Sunday, 10 May 2009

We're doing it tough in restaurant-land

A hint for those restaurant owners feeling the pinch .

Don’t raise your prices in a vain attempt to recoup more money to pay those bills, especially when you are offering your customer absolutely nothing more for that appreciable price rise!

Over the years I have seen many restaurants start up, trade for some years, then fail, for many reasons. I have noticed a common thread in some I’ve unfortunately visited (shortly before the ultimate end) that the price rise (in tandem with no alteration in menu, a ‘tatty’ appearance and feel to the establishment, items not being available on the night, staff being obviously overstretched, and a general attitudinal difference) is an indication of impending doom.

I feel kind of squirmish and embarrassed to be witness to this scene nowadays, as I recognize it for what it is.

I have dined, within the last six months, at a few places where the signs that were present at meal time told me loud and clear (as for Miss Clavell in the child’s story book “Madeleine”) that all was not well.

Those places have subsequently quietly slipped away, off the dining landscape.

That is so sad. It brings me no joy, or sense of gloating, or “I told you so”.

So the question remains, what the hell do you do when your business is having a hard time? Do you look at your costings and eliminate those that are costing you the most? Do you work more yourself? Do you visit your Bank Manager and chat about it to him? Do you decide to cut your losses and get out? Stressful decisions to make, and an even more stressful situation to be in.

Maybe if anyone reading has some helpful ideas or suggestions for others who may well be in that place, they could speak honestly about it here. Throw them a line, after all, we’re in a global village here.


Anonymous said...

If you can't stand the heat get out of the kitchen.

Anonymous said...

Its pretty hard to add something to Ritas blog without jumping on some other subject so, anonymous, my apologies about moving the subject along! I probably agree with you.

There was some talk about the Bay Hotel formally known as the Dr Syntax. So I had a look.

Fabulous menu, a simple but special wine list a great renovation of what was a pretty tacky pub so in the end everything will be fine.

At the moment though I reckon they should have started off with a limited menu.

Everything we ordered came out a little cold. I reckon the kitchen is under a bit of stress.
After all the place was full so what would you expect with lots of new staff!

The flavours were still great and I suppose if you wanted to take it safe, just order a steak. All of those looked extremely impressive.

What did hit me was the thought in both the food and wine list.

There was a great range in food, you could order some simple dishes such as the fabulous Woodbridge smoked salmon from about $14, and some cheaper dishes from $8.50 all the way to the top end main courses at about $30.

Some fabulous wines by the glass and more by the bottle. In particular the quality of their selection of red wines by the glass would be the best in Hobart.


Anonymous said...

perhaps a shopper docket will get them back in!!?? ;-)

Anonymous said...

We have gone in to this winter with the view to establishing a market share for Summer. This we're trying to accomplish by providing good value for money for our guests. We've dropped our menu prices by $3-4 (so mains that cost $38 are now down to $34), and have invested a lot in staff training and service. Fingers crossed it will work, good feedback so far :)

~that napkin guy again :)~

Stephen said...

Things are going to get very tough as restaurants compete with each other to receive a portion of decreasing consumer discretionary spending.

Anonymous said...

& you'll be ready to say I told you so eh stephen?

stickyfingers said...

Although I'm not a restauranteur, I would expect that the first thing to do would be to reduce the size of the menu so as not to carry as much produce. There are saving to be made this way I'm sure. I don't think punters would mind either and creatively it forces you to focus the direction of your offering.

In Melbourne there is a surge in people having a weekend breakfast as it's an outing with friends that is kinder on the purse, especially as grog is not involved. The venues using quality ingredients are picking up on this and appear to be doing well out of the trend.

The small plate trend is growing in popularity too, allowing for variety while giving a sense of value for money. I have also noticed more fixed price multiple course options that are drawing in punters mid week.

Stephen said...

Anon, restaurateurs have their livelihoods at risk (and sometimes their family homes). While I may not agree with the strategies some adopt in hope of thriving, I nevertheless take my hat off to them for having a go.

sir grumpy said...

OH My God, Stickyfingers. Breakfast out, you must be joking. And meeting other people, where inevitably you'd have to, like speak with them and stuff.
No, no and no. A cuppa and a slice of toast around 11am at HOME will do nicely thanks.
I think it's only trendy wankers who DO breakfasts with friends as an outing.
Go away.

stickyfingers said...

As usual you hit the nail on the head Sir G. We stay in for brekkie, though ventured out for the first time in 18months this weekend and witnessed the boom first hand. Absolutely manic! Shoulder wrestling with cashed up wanna-be-seens.

It was worth it though. We had an excellent meal of sugar cured salmon, perfect poached eggs, avocado salsa, sour dough etc & a Mexican breakfast with fried eggs, refried beans, tortilla and more avocado at Q11 opppsite South Melbourne Market. Spent $35 between two of us. Would have been more if my beloved was a coffee drinker. Reasonably priced by Melbourne standards I think.

sir grumpy said...

Hello Rita, where can Kumar be looking at. There are no other sites near the Beach, unless a property has been bought and changed from residential to commercial.

Rita said...

Sir G - my informant told me it was quite near The Beach, so I assumed it was in one of those shop sites just round the corner. Can't remember the name of that street, sorry.

Anonymous said...

Rumour has it that the owner of the Beach is actually developing another site next door to it and offering this out as a restaurant. Don't know if this got through planning or not.
Jeez, you would have to love your landlord for that.
It is also rumoured that Kumar bought the old citrus moon building in Kingston, could it be that. And Pear Ridge is up for grabs, anyone feeling brave.

Rita said...

That could be the site for Kumar's new venture Anon 7.32.
I am lead to believe Kumar did buy Citrus Moon but as current leasee has contract which has a year or so to run yet, I presume that restaurant option would be a non-goer at this stage.

sir grumpy said...

Those shops would be just takeaways, Rita.
But there is a building next door earmarked as an upmarket grocer which has not found a taker.
Maybe there's been a change of use designation on that.
Perhaps I'll get my dream of a beachside strip of cafes, beer gardens and restaurants right along Blackmans Bay Beach.
If we all keep burning forests like the forestry mob and global warming comes quicker, it could be the sub-tropical paradise on my doorstep I really deserve.
PS, there was a ``Hill Street Grocer'' style, i.e. upmarket, shop touted for next to the Liquor Barn at Kingston but that seems to have fallen through.
Maybe it's these straitened times. Shame but.

Anonymous said...

Yes that deal fell through, personality clash we hear. Also Cornelian Bay Boathouse up for grbs.

Anyone know of anymore?

Rita said...

Thanks by the way to Napkin Guy and Sticky who provided us with some sage advice about things you could address as an owner of a business in distress. Great to hear from you again Sticky.

Anonymous said...

kingston neck of the woods has recently aquired anew pizza shop, a souvelaki hut, a dominoes pizza, a malasian takeaway, a bread shop, takeaway charcoal chicken, sushi and is getting a guy who is best known for cheap pizza, wine, and pasta. whoopie doo, kingston and blackers, you like your immaginative food, no wonder trhat grumpy pommie stays at home eating toast.

sir grumpy said...

Yeah, but with marmalade, anon, come on be fair,

Anonymous said...

Its a hard subject to approach dispassionately Rita but I will give it a go without the impossibility of going into too much specifics.
Firstly a few hard facts;

1. Suppliers are not reducing prices.Partly due to a few controlling the game.
2. Landlords, still upping leases, no price freeze from them.
3. Wage demands, only going up.
4. The monopoly that is power, aurora etc, all going up 20% plus.

Now take a look at those facts, add into that the cautionary spend of the discretionary dollar. Scary picture, right.

Well it does not have to be.

On a purely personal note I look at those places cutting prices to attract customers and shake my head, I feel for them but... without sounding trite, it dissapoints me.
I learnt my craft during a particulary bleak recession, their are ways to come out on top and we were planning for this last year.

All this to the casual observer with possibly their balls in a vice right now is bullshit, but its not for me to go into the specifics of what you need to do.

But for what its worth, try the following:

Be tough with your suppliers and negotiate, if they won't come to the party then fuck them off, and go shopping as near to the source as you can, get freebie samples off the bastards, trust me this works.

Get immaginative with offcuts and vegetables.

Don't skimp on the good stuff, just negotiate the price.

Whether you are a cafe or a restaurant, a tray of biscuits costs less than $3 to make 30 give this and freebies to your customers they will love you for it ( you can get creative with this).

Reward your regulars.

Sit down with your staff and over a cooked meal explain that they are as much a partner in the success of this business as you are. You are like it or not a family, you will depend on eachother.

A customer, no matter how painful, is a bill paid, treat them w3ith respect.

If your going to advertise, make a bang not a pop. No-body remembers a small bang, everyone remembers September the 11th, if you take my point.

Beware of naked men offering you their shirts. If it sounds too good to be true it is.

Be bold, if your suffering at the moment with bills etc, ask your landlord for a break. Fucking tell them, its more expensive and costly to screw you on the lease legally than to let you have two months reduced or free, and piss off on an increase in rent, recession applies to them too. If your nervous don't be. Just remind them, if your struggling, who do they think is coming in next, plus its a pain in the arse to fight you.

I'm not going to advise on recipes its too personal, but cut back on the expensive and make the most of whats available to you.

Theres more, but part of me says after 20 years or so, survival of the fittest, but to anyone with their balls on the line right now, think carefully, and if its time to pull out, do it before the debts mount up.


Rita said...

Thanks Cartouche. As usual, a considered response from you. But I did notice that there are a few things there you point out which I consider should be observed at any time, not just at times of recession. The fact that your customer represents a bill paid is surely an obvious point, and that should be the main thing pointed out to staff in any customer service environment, and has got to be the over riding ethos under which you operate a business.

I am at a loss to understand why people just don't 'get' this. No matter what, you need that customer base coming in the door to pay your wage and keep the business going. It seems obvious that if the customer base have a good experience there, they'll return. Simple as that. If they have a shit experience there, they won't. Equally as simple.
But, yes, it obviously is worthy of mentioning as so often it doesn't seem to happen like that.

Stephen said...

Also, beware knee jerk reactions. When your accountant points out that labour is your biggest ongoing expense, don't immediately go and screw over your staff.

I know of a couple of establishments in north Hobart who did the dirty on front of house in an endeavour to cut costs. The happy mood swung strongly negative, smiles were forced, experienced staff disappeared replaced by pimply teenagers and the customers picked up on the change. My guess is that the business lost a fair bit of trade because of it.

Stephen said...

oh, don't be scared to cut your prices on slow days. If you're going to be trading anyway you might as well fill as many tables as you can.

For instance, Kaos does a $10 Sunday night roast. Its stripped down to the basics, but it gets bums on seats and most of the punters will buy high margin alcohol and desserts while they're at it.

Anonymous said...

Stephen, you said:
"When your accountant points out that labour is your biggest ongoing expense, don't immediately go and screw over your staff"

If you have to cut staffing hours its not always about 'screwing them', its about saving money. Sadly no matter how nicely its done some of those with reduced hours can feel resentment toward this decision. Is the employer in the wrong? No. Are they 'screwing' the staff, I dont think so. They are making a difficult decision & one that I dont think they particularly enjoy.

Stephen said...

Anon, I agree. That said, if staff think they've been screwed over, then the effect is the same.

Anonymous said...

Yes Stepehn but the sympathetic ear will tend to side with the aggrieved person who has had their hours cut, even though the business owner is not really doing anything 'wrong'. However they are portrayed as uncaring or as you put it 'screwing over' someone. I dont think this is a fair assessment of what was an obviously difficult decision to make & frankly until someone finds themselves in this unenviable position, they could not possibly understand all of its implications.

Anonymous said...

Just about anybody working in hospitality is being screwed over by the owners.
Let alone when being ``let go'' or ``reduced''.
Wages and conditions are awful.

Anonymous said...

last anon.
Just about all, restaurant owners are just plain c_unts, aren't they!
Wages & conditions are awful-get a grip, isnt it about looking after orthet people & this is not for everyone.
When will some of you anon morons get it? Forthermore if the wages were piad higher wuld you also pay the extra cost on your mealno you wont thats for sure

Anonymous said...

To the references of being screwed by employers. Try and consider this.

Employees have protected working rights by law.
Holiday entitlements
Long service awards
sick pay
Minimum pay levels
overtime penalties
A limit on your working hours
health and safety
employee liability
maternity leave
unions and governing bodies
guaranteed wages weather the week was bad or not.

The list could go on.

Try to remember that an employer has no rights or entitlements what so ever. Nothing. No protection, no minimum pay, only penalties if your lucky enough to be successful. Tough shit if we get ill. No retirement benefits. In fact it would seem not even our employees give a shit either, labeling us a bunch of greedy un-caring bastards.
Thanks, I'll remember that next time my daughter is let down when daddy has to work through because you have a hang over, or I don't get paid for the week because you switched off the freezers and destroyed the stock etc.

You see always two sides, which one sounds better.


Gandhi said...

A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

Mahatma Gandhi

Rita said...

Mahatma - glad to see you risen from the dead in order to provide us with those extremely sage words of wisdom! And I agree with you totally - but please believe me when I say that there have been known to be a few customers who actually are at variance with your standard customers and who prove to be totally unrealistic in their expectations, and unreasonable with it.
These are the ones who make it hard for workers to maintain their usual level of fine service.