Soaring menu prices. Shrinking portion sizes. Egregious wine mark-ups. Second-rate service. If you reckon dining out’s not as much fun as it used to be, spare a thought for the beleaguered restaurateur, facing a perfect storm of pain from rising costs in every direction.
The combination of sharp increases in rents, wages, food and energy costs, as well as ongoing staff shortages – and in some cases, a dwindling supply of customers willing to swallow the inevitable flow-on effect of all of the above – is forcing many in the industry to adopt long-resisted tactics in order to survive.
Coskun Uysal at his restaurant Tulum in Balaclava, Melbourne, is facing the double-whammy of rising food, energy and staff costs combined with a drop-off in patronage. Louis Trerise
It puts restaurants at ground zero in the fight against sticky inflation, with costs including wages and rents rising and continuing to trickle through the industry for months to come.
As Restaurant & Catering CEO Suresh Manickham puts it, “The recent decision by Fair Work to raise the minimum wage has given many restaurateurs no choice but to pass the increase on to consumers.
“They’re not profiteering: they’re just keeping up with costs.”
However, this is not yet another industry doom-and-gloom story. Restaurateurs are by nature a resilient lot, and in the face of having their diners antagonised and their livelihoods destroyed, some of the best are holding out against the more obviously punitive measures in favour of adapting their business models to the seismic shift in circumstances.
One of these is Coskun Uysal, of contemporary Turkish restaurant Tulum in Melbourne’s Balaclava. Like many, he’s facing the double-whammy of rising food, energy and staff costs, combined with a drop-off in patronage as cost-of-living pressures take their toll on his customers’ discretionary income.
“People are not dining out so much mid-week any more,” he says. “And when they do, they’re spending less.”
In response, Uysal has introduced a raft of measures aimed at both preserving the business as well as the loyalty of his long-standing customer base. He’s tweaked the menu to include more vegetable dishes, replacing the costlier meat and fish, and added takeaway menus; while on weekends, a simit cart out the front of Tulum sells Turkish street food and pastries. Plus, he’s just launched Saturday cooking classes.
“Surviving in such difficult conditions requires resilience, and faith in the continuing support of our customers,” he says.
Another who remains optimistic despite the onslaught is Simon Blacher, creative director and co-founder of the Melbourne-based Commune Group of six – soon to be seven – restaurants, most located within 500 metres of each other in Prahran/Windsor’s Chapel Street precinct.
“Right from when we started in 2012 – with Hanoi Hannah – our plan was to ensure Commune would have offers that sat in different sectors of the marketplace, enabling us to have multiple revenue streams,” Blacher says.
“So when there’s a midweek drop-off at our more upmarket venues, that’s being more than offset by stronger trade midweek at our more casual venues, where you can get something comforting like a bowl of ramen, or takeaway.
Simon Blacher, creative director and co-founder of the Melbourne-based Commune Group of restaurants.
“It’s not like we had a crystal ball at the outset, but there’s no doubt this strategy has helped us weather the economic storm.”
Perhaps surprisingly, Blacher says Saturday nights at the relatively high-priced Firebird and Moonhouse have never been busier.
“I think it’s because people still want to eat well, but they’re maybe only going out once a week now, instead of two or three times a week like they did previously.”
Next month sees the opening of the Commune Group’s seventh restaurant, Studio Amaro, a two-level, all-day Italian restaurant and bar in Chapel Street, Windsor. In common with a growing band of newer eateries, the venue will also boast a listening room, complete with DJ and “very good, accessible food”.
“We believe this is where a business should sit in these times,” says Blacher. “Rather than be one-dimensional, you want to give people multiple reasons to come to a venue, so we have a big music focus.”
Pan Koutlakis is co-founder and CEO of EatClub, a mobile app currently enabling about 2500 restaurants around Australia to offer last-minute deals and discounts to diners. He says business is especially strong mid-week, when people are still looking to eat out but with a reduced budget.
“What we’re doing is helping restaurants be more competitive. So you’re not getting the volume mid-week? EatClub is one of the options that can help you get bums on seats.
“That way, you can make something, instead of nothing.”
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