Yet another food business in trouble.
After the news in July that Sumo Salad were in the hands of external administrators we wouldn’t have thought that, less than 2-weeks later Zumbo Patisserie would follow.
With stores scattered across New South Wales and Victoria, the well-known brand has found themselves in a sticky situation. Early indications are creditors such as wholesalers among others may be left out of pocket as debts are said to potentially reach $10m.
No doubt this is another case where rising rents and high costs of labour are putting extreme pressures on restaurants / fast food providers across the country. This is compounded by times of high competition and a reduction in consumer spending.
We recently highlighted in our Trade Credit Risk Index that both Sumo Salad and the Jamie Oliver Restaurant Group (Australia) were notable business failures in Q2. This follows the demise of other food retailers such as Pie Face and Doughnut Time, further placing pressures on food distributors and wholesalers.
This development highlights to all businesses trading on credit that you can never be too careful and that the only peace of mind is a trade credit insurance policy.