August 19, 2024 • 18 mins
It’s tough out there for New Zealand’s hospitality industry.
The rising cost of living in the past few years has seen everyone tightening their belts, and the skyrocketing cost of food in particular has been cutting into people’s disposable income.
With overheads increasing at the same time as patrons cutting back on their spending, it’s no wonder we’ve seen a series of beloved bars and restaurants closing their doors for good.
So what’s next for the industry, and how can these businesses adapt to changing times?
Today on The Front Page, we’re joined by Herald deputy Lifestyle editor Johanna Thornton, and AUT Hospitality and Tourism professor David Williamson, to talk about the state of the sector, and where it needs to go from here.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Sound Engineer: Paddy Fox
Producer: Ethan Sills
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kielda.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. It's tough
out there for New Zealand's hospitality industry. The rising cost
of living in the past few years has seen everyone
tightening their belts, and the skyrocketing cost of food in
(00:28):
particular has been cutting into people's disposable income, with overheads
increasing at the same time as patrons are cutting back
on their spending. It's no wonder we've seen a series
of beloved bars and restaurants closing their doors for good.
So what's next for the industry and how can these
businesses adapt to changing times. Today on the Front Page,
(00:51):
we're joined by Herald Deputy Lifestyle Editor Johanna Thornton and
aut Hospitality and Tourism professor David Williamson to talk about
the state of the sector and where.
Speaker 3 (01:02):
It needs to go from here.
Speaker 2 (01:06):
Johanna, can you run us through some of the restaurants
that have closed down so far this year?
Speaker 3 (01:11):
Unfortunately there might be a few, too many to name.
Speaker 4 (01:15):
Yeah, there's a few. I mean, I suppose the biggest
or the most shocking was Espequre, which closed in July
after thirty two years. We had Madame George on Kodunghappy Road,
which was a huge loss. It's one of weba's top
fifty restaurants last year. There was also Floor on k
Road as well, which is a cute little wine bar.
Homeland is closed down. Orphan's Kitchen Omni which is a
(01:37):
little yakatory spot on Dominion Road. Stanley of Winebar and Milford.
We also had Conch which was more sort of a
bar and restaurant, the Wine Cellar and Tiger Burger is
another one that's closed.
Speaker 3 (01:51):
God, there's so many. What have some of the reasons
been behind their closures?
Speaker 4 (01:55):
There's a few and Madame George said it was the
economic downturn. Danleyev said that there were a host of
reasons like the pandemic with events and strained economic conditions,
and I actually saw the Restaurant Association reported in a
recent survey that the main challenges businesses are citing is
just customer downturn.
Speaker 2 (02:14):
David, from your years of experience in the hospitality industry,
is this spate of closures unusual or is it kind
of par for the course.
Speaker 5 (02:22):
It's sort of hard to differentiate that it is an
unusual time.
Speaker 6 (02:27):
I'm not sure that number.
Speaker 5 (02:29):
Of closures is particularly different, but I think what is
different is that people are really struggling in this sector,
and I think we're going to see more closures coming through.
I was talking to a couple of veterans from the
industry recently and they were adding to that suggestion of
what's really going on is not just the difficulties right now,
(02:51):
but the history of really impactful changes over the last
sort of period since COVID. So you have to understand
that this industry, you know, was shut down or massively
disrupted for a number of years through COVID, when the
boarders shut they had huge staff shortages. Then you have
those weather events. Just as we're coming out of COVID
(03:12):
and starting to recover from that, we get smashed with
weather events, which was really impactful on the industry. And
then you have, yeah, the high inflation, cost of living.
People have a lot less discretionary income to spend on
things like restaurants, cost of goods. For these industries that
record highs, they are paying top interest rates on any
debt they're holding.
Speaker 6 (03:32):
There's perceptions of higher crime in.
Speaker 5 (03:35):
The inner city for people in Auckland who are coming
in to dine out at night. So you know, there's
an awful lot going on and it's just been one
challenge after another. So a lot of these businesses are small, standalone,
own or operated businesses. They don't have huge amounts of
capital reserves to survive periods like this. So it's not
(03:57):
so much a question I think of, gosh, why are
staurants going down? At the moment, it's a question of
how on earth are they not going down given you know,
the conditions that we've had over the past few years.
Speaker 1 (04:11):
For decades, Aucklanders have enjoyed a long lunch in the
sun at Ponsomby Institution SPQR.
Speaker 7 (04:17):
But now the.
Speaker 1 (04:18):
Doors are shout and that's a liquidation, owing creditors over
two million dollars, yet another casualty of rising costs and
people keeping their wallets firmly shut.
Speaker 2 (04:32):
Johanna, can you explain to us what happened with SPQR
in particular?
Speaker 4 (04:36):
Yeah, well, I mean, I suppose the announcement seemed pretty
dramatic when they said they were closing in July, but
I think it had definitely, you know, the quality of
the food maybe had dropped off in recent years and
it wasn't sort of the hottest spot to be anymore
where it had been in the past, and owner Chris
Rupe just released a really brief statement saying that he
was really sorry for the current situation and sort of
encourage people to get out there and support hospitality. It
(05:00):
turned out they were placed into liquidation with the business
owing more than two million in land revenue and it
owes over one hundred thousand two staff in unpaid wages
and holiday pay. And then The Herald also reported that
the business that Ownsespecure withdrew nearly one point four million
from the business before it went into liquidation. So I
think we're going to hear a lot more about that story.
Speaker 3 (05:21):
It is quite jarring when some of our favorite places close.
Speaker 2 (05:24):
Hey, I mean Peter Gordon's Homeland closed this year's citing
issues with renewing its lease. How often is an issue
like that to blame for a space taking on a
new life.
Speaker 4 (05:34):
Well, I mean I heard that the problem with Homeland
was there's a massive new retirement village going in there
called Cracker Bay. So I think the development of that
whole West Haven area didn't include keeping homeland there, So
I'm not sure how often you know a lease is
to blame.
Speaker 5 (05:50):
Yeah, I think there's a whole range of problems like
that that certainly would finish off a lot of places.
But yeah, again, I think it's a more complet and
a multifaceted number of pressures which brings these organizations to
the edge of collapse. I think what is interesting is
it's such a resilient and it's such an innovative industry.
(06:11):
I often describe restaurants that's extremely nimble, and so you know,
at the moment where you have these raally difficult trading conditions,
hospitality shows up as an area where businesses do suffer
and go down, but when conditions pick up, hospitality is
also the first industry to recover. We sort of go
into recessionary times quicker and lower, but we've come out
(06:35):
of them faster and higher. So it's a very nimble industry.
And Ram's just pointed out in their last report that
you know, there is nineteen thousand, five hundred and eighteen
restaurants still in New Zealand. It's the largest number we've
ever had in the country. The growth has very flat
since twenty twenty three, only zero point one percent growth
(06:57):
and restaurant numbers. But you know, it's not an existential crisis.
We're not going to certainly run out of restaurants, but
it is a very real crisis for the people who
are running these businesses. And there is a risk that,
you know, if we don't get out and support these
businesses and think about how we can address the pressures
(07:18):
that they're facing, that we could lose some more really
good operators. And it is a loss, it's a social loss.
We love these places to go out and enjoy the product.
We have some of the best restaurants in the world.
You know, we just got eight of our restaurants, including
the top thousand restaurants in the world by least last
year in twenty twenty three. We have some of the
(07:38):
best food, some of the best wine, world class restaurants,
great places to go, and we just need to be
careful that, yeah, we don't let these economic conditions damage
this industry to the point that it could really cost
us both in terms of tourism and our social enjoyment.
Speaker 8 (07:58):
The Restaurants Associations report into the state of the set
does show sales are up a five point eight percent
to nearly sixteen billion dollars. The number of outlet's across
the country only rose by zero point one percent. That's
just an extra twenty seven nationwide.
Speaker 5 (08:14):
Definitely going out less, they probably won't splurgs in the
same wine, or you know, they won't have that extra cocktail.
Speaker 8 (08:19):
Pretty Much every single cost that we would have has
gone up over the last few years. So whether it's rent,
whether it's staff, whether it's food, every part of the
cafe business has gone up. We need to raise I'll
turn over by about fifty percent.
Speaker 2 (08:33):
We mentioned some of the numbers of restaurants there, David,
is there perhaps an issue also with us having more
restaurants than our population can sustain?
Speaker 3 (08:41):
Perhaps, and some of these closures.
Speaker 2 (08:42):
Are just a course correction to a more sustainable hospitality environment.
Speaker 5 (08:47):
There is an argument that I've made around that, saying, yeah,
that perhaps we don't need I always use the example
of I walk up High Street and Lawn Street to
the university here, and I counted one time thirty food
outlets on those two streets, and I was going, you know,
if that was halved, would that be a social problem. Obviously,
(09:07):
it's a problem for the people who run these businesses
without a doubt, but it could be a correction. We
could be oversupplied. One of the veteran restauranteurs I was
talking to recently had just come back from overseas, and
I myself was lucky enough to get overseas, and we
were both commenting on the fact that, you know, New York, Milan, London,
(09:27):
some of these cities that we're lucky enough to visit
have these huge populations and fantastic infrastructure to support a.
Speaker 6 (09:35):
Really vibrant industry sector.
Speaker 5 (09:38):
And yeah, perhaps in New Zealand we've got too many
restaurants and not enough people. But I think more importantly,
we're basically constructed an economy which is proving very difficult
to support things like hospitality, things like retail, things like
our arts sector. If people don't have money, you know,
(10:00):
we've got a real cost of living crisis, and people
don't feel like they've got money in their back pocket
to spend, it's very difficult to maintain a vibrant hospitality
and arts and retail scene. So we need some guidance
from I think political areas as well to try and
build an economy that will support these types of industries.
Speaker 3 (10:31):
There's also the going out culture as well.
Speaker 2 (10:33):
Hey, Johannah, do you think COVID and all these lockdowns
have really changed the way we go out?
Speaker 4 (10:39):
Well, I mean, for me, it's made me go out more.
You know, I really want to get out there and
support restaurants, and I really missed not being able to
dine out when we couldn't. But I do think that
for a lot of people, they're reserving dining out for
special occasions, which is fair enough. And we get a
lot of feedback at Viva Magazine that, you know, people
really want to know that something's great before they'll go
out and take a risk. And I think that's where
sort of our restaurant reviews really come into play there,
(11:01):
because people can kind of know that they're going to
have a fantastic time if they're dropping a lot of
money on a dinner out.
Speaker 2 (11:06):
I'm always checking those reviews, by the way before I
go out, So I'm definitely one of those people. It's
not all bad news.
Speaker 3 (11:14):
Is it.
Speaker 2 (11:14):
You've recently, Johannah done a story on some of the
restaurants that have actually opened this year.
Speaker 4 (11:19):
Well, that's the thing. I mean, I'm actually blown away
by how many new restaurants open every year and just
this year there were twenty on my list. So we
had San Ray on Pontsby Road, which is from the
team that brought us Kasidor Restaurant. We've got Bodega Delian Bistro,
which is also on Pontsby Road. There's a new amazing
little French wine bar in Birkenhead called on Pinard. Maybe
(11:41):
the most ambitious new opening of the year is Queen's Rooftop,
which is this amazing rooftop bar on top of one
Queen Street. And also in that building is Advia restaurant
from chef Gareth Stewart, which opened in January. There's more.
There's First Mates, Last Laugh, which is due to the
Tabron's new glamorous spot in West Haven opening this week
at the Marriott Hotel. But I think a lot of
(12:03):
things that these places have in common is that they're
actually from restaurant tours who maybe already have a restaurant
or they've got the backing of a hotel, so there's
a bit more of the knowledge and sort of money
behind them, which is quite an interesting trend I'm seeing.
Speaker 2 (12:16):
What do you think hospitality needs to adapt and survive
or is it fine as it is?
Speaker 6 (12:22):
David No, I think yeah.
Speaker 5 (12:24):
From a lot of the conversations I've had with practitioners,
there's this real feeling that these conditions are driving a
need for innovation and fundamental change in the way that
hospitality businesses run. I think you made a great point
there about the upper end. There are always new restaurants
coming in and the upper end of the markets doing
(12:44):
quite well still people going out for special occasions, but
that kind of middle area every day dining out thinking oh, yeah,
I don't want to cook tonight, so I think I
might just go out and have something to eat. That's
where it's really struggling. And there's been some made changes
around your people drink. Working from home has affected to
lunch trade, transport issues. So I think in order to
(13:08):
be really successful in this type of environment in the future,
there may be a fundamental need to move more towards
that casual, reasonably priced, fast turnover dining where perhaps you
are getting people to come through your place and do
three or four sittings in a night, moving those tables,
turning those tables over to really maximize how you're going
(13:31):
to get your revenue through the door, while the upper
end can do the formal three hour meal, high cost,
great reviews, really expensive thing. Well, that middle range I
think really has to think about moving into that space.
Speaker 6 (13:46):
When I was in Milan, that everyday's space.
Speaker 5 (13:49):
People living in apartments there eat out all the time,
and they will go and.
Speaker 6 (13:54):
Have a casual meal it's reasonably priced.
Speaker 5 (13:56):
And then leave within an hour, and then next person
will come in and move on to that table, and
so wondering whether that will be something that needs to
be really explored.
Speaker 6 (14:06):
But I think people are.
Speaker 5 (14:07):
Going to have to have really sharp skills in terms
of pricing and keeping an eye on costs. It's not
only that costs are going up dramatically, but also they're
really variable, and so if you don't have a razor
sharp eye on adjusting your menu pricing as costs move around,
you can get wiped out really quickly. I think people
are going to have to be innovative about how they
(14:28):
think about alcohol sales. Those have gone down a lot.
People aren't drinking as much as they used to, So
how do you innovate around that? You know, and as
Danny Mayro I said that the curse of restaurants is
it's not one big thing, it's a thousand little things.
It's like a eight sided Rubik's cube. You're constantly moving
and trying to adapt to the market and the changes
(14:51):
going on, and it's very, very tricky. So I have
absolute faith that the industry is going to innovate, survive,
and come through really well. Of places go out, new
places come in. And I guess one really exciting thing
is that you employment's up seven point three percent in
the sectors, so those really brutal.
Speaker 6 (15:11):
Staff shortages are starting to.
Speaker 5 (15:13):
Weaken and we're seeing our whole new generation coming in
to fill those roles, and that will really help with
consistency and getting on in the future.
Speaker 7 (15:25):
The top challenge currently for our businesses is customer downturn,
so that sort of a start contrast with last year
it was rising costs. A recent survey from our members
around how they're faring in twenty twenty four told us
that around seventy eight percent of them are worse off
this year than they were last year, when in twenty
(15:46):
five things will start to get better. Well, that's another.
Speaker 3 (15:48):
Question, Jehannah, what do you think needs to happen?
Speaker 4 (15:53):
Well, I mean I think that restaurants already are trying
really hard to adapt. I mean many of them do
sort of pop ups, labs events, you know, they do
special menus or set menus. I'm noticing a lot of
restaurants opening for lunch on the weekend. You know, they're
really trying to provide something new for their diners, or
they're totally changing their business model, like for example, Sid
Satowat earlier this year announced that he was scaling back
(16:16):
the fine dining restaurants Sit at the French Cafe and
turning it into a Nie, which is more of a
modern Pan Asian restaurant where you can drop in for
a you know, an entrain, a cocktail or have a
big meal, and then turning Sit at the French Cafe
into a smaller restaurant and reverting it back to the
French Cafe. So people are trying to adapt and try
new things to see what will work. So I think
(16:37):
we just got to watch the space really and.
Speaker 3 (16:39):
There's real rise. Actually I'll end on this on social media. Hey,
I'm on TikTok.
Speaker 2 (16:43):
I spend way too much time on tech talk, and
I know I'm probably too old to be spending.
Speaker 3 (16:48):
So much time on TikTok.
Speaker 2 (16:49):
But I get so many good restaurant recommendations from people
on tech talk, and I've noticed around the corner from
my house there's a cafe and I was wondering why
there were lines outside every Saturday and Sunday, and it's
because it was on TikTok. David, do you think that
that's really something quite fun and exciting for the industry?
Speaker 6 (17:09):
Absolutely?
Speaker 5 (17:10):
Yeah. I mean, you know, word of mouth has always
been the absolute driver of great success in restaurants, and
the technology that shares that word of mouth will change
and has changed, but that's really how it's always worked,
and now it will always work. People sending out the
word that this place is great, you need to go
and check it out. And yeah, I mean there's a
(17:31):
number of places as I walk up the town where
you see lines. New Zealanders aren't renowned for lining up
for things, but when you get it right and their
high quality and their priced right, and they have that
buzz around them, it's really exciting to see that people
are willing to line up and wait.
Speaker 6 (17:46):
To get the product. It's super exciting.
Speaker 3 (17:49):
Is that something you've noticed as well, Johannah.
Speaker 4 (17:51):
Yeah, I mean Instagram is definitely a go to for meat,
for finding out new places to eat and drink, and
I think it really fills that gap where, you know,
some of these bigger restaurants are the ones maybe get
written about in magazines or online, but you know, the
little cafe or the little hole in the wall or
the little noodle shop. I think Instagram or TikTok, like
you say, is a really great place to shine a
light on those guys.
Speaker 3 (18:11):
Thanks for joining us, guys. That's it for this episode
of the Front Page.
Speaker 2 (18:21):
You can read more about today's stories and extensive news
coverage at enzed Herald dot co dot nz.
Speaker 3 (18:28):
The Front Page is produced.
Speaker 2 (18:29):
By Ethan Siles with sound engineer Patty Fox.
Speaker 3 (18:32):
I'm Chelsea Daniels.
Speaker 2 (18:34):
Subscribe to The Front Page on iHeartRadio or wherever you
get your podcasts, and tune in tomorrow for another look
behind the headlines.
Kielda.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. It's tough
out there for New Zealand's hospitality industry. The rising cost
of living in the past few years has seen everyone
tightening their belts, and the skyrocketing cost of food in
(00:28):
particular has been cutting into people's disposable income, with overheads
increasing at the same time as patrons are cutting back
on their spending. It's no wonder we've seen a series
of beloved bars and restaurants closing their doors for good.
So what's next for the industry and how can these
businesses adapt to changing times. Today on the Front Page,
(00:51):
we're joined by Herald Deputy Lifestyle Editor Johanna Thornton and
aut Hospitality and Tourism professor David Williamson to talk about
the state of the sector and where.
Speaker 3 (01:02):
It needs to go from here.
Speaker 2 (01:06):
Johanna, can you run us through some of the restaurants
that have closed down so far this year?
Speaker 3 (01:11):
Unfortunately there might be a few, too many to name.
Speaker 4 (01:15):
Yeah, there's a few. I mean, I suppose the biggest
or the most shocking was Espequre, which closed in July
after thirty two years. We had Madame George on Kodunghappy Road,
which was a huge loss. It's one of weba's top
fifty restaurants last year. There was also Floor on k
Road as well, which is a cute little wine bar.
Homeland is closed down. Orphan's Kitchen Omni which is a
(01:37):
little yakatory spot on Dominion Road. Stanley of Winebar and Milford.
We also had Conch which was more sort of a
bar and restaurant, the Wine Cellar and Tiger Burger is
another one that's closed.
Speaker 3 (01:51):
God, there's so many. What have some of the reasons
been behind their closures?
Speaker 4 (01:55):
There's a few and Madame George said it was the
economic downturn. Danleyev said that there were a host of
reasons like the pandemic with events and strained economic conditions,
and I actually saw the Restaurant Association reported in a
recent survey that the main challenges businesses are citing is
just customer downturn.
Speaker 2 (02:14):
David, from your years of experience in the hospitality industry,
is this spate of closures unusual or is it kind
of par for the course.
Speaker 5 (02:22):
It's sort of hard to differentiate that it is an
unusual time.
Speaker 6 (02:27):
I'm not sure that number.
Speaker 5 (02:29):
Of closures is particularly different, but I think what is
different is that people are really struggling in this sector,
and I think we're going to see more closures coming through.
I was talking to a couple of veterans from the
industry recently and they were adding to that suggestion of
what's really going on is not just the difficulties right now,
(02:51):
but the history of really impactful changes over the last
sort of period since COVID. So you have to understand
that this industry, you know, was shut down or massively
disrupted for a number of years through COVID, when the
boarders shut they had huge staff shortages. Then you have
those weather events. Just as we're coming out of COVID
(03:12):
and starting to recover from that, we get smashed with
weather events, which was really impactful on the industry. And
then you have, yeah, the high inflation, cost of living.
People have a lot less discretionary income to spend on
things like restaurants, cost of goods. For these industries that
record highs, they are paying top interest rates on any
debt they're holding.
Speaker 6 (03:32):
There's perceptions of higher crime in.
Speaker 5 (03:35):
The inner city for people in Auckland who are coming
in to dine out at night. So you know, there's
an awful lot going on and it's just been one
challenge after another. So a lot of these businesses are small, standalone,
own or operated businesses. They don't have huge amounts of
capital reserves to survive periods like this. So it's not
(03:57):
so much a question I think of, gosh, why are
staurants going down? At the moment, it's a question of
how on earth are they not going down given you know,
the conditions that we've had over the past few years.
Speaker 1 (04:11):
For decades, Aucklanders have enjoyed a long lunch in the
sun at Ponsomby Institution SPQR.
Speaker 7 (04:17):
But now the.
Speaker 1 (04:18):
Doors are shout and that's a liquidation, owing creditors over
two million dollars, yet another casualty of rising costs and
people keeping their wallets firmly shut.
Speaker 2 (04:32):
Johanna, can you explain to us what happened with SPQR
in particular?
Speaker 4 (04:36):
Yeah, well, I mean, I suppose the announcement seemed pretty
dramatic when they said they were closing in July, but
I think it had definitely, you know, the quality of
the food maybe had dropped off in recent years and
it wasn't sort of the hottest spot to be anymore
where it had been in the past, and owner Chris
Rupe just released a really brief statement saying that he
was really sorry for the current situation and sort of
encourage people to get out there and support hospitality. It
(05:00):
turned out they were placed into liquidation with the business
owing more than two million in land revenue and it
owes over one hundred thousand two staff in unpaid wages
and holiday pay. And then The Herald also reported that
the business that Ownsespecure withdrew nearly one point four million
from the business before it went into liquidation. So I
think we're going to hear a lot more about that story.
Speaker 3 (05:21):
It is quite jarring when some of our favorite places close.
Speaker 2 (05:24):
Hey, I mean Peter Gordon's Homeland closed this year's citing
issues with renewing its lease. How often is an issue
like that to blame for a space taking on a
new life.
Speaker 4 (05:34):
Well, I mean I heard that the problem with Homeland
was there's a massive new retirement village going in there
called Cracker Bay. So I think the development of that
whole West Haven area didn't include keeping homeland there, So
I'm not sure how often you know a lease is
to blame.
Speaker 5 (05:50):
Yeah, I think there's a whole range of problems like
that that certainly would finish off a lot of places.
But yeah, again, I think it's a more complet and
a multifaceted number of pressures which brings these organizations to
the edge of collapse. I think what is interesting is
it's such a resilient and it's such an innovative industry.
(06:11):
I often describe restaurants that's extremely nimble, and so you know,
at the moment where you have these raally difficult trading conditions,
hospitality shows up as an area where businesses do suffer
and go down, but when conditions pick up, hospitality is
also the first industry to recover. We sort of go
into recessionary times quicker and lower, but we've come out
(06:35):
of them faster and higher. So it's a very nimble industry.
And Ram's just pointed out in their last report that
you know, there is nineteen thousand, five hundred and eighteen
restaurants still in New Zealand. It's the largest number we've
ever had in the country. The growth has very flat
since twenty twenty three, only zero point one percent growth
(06:57):
and restaurant numbers. But you know, it's not an existential crisis.
We're not going to certainly run out of restaurants, but
it is a very real crisis for the people who
are running these businesses. And there is a risk that,
you know, if we don't get out and support these
businesses and think about how we can address the pressures
(07:18):
that they're facing, that we could lose some more really
good operators. And it is a loss, it's a social loss.
We love these places to go out and enjoy the product.
We have some of the best restaurants in the world.
You know, we just got eight of our restaurants, including
the top thousand restaurants in the world by least last
year in twenty twenty three. We have some of the
(07:38):
best food, some of the best wine, world class restaurants,
great places to go, and we just need to be
careful that, yeah, we don't let these economic conditions damage
this industry to the point that it could really cost
us both in terms of tourism and our social enjoyment.
Speaker 8 (07:58):
The Restaurants Associations report into the state of the set
does show sales are up a five point eight percent
to nearly sixteen billion dollars. The number of outlet's across
the country only rose by zero point one percent. That's
just an extra twenty seven nationwide.
Speaker 5 (08:14):
Definitely going out less, they probably won't splurgs in the
same wine, or you know, they won't have that extra cocktail.
Speaker 8 (08:19):
Pretty Much every single cost that we would have has
gone up over the last few years. So whether it's rent,
whether it's staff, whether it's food, every part of the
cafe business has gone up. We need to raise I'll
turn over by about fifty percent.
Speaker 2 (08:33):
We mentioned some of the numbers of restaurants there, David,
is there perhaps an issue also with us having more
restaurants than our population can sustain?
Speaker 3 (08:41):
Perhaps, and some of these closures.
Speaker 2 (08:42):
Are just a course correction to a more sustainable hospitality environment.
Speaker 5 (08:47):
There is an argument that I've made around that, saying, yeah,
that perhaps we don't need I always use the example
of I walk up High Street and Lawn Street to
the university here, and I counted one time thirty food
outlets on those two streets, and I was going, you know,
if that was halved, would that be a social problem. Obviously,
(09:07):
it's a problem for the people who run these businesses
without a doubt, but it could be a correction. We
could be oversupplied. One of the veteran restauranteurs I was
talking to recently had just come back from overseas, and
I myself was lucky enough to get overseas, and we
were both commenting on the fact that, you know, New York, Milan, London,
(09:27):
some of these cities that we're lucky enough to visit
have these huge populations and fantastic infrastructure to support a.
Speaker 6 (09:35):
Really vibrant industry sector.
Speaker 5 (09:38):
And yeah, perhaps in New Zealand we've got too many
restaurants and not enough people. But I think more importantly,
we're basically constructed an economy which is proving very difficult
to support things like hospitality, things like retail, things like
our arts sector. If people don't have money, you know,
(10:00):
we've got a real cost of living crisis, and people
don't feel like they've got money in their back pocket
to spend, it's very difficult to maintain a vibrant hospitality
and arts and retail scene. So we need some guidance
from I think political areas as well to try and
build an economy that will support these types of industries.
Speaker 3 (10:31):
There's also the going out culture as well.
Speaker 2 (10:33):
Hey, Johannah, do you think COVID and all these lockdowns
have really changed the way we go out?
Speaker 4 (10:39):
Well, I mean, for me, it's made me go out more.
You know, I really want to get out there and
support restaurants, and I really missed not being able to
dine out when we couldn't. But I do think that
for a lot of people, they're reserving dining out for
special occasions, which is fair enough. And we get a
lot of feedback at Viva Magazine that, you know, people
really want to know that something's great before they'll go
out and take a risk. And I think that's where
sort of our restaurant reviews really come into play there,
(11:01):
because people can kind of know that they're going to
have a fantastic time if they're dropping a lot of
money on a dinner out.
Speaker 2 (11:06):
I'm always checking those reviews, by the way before I
go out, So I'm definitely one of those people. It's
not all bad news.
Speaker 3 (11:14):
Is it.
Speaker 2 (11:14):
You've recently, Johannah done a story on some of the
restaurants that have actually opened this year.
Speaker 4 (11:19):
Well, that's the thing. I mean, I'm actually blown away
by how many new restaurants open every year and just
this year there were twenty on my list. So we
had San Ray on Pontsby Road, which is from the
team that brought us Kasidor Restaurant. We've got Bodega Delian Bistro,
which is also on Pontsby Road. There's a new amazing
little French wine bar in Birkenhead called on Pinard. Maybe
(11:41):
the most ambitious new opening of the year is Queen's Rooftop,
which is this amazing rooftop bar on top of one
Queen Street. And also in that building is Advia restaurant
from chef Gareth Stewart, which opened in January. There's more.
There's First Mates, Last Laugh, which is due to the
Tabron's new glamorous spot in West Haven opening this week
at the Marriott Hotel. But I think a lot of
(12:03):
things that these places have in common is that they're
actually from restaurant tours who maybe already have a restaurant
or they've got the backing of a hotel, so there's
a bit more of the knowledge and sort of money
behind them, which is quite an interesting trend I'm seeing.
Speaker 2 (12:16):
What do you think hospitality needs to adapt and survive
or is it fine as it is?
Speaker 6 (12:22):
David No, I think yeah.
Speaker 5 (12:24):
From a lot of the conversations I've had with practitioners,
there's this real feeling that these conditions are driving a
need for innovation and fundamental change in the way that
hospitality businesses run. I think you made a great point
there about the upper end. There are always new restaurants
coming in and the upper end of the markets doing
(12:44):
quite well still people going out for special occasions, but
that kind of middle area every day dining out thinking oh, yeah,
I don't want to cook tonight, so I think I
might just go out and have something to eat. That's
where it's really struggling. And there's been some made changes
around your people drink. Working from home has affected to
lunch trade, transport issues. So I think in order to
(13:08):
be really successful in this type of environment in the future,
there may be a fundamental need to move more towards
that casual, reasonably priced, fast turnover dining where perhaps you
are getting people to come through your place and do
three or four sittings in a night, moving those tables,
turning those tables over to really maximize how you're going
(13:31):
to get your revenue through the door, while the upper
end can do the formal three hour meal, high cost,
great reviews, really expensive thing. Well, that middle range I
think really has to think about moving into that space.
Speaker 6 (13:46):
When I was in Milan, that everyday's space.
Speaker 5 (13:49):
People living in apartments there eat out all the time,
and they will go and.
Speaker 6 (13:54):
Have a casual meal it's reasonably priced.
Speaker 5 (13:56):
And then leave within an hour, and then next person
will come in and move on to that table, and
so wondering whether that will be something that needs to
be really explored.
Speaker 6 (14:06):
But I think people are.
Speaker 5 (14:07):
Going to have to have really sharp skills in terms
of pricing and keeping an eye on costs. It's not
only that costs are going up dramatically, but also they're
really variable, and so if you don't have a razor
sharp eye on adjusting your menu pricing as costs move around,
you can get wiped out really quickly. I think people
are going to have to be innovative about how they
(14:28):
think about alcohol sales. Those have gone down a lot.
People aren't drinking as much as they used to, So
how do you innovate around that? You know, and as
Danny Mayro I said that the curse of restaurants is
it's not one big thing, it's a thousand little things.
It's like a eight sided Rubik's cube. You're constantly moving
and trying to adapt to the market and the changes
(14:51):
going on, and it's very, very tricky. So I have
absolute faith that the industry is going to innovate, survive,
and come through really well. Of places go out, new
places come in. And I guess one really exciting thing
is that you employment's up seven point three percent in
the sectors, so those really brutal.
Speaker 6 (15:11):
Staff shortages are starting to.
Speaker 5 (15:13):
Weaken and we're seeing our whole new generation coming in
to fill those roles, and that will really help with
consistency and getting on in the future.
Speaker 7 (15:25):
The top challenge currently for our businesses is customer downturn,
so that sort of a start contrast with last year
it was rising costs. A recent survey from our members
around how they're faring in twenty twenty four told us
that around seventy eight percent of them are worse off
this year than they were last year, when in twenty
(15:46):
five things will start to get better. Well, that's another.
Speaker 3 (15:48):
Question, Jehannah, what do you think needs to happen?
Speaker 4 (15:53):
Well, I mean I think that restaurants already are trying
really hard to adapt. I mean many of them do
sort of pop ups, labs events, you know, they do
special menus or set menus. I'm noticing a lot of
restaurants opening for lunch on the weekend. You know, they're
really trying to provide something new for their diners, or
they're totally changing their business model, like for example, Sid
Satowat earlier this year announced that he was scaling back
(16:16):
the fine dining restaurants Sit at the French Cafe and
turning it into a Nie, which is more of a
modern Pan Asian restaurant where you can drop in for
a you know, an entrain, a cocktail or have a
big meal, and then turning Sit at the French Cafe
into a smaller restaurant and reverting it back to the
French Cafe. So people are trying to adapt and try
new things to see what will work. So I think
(16:37):
we just got to watch the space really and.
Speaker 3 (16:39):
There's real rise. Actually I'll end on this on social media. Hey,
I'm on TikTok.
Speaker 2 (16:43):
I spend way too much time on tech talk, and
I know I'm probably too old to be spending.
Speaker 3 (16:48):
So much time on TikTok.
Speaker 2 (16:49):
But I get so many good restaurant recommendations from people
on tech talk, and I've noticed around the corner from
my house there's a cafe and I was wondering why
there were lines outside every Saturday and Sunday, and it's
because it was on TikTok. David, do you think that
that's really something quite fun and exciting for the industry?
Speaker 6 (17:09):
Absolutely?
Speaker 5 (17:10):
Yeah. I mean, you know, word of mouth has always
been the absolute driver of great success in restaurants, and
the technology that shares that word of mouth will change
and has changed, but that's really how it's always worked,
and now it will always work. People sending out the
word that this place is great, you need to go
and check it out. And yeah, I mean there's a
(17:31):
number of places as I walk up the town where
you see lines. New Zealanders aren't renowned for lining up
for things, but when you get it right and their
high quality and their priced right, and they have that
buzz around them, it's really exciting to see that people
are willing to line up and wait.
Speaker 6 (17:46):
To get the product. It's super exciting.
Speaker 3 (17:49):
Is that something you've noticed as well, Johannah.
Speaker 4 (17:51):
Yeah, I mean Instagram is definitely a go to for meat,
for finding out new places to eat and drink, and
I think it really fills that gap where, you know,
some of these bigger restaurants are the ones maybe get
written about in magazines or online, but you know, the
little cafe or the little hole in the wall or
the little noodle shop. I think Instagram or TikTok, like
you say, is a really great place to shine a
light on those guys.
Speaker 3 (18:11):
Thanks for joining us, guys. That's it for this episode
of the Front Page.
Speaker 2 (18:21):
You can read more about today's stories and extensive news
coverage at enzed Herald dot co dot nz.
Speaker 3 (18:28):
The Front Page is produced.
Speaker 2 (18:29):
By Ethan Siles with sound engineer Patty Fox.
Speaker 3 (18:32):
I'm Chelsea Daniels.
Speaker 2 (18:34):
Subscribe to The Front Page on iHeartRadio or wherever you
get your podcasts, and tune in tomorrow for another look
behind the headlines.
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