cost they need to increase prices but I said to hubby I think we will start going monthly. With the warmer weather we will instead get fish n chips and eat at the beach instead.

How could a family or couple paying rent or a mortgage afford to eat out
Next time you are there, order Mapo Tofu with rice.
You won't regret it.
 
I was in Canberra on Tuesday to take a friend for his birthday lunch. Tuesday is Snitzel Day. The chalkboard menu has the prices, once they were all the same price now only two items are the advertised price of $18. I went to the counter to order and got a shock when it was rung up on the till, $72, Then she told me to swipe the friend club card and the bill came down to $36. Eve so, for that amount I could buy 3k + of chicken breasts. The world has gone mad with the cost of restaurant food, once this snitzel was $12 [that included the other choices now in the $20 and upwards bracket]. Even McDonalds is getting us, but in two ways, price increases and "Shrink Inflation". It's cheaper to eat at home these days. And, don't get me started on Supermarkets...................
 
I was in Canberra on Tuesday to take a friend for his birthday lunch. Tuesday is Snitzel Day. The chalkboard menu has the prices, once they were all the same price now only two items are the advertised price of $18. I went to the counter to order and got a shock when it was rung up on the till, $72, Then she told me to swipe the friend club card and the bill came down to $36. Eve so, for that amount I could buy 3k + of chicken breasts. The world has gone mad with the cost of restaurant food, once this snitzel was $12 [that included the other choices now in the $20 and upwards bracket]. Even McDonalds is getting us, but in two ways, price increases and "Shrink Inflation". It's cheaper to eat at home these days. And, don't get me started on Supermarkets...................
And so the rich get richer and the poor get poorer.
 
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