An Anonymous commenter wrote the below in response to my last posting about the employer who is treating his staff to a royal time in Melbourne this coming weekend:
It is time we had the blog about the health of the industry - things like this point to an industry in crisis. The staff shortage and the race to the bottom as establishments try to make up the lost ground because of rising food costs electricity etc... and the decline in patronage. Not gloom and doom but reality. Not a prediction but reality - customers will have to adjust to paying higher prices for anything of quality. Ask the waitress in your local cafe how much they pay for butter - its just about doubled in the past year. Bread, milk and eggs have had significant rises as well. If the meal is cheaply priced then the produce is likwise. Free range eggs and meat cost more so expect to pay more.
Well said, Anon. It's logical really, isn't it?
Tuesday, 5 February 2008
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20 comments:
I suppose we'll have that local hospitality ``spokesman'' (can't remember his name) saying we'll have to have guest workers on lower pay to bail us out.
That'll bring down wages in the long term and locals will be worse off and certainly unable to eat out much.
Can i print this out and plave it on the front doors of my restaurant?
Food Nazi!
Rita, at risk of sounding like a 'I told youse so' person, this has been brewing for a while now.
We MUST pay more for food at restaurants. BUT as Sir G & others point out fairly, we must also get better food & service for it as well as paying for these rising costs..
If we dont, then to take another leaf from sir G's book, we might as well absorb the rising food costs by eating at home all the time?!
Sir G - I don't know about that, but guest workers is not the answer!
Food Nazi - feel free to print it out and put it wherever...
Gobbler - it's fine to say "I told you so". I DO think we will have to pay more to eat out. Think about it - interest rates go up; landlords will want more rent for their premises; food costs rise due to many reasons; wages rise; staff get scarcer; employers will need to offer more pay etc to entice workers to their workplaces and so it goes on.
Yes - it'll probably be a case of survival of the fittest (for 'fittest' read 'smartest') in restaurants, and it'll be way more expensive than now - or the alternative: eat at home.
Very timely Rita. I have just spent the afternoon with my arch nemesis "THE ACCOUNTANT" and her side kick "BOOK KEEPER WOMAN", you will be pleased to know that the chicks are kicking my arse again.
Its true, electricity is up 16% and another 4% in june so 20% or for me an extra 100 bucks a week. Milk 15%, butter 40 % staff 15% fruit and veg DO NOT START ME ON FISH. They tell me about the drought on the mainland, Oh really, this is Tasmanian fruit and Fish have plenty of water, do I look like I was born yesterday.
The suppliers are amalgamating into single monopolies, electricity is a monopoly. "Where are my free samples, I scream at reps, my free tickets, inducements etc, don't you like me?"
Look, its been one of those days, and it realy concerns me not that my prices are rising, but that other people not savvy enough are sending out the wrong message by cutting prices believing they will survive. I have a message for them " I survived the 80's, price competition is the way to doom, you just work harder for less."
Its true, raise the bar, charge more and the public can see what they are getting. At the moment the cheaper goods are in high demand, thus their price is rising. Some of the traditionally higher table products are in lower demand and the price is attractive. Therefore you can offer higher quality, and still make the same margins, whilst giving people more percieved value for money.
End of rant, I am still a knob head and my two female accountants have said as much.
I don't see why you are a knob head cartouche. At least you are enlightened enough to have this very real awareness of things both past and present, so whatever decisions you make now and in the future, you are doing what you need to do to survive. Your figures are indeed startling, and selfishly I am so glad I too am not faced with these costs in todays economy.
Looking at what you've said above, the situation here is horrible. Presumably you do what you do because at the root of it, you love the career you've carved out for yourself. All this other peripheral 'stuff' seems like barriers to what should be a fine path in life to tread. What price the priviledge to work at your livelihood?
Hi All,
Just me, lurking again. I have a question - and this is not meant to inflame anyone.
Being someone who does not work in hospitality - what exactly are the typical percentage breakdowns that lead a restaurant to charge whatever price for their dishes?
And how much of this is what I fancy to be 'ambiance' charge? (i.e. paying a WHOLE lot more for a similar dish at a more upmarket restaurant?)
Cheers,
Amy
its a downward spiral isn't it... chicken little may say the sky is falling in...
Rita and the pin stripe suit chicks are right... its about getting smarter... creative... responding to staff value/needs like our weekend in melbourne friend is... the true value of feeling valued and important can not be underestimated...
btw... i was talking to an olive producer this week in the derwent valley who told me that they have now had less rain over the last 10 years than a certain magic number of millimetres (cant remember the figure) which officially makes her property 'desertifying'. I said, that sounds really yummy! The moral of the story here, is that we should also be expecting to pay more for Tasmanian fruit, veg and produce (mainland and international buyers are probably prepared to pay even more than we are).
at least you/we are talking about how to fix it...
I think the same lessons apply across the board, not just in hospitality. A lot of small business struggle with rising costs and a shortage of appropriately skilled workers who want to stay in the small pond. Add to that that some skilled staff just like being portable - they have no intention of staying 5 years in the one job, let alone 50!
But back to cheap meals...there are a lot of places in tassie trying to be all things to all people - extensive confused menus that cover too much ground. I can understand the need to appeal to the broadest demographic - but not that broad.
Salt is a very good example of a cafe/restaurant that has a small menu - a few things - core and specials - that they do reasonably well. I imagine the places that offer pasta, steak, seafood, roasts, risotto, curries and wraps all on the same menu are throwing out a heck of a lot of food (or~ shudder ~ the food is recycled or frozen 'fresh')
Come easter, the business will get tougher as customer numbers drop. Some will hit the wall, but inevitably there will be a cashed-up superannuant or seachanger waiting to jump into the breach.
I guess at a personal level, all I can do is keep going back to the places I like that serve good, fresh food at I price I can bear.
I think your previous post about the canny boss rewarding his staff with less tangible things shows some real insight, but I still don't think it will necessarily put bums on seats during winter..
It's a perpetual dilemna, isn't it Rita?
When I opened the lid I was not having a go at the employer looking after his staff but trying to open a few eyes to see the truth. It's very important to look after staff as they are the single most expensive component of a food establishment.
Clever and smart operators have been looking at ways to value add the experience that customers have when dinning in their establishment. My philosophy is to start with good ingredants and build on that. They cost in some cases 60 - 70% more - ask yourself 'can I tell the difference between free range eggs and caged ones" very few people can, but I don't believe anyone should use caged eggs - so our customers pay a premium for us to claim the moral high ground, another way of looking at it is that we lose the the profit margin on that dish.
IT IS more difficult for establishments to make money, they are getting cleverer, but the rise in external costs, electricity,interest rates,tax's,rents are all slowly strangling many business in this fare town.
Food cost increases are out of control, as I said take butter - on the 16/1 we took delivery of 25kg of butter cost us - $129.04; today same product and quantity $191.91
Can anyone tell me how I can past on this massive increase in cost to the customers.
Not the sky falling in but any marginal business having to cope with this level of increase continually are on a spiral downwards.
Rent increases in the two main food areas of hobart will eventually remove all the small operators. It is now fact in this industry that only business's of 100 seats or more can obtain the margins required to produce a return on the investment.And return on investment is what it is all about.
Not gloom and doom as it's already happening - chain food establishments already outnumber small establishments in the hobart cbd. They have centralised production kitchens with minimal production on individual sites. Clever yes but run by accountants, cash flow and margins.
Creative food can't survive easily unless it generates a return like that above.
Enough of my rant - I need to serve a valued customer.
cheers
cold room
Maybe I'll have to come to terms with the fact that I'm in a SMALL minority who would pay a bit more for my eating out.
I repeat, not just to cover your higher costs (staff, ingredients, rent, power), but also to cover a higher PROFIT margin.
I want as many of our eatereies to thrive, not just survive, as possible.
I know if a restaurant owner is earning a good living he will most likely pass that good feeling down the line. That shows on the plate in most cases.
Now, let me see, will it be Maccas, KFC, Pizza Hut, Dominoes, Subway or Nando's who will lead the charge to better tucker.....it's a frightening thought that in a huge shake-out that's mainly what we'd be left with. Scary.
I second Sir Grumpy but very correct,
Not that I'm not having an original thought but I do so agree with him. I would hate to lose any of our varied eating establishments.
I only run a high school canteen, but preparing to go back to work yesterday the first thing I had to do was put our prices up.
After going through the price rises from our suppliers it was inevitable. We try to keep our prices as low as possible for the students and staff so I found it really hard to do this, especially by so much. Last year our bread price was increased by 50cents a loaf on a $2 loaf of bread.The price increase on dairy products has been unbelievable. Potatoes and most other vegies the same.
I too have heard "the drought" excuse so often.
I've spoken to a great friend of mine from Deloraine who is actually a farmer. His reasoning is not so much that the drought has caused this as much as, because of increased production costs, the suppliers wont pay the farmers the price they need to make the product viable, so the farmer has just had to stop producing it.
A sad and sorry situation all round. But anyone out shopping for food can surely notice the increase and realise that in all food service areas it must be passed on. It's just a fact.
My god! It seems like our Anon, cold room, has really opened the proverbial can of worms!
It looks like we really will have to seriously consider carefully when we buy food items, and when we go out to dine.
I thank you so much cold room for providing us with an actual dollar figure to use as an example. Looking at your butter example graphically illustrates the point - 16/1 - $129.04 for 25 kg butter; 6/2 - $191.91 for the same. That's bullshit! How can any restaurant sustain rises like that?
And I love your point about the difference (or not) of using free range eggs. I wish I knew which place you're referring to, as I really only want to go to eat at places where that is the way they think and act.
Kitty - thanks for your contribution, ditto Sir G & Christina.
Amy - I think Gobbler has spoken about how/what/why they mark up on food item costings - and hopefully he'll read this and respond to your query - or someone else who's a chef/menu writer/bean counter.
It's not looking too flash for dining out in Hobart, is it readers? We'd best hasten along to our faves while we're still affluent enough to afford it, and before they are forced to close down!
Oh, no, I can't go back to marge...my wife might find out.
I'm a nutter for butter and ghee. Those and middling classic olive oil are my cooking mainstays, with coconut oil too.
I must pay more attention to the bill at the supermarket but I can't go back to marge...
PS I hardly even noticed the hikes in petrol prices. It was always the same price at my local servo. I asked for 30 dollars worth and it always cost $30...what's all the fuss?
steady on guys ... its a wake up call only. Question what you eat and try and relate it back to the cost of the meal. Quality costs but thats ok if you are prepared to pay. Otherwise that dim sim is looking pretty safe.!
Good food will continue to come out of this town,
I am sure you all want the impeccable food service but things have changed. We now have a generation of young not so well trained staff coming onto the scene - it's our own fault we stopped training people many years ago. Hence the adverts in the local rag requesting a super human trained in every aspect of service and coffee making with years of service behind them - they are now few and far between. Who's fault ....ours we didn't do it when we could.
When you next dine out take a minute to think why the establishment is like it is, maybe the poor service or so so food is a reflection of the hard times. Not an excuse ...
Well thats my rant - just remember that their are many more places on he market that those in the real estate mag. Many run by very experienced people.
It's a hard life and not always profitable (not money).
Ive closed the Cool room door.!
Sir G - you're such a dick! You and your $30 petrol! Apart from that, I'm totally with you re the butter, and ghee. NO WAY does marg ever pass my lips! Disgusting, revolting stuff. Ghee I always use for cooking. Love the flavour it gives my food. Totally different to oil of any kind.
Cool room - thanks for your worthwhile contribution to todays discussion. It was great to have your take on the state of play today - broadcast straight from the cool room!
G'day Amy, in response to your query its a fairly fast & loose rule to be honest.
The old way was to charge at least two thirds on top of what you paid for the food items. This was supposedly to cover the ingredients, labour & everything in between.
These days however there are far more associated costs involved.
When you have an a la carte menu you will carry & prepare stock that may not get sold, if this is wasted then it is added to the cost of goods. many menus work this unpredictable cost into the prices.
Also a good menu will have a range of items that span from the most expensive to put on, say a pigeon for about $12 a bird to a dish featuring mainly vegetables costing you about $3 for the primary ingredients.
The trick is that to keep the cost of the pigeon dish low enough to still appeal, you'd be inclined to not use too much labour in preparing the dish. Conversely to add value to the relatively humble vegetable dish, you might be inclined to spend a bit more time on it.
These measures are designed to 'balance' out the overall costs of your menu.
Interestingly though many places dont employ a calculated science to charging & even though they might have years of experience it will be a 'gut instict' that determines their final charge. They will just 'punt' on what the customer might be prepared to pay.
They'll go, 'Entrees mid teens, mains early thirties & desserts around thirteen-ish'.
As to the 'ambience' you referred to, well that is the most elusive of all intangible & enigmatic characteristics that set one place above another. The day somebody trully distills its essence will be the day that they become extremely wealthy!
Gobbler is right with what he says here Amy. From a personal prospective I tend to try and make the dish I want to, and then through gut instinct chuck a price on it. But I caution its more complicated than that.
Another way is to work out your overall costs and work out a realistic turnover of covers during the week and then ask yourself what you need to make in order to cover those costs and include yourself as a wage. Many owner operators mistake their own time as free. If you do this it will be.
Simple example, you have two wait staff costing $34 an hour a chef at $20ph bar staff at $17 kitchen rat at $11ph. That basic set up with a fixed power cost of $40 and rent of say $100. You are open for 9 hours.
Total cost $837 wages (plus super etc) $140 fixed costs total for night $977.
You have 50 covers.
Assume you serve 30 on a weekday, choc at the weekend (but remember the staff are dearer at the weekend).
You need to be aiming for an average spend per head of around 60 - 70 dollars, importantly not all of this is food, remember the vino.
But you also need to remember insurance annual leave, leave loading and lots of etc etc. to boring to go into, depreciation blah blah.
The point I was making I think about ingredients, is that eye fillet is up about 20%, you can charge 30ish in fairness for a decent eye fillet meal (the 60-70% mark up and make maybe 20 or so bucks gross and then minus your costs). However Crayfish prices are more attractive as a sale. They have remained a little more stable. $35-50 for a cray, $75-90 bucks on the table. You take less percentage but more in real dollars, and people expect it to cost more.
In some respects this is what I was inferring when I talked about raising the bar and using more expensive ingredients and uping the quality to improve the margins.
Bit of Garralon cooking at the table helps a bit too.
Thanks Gobbler and Cartouche - curiosity was all :)
Being a self-employed person myself, I find that having to put a price on something is not only incredibly difficult, it is inherently dictated by the market.
To charge an hourly rate for what I do (live music) is so hard, it tends to be more of a 'gut' thing. And it will never cover the basic costs. (sob sob starving artists etc).
I must add that I'm surprised wait staff are paid considerably more than chefs.
Amy
Hi all, just thought I would post my views on the downward direction we seem to be heading in.
I'm a hospitality worker, have been all my working life. i have worked in many of the "better" establishments around hobart and have taken a deep interest in the lack of understanding that both customers and some hospitality workers have with the industry.
Thankyou amy for noting for one thing, that chefs are in general paid considerably less than waitstaff. In general hospitality staff are paid LESS than many other professionals... i say professionals because those of us that have a passion and love for what we do are professionals.
Chefs:
for a Chef to qualify they must endure four years of training (an Apprenticeship, equal to say Uni). Four years is not a long time really, especially when you are looking at a life long career.
However to be employed Front of House, you need no real qualifications... well nothing major, gone are the days when you were trained for years to wait a table and give proper, discreet or otherwise service on tables...
Nowdays a RSA Certificate and the ability to carry two or more plates is good enough.
To sum this up, in two weeks i could get a job waiting tables and earn a minimum of $15.00
per hour, where as a first year Apprentice chef starts on $7.00 per hour, this wage increasing by a percentage over the next 3 years until at a qualified chefs wage (about $15.00 and hour award)
To be a chef your either stupid or bloody passionate about food and hospitality.
Most chefs are paid a salary (40 hrs a week), They don't get overtime or penalties in general and may end up working in excess of 55 hours a week... as i said, stupid or passionate.
Compare this to a waitperson, paid hourly, with penalty rates. or compare this to say any other worker in another profession, they wouldn't have a bar of it... but its ok.... ITS NOT OK
enough rant about our undervalued, overworked hospitality staff and on to the establishments and customers.
Costs:
Over the last few years basic costs have increased substantially, as many people have previously posted... any dish on a menu is generally priced so that the total cost to produce the items is 33% of the value listed, or as close to as possible.(e.g Duck Breast $30, would cost about $10 to produce) the 33% should cover all costs like base food, wages for the tome to create, electricity, gas, waitstaff to serve, washing of the plate after e.t.c.
Customers need to understand these costs and accept price increases, sure money is becoming harder to come by and even harder to hold on to.. interest rates, living costs e.t.c are all increasing.
I believe the main problems in hobart's restaurants are caused by the customers, in a chain effect. Establishments are scared to "overprice" (or price correctly) incase we scare customers away.
Accept costs are rising, and understand that by refusing to pay the appropriate cost for items you are destroying our establishments.
Less money coming in with higher base costs, on top of staff costs makes less profit, which after time causes a business to close or CUT COSTS.
there are several ways to cut costs, each delivering the same result... LESS QUALITY.
we can employ staff with less training that accept lower wages, put them on as trainee's and leave them unsupervised... take on apprentices and leave them alone at times to run the kitchen, be it for an hour or for a breakfast or a lunch shift. Or we can cut down the quality of our food, cut the quantity of staff we employ (making service slower and less attentative).
all of the above are becoming more and more common place in establishments all around hobart. which leads to customers being unhappy and not returning, which makes these situations worse again.
It seems to me that we are falling in to a never ending black hole of a failed system.
Thats all i have the concentration to type tonight, hopefully some of it makes sense.
What happens when our passionate food and wine loving staff have had enough? when those that stick at it because they love it decide that a call center will bring in more money to cover living costs? we are all human here.
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