Why our restaurants are shutting their doors
SKY-HIGH wages and electricity costs as well as unsustainable food discounts are forcing many Queensland restaurants to the wall.
It can take just one bad season for some to go under and this year has already seen a host of top restaurants fall from increasing financial pressures. Esquire, Madame Rouge, The Survey Co, and Mariosarti have all shut their doors and industry experts warn they won't be the last.
"The profit margins are quite thin in the restaurant and cafe sector because they have a high cost base, so there's often not a lot of buffer in the bank to see them through a bad year, or it might just be one bad winter and there goes the business," said Restaurant & Catering Australia CEO Juliana Payne.
Ms Payne said the Queensland dining scene was finding it particularly tough at the moment as softer economic growth left people with less money to spend on eating out.
That problem was even worse on the Gold Coast where the Commonwealth Games caused many locals to flee the city, while the promised tourism dollars failed to land.
"It's one-off things like that, where a conjunction of events is the thing that leads to people tipping over the edge and they can't make ends meet," said Ms Payne.
Last week acclaimed Fortitude Valley French eatery Madame Rouge closed its doors after owner Mary Randles - the partner of well-known Brisbane chef and E'cco owner Philip Johnson - decided not to renew the restaurant's lease, citing stress and trying to regain her work-life balance.
"The demanding hours of working a restaurant, it takes its toll," she said.
Ms Randles said the business had been struggling financially, pulling in large numbers on weekends but unable to maintain them earlier in the week.
"At the end of the day all I was getting out of it was a wage and so, for the stress involved, it's not worth it when you weigh that up," she said.
The restaurateur blamed the high wage costs needed to employ a quality team, but said she didn't know how to avoid it.
"Labour costs are huge and that's the downfall of many restaurants, that unless they're busy every day of the week it's kind of hard to keep them running and keep the doors open," she said.
"But the hours chefs put in versus what they're paid … these guys can't really survive on getting less money, so I don't know what the answer is there."
She said electricity prices had also hit the restaurant hard, with her bill tripling in the past year.
However, Gold Coast restaurateur Shannon Baier-Fry, who was forced to close his celebrated Palm Beach restaurant 8th Ave Terrace last week, said the problems went beyond electricity and wages.
"I think that public expectations of value for money is sort of being muddied a little bit - made more complicated by people feeling these pressures and then undermining their own value by doing food discounts, that sort of stuff. Or not putting their best food forward, to combat these extra expenses," Mr Baier-Fry said.
"They might want to cut expenses so all of a sudden they're importing seafood from overseas, they're getting cheaper cuts of meat, they're undermining their product and then they're putting something out for cheaper.
"It might attract more people but all that does overall is change the public's persona of what they're getting on the plate. 'Why go here when I can go there and get it for cheaper?' But there are a lot of things that contribute to that being the cheaper price on the plate."
Celebrity chef Neil Perry, who is also chief culinary officer of the Rockpool Group which has multiple Queensland eateries including Sake, The Bavarian and Burger Project, said the restaurant industry was among the toughest financially.
"It's so hard for people to understand what it's like when you wake up and you know that at any stage the bank could pull the rug from underneath you. Or six months of poor trading, you could lose your house or indeed just about everything in your life," he said.
"Young people particularly or young people involved in their own business have an extraordinary amount of pressure on them. It can always lead to mental health issues if it becomes very dark and dire. Sadly for a lot of small businesses, that happens often."
Mr Perry said it was important to look after hospitality workers who are in a pressure cooker environment, particularly after a recent spate of chef suicides both here and overseas.
"The thing that we're very focused on in the restaurant industry is the, 'Are you OK?' movement. It's all our responsibilities to make sure that everyone's OK," he said.