Challenging. That’s the adjective you hear most from bar and restaurant owners describing the business climate in Christchurch.
But while a steady stream of places have pulled the plug or had it pulled for them, more doors are opening than closing as the industry continues to grow.
Last year Canterbury had a five per cent rise in the number of food and drink outlets, the second highest in the country.
In some instances new owners have come in to reopen the doors of businesses where previous owners hit financial trouble.
Industry leaders say some outlets will struggle while they all wait for venues like the convention centre and stadium to bring in punters, especially over winter. As the rebuild drags on, they continue to wait for more tourists to come and the number of inner city residents to increase.
The industry also faces competition in the form of global trends such as restaurant home deliveries and foodbag-type services.
Successful operators in Christchurch say they have to work hard, keep up with trends, and remain positive.
Richard Sinke has been 40 years in the business and has expanded from owning Dux De Lux before the earthquakes to now having four venues.
“This is a really tough time in Christchurch for a lot of people in the business – the economic drivers that attracted a lot of us to reinvest in the city haven’t even eventuated,” he says.
Like other operators, Sinke is settling in for a long winter with fewer tourists about and locals hibernating or holidaying overseas.
Sinke says trade will get a boost when the convention centre opens next year with dozens of conference already booked, but other delays with the stadium, cruise ship terminal and inner city housing are causing problems.
“People get all negative about the stadium but the need to understand it will be a huge driver of the economy and taxes,” he says.
“Hospitality is a huge employer and a huge generator of GST and income tax. Restaurants are literally tax collectors for the country.”
EATING OUT ON THE RISE
Figures from the New Zealand Restaurant Association show more than 17,000 outlets sell eat-in and takeaway food and drink across the county, employing 130,000 workers.
And Statistics New Zealand banks card figures show how much eating and drinking out is on the increase while grocery spending falls.
In the year to March $12.6 billion was spent eating and drinking out nationally, six per cent more than the previous year, and 12 per cent more than two years ago.
Among new places banking on the trend will be the Riverside Farmers Market, due to open later this year with a large number of both eat-out and eat-in options.
Lisa Levy, the Restaurant Association’s Canterbury president and co-owner of Hereford St restaurant Inati with her husband Simon Levy, says hospitality struggles are not new, and not just local.
The association has identified the top challenges faced by businesses nationally as the lack of skilled employees, managing wage costs, and attracting and keeping patrons.
It says successful businesses hone and deliver their product well, embrace changing consumer dining trends, and keep up with new technology.
Levy says among the casualties in the industry have been operators growing too big, too fast.
“Nationally and internationally we are seeing a lot of companies fold. We’ve seen a lot of businesses expand because they have been successful, and sometimes it doesn’t work,” she says.
Owners need to be in their business “all the time you can keep an eye on things”, she says. Many businesses are family owned, and this can cause pressures which take their toll, she says.
“It’s a challenging industry in Christchurch, we’re all trying to make it work”.
She says that for many it is a lifestyle they do not want to give up.
“It can make or break you but some people have been in it for a long time and people love it.”
While at-home options may be luring some patrons away, socialising at bars and restaurants remains popular “because that’s how we keep in contact with people, Levy says.
Sinke, who operates Dux Dine, Dux Central, Terrace Tavern and Poplar Social Club, credits experience, a positive attitude, and “a great team” for staying the course.
“It’s really difficult to get good staff and managers because there are not enough good hospitality staff in our city, but you can’t achieve it without a great team behind you.”
He says they rely on overseas staff and would like to see longer working visas for hospitality workers. At the same time he denies the industry underpays.
Wages are improving for staff with “a few years’ experience under your belt and good skills”, and senior staff can earn $28 to $35 an hour, he says.
Among the essentials for operators are keeping up with patrons’ changing tastes, and watching costs and prices.
The market is “very price conscious” and some foods such as blue cod and other seafoods can be too costly to put on the menu.
While he is a long-stayer in the business, he sees “the young guns” coming in with fresh ideas. Shared plates and more casual dining are very popular, and attractive premises are a must, he says.
“It is very important to have the whole package – something interesting, exciting and different from the home environment whether it’s an ethnic, contemporary or industrial look.”
The fit-outs have become very important, but the cost of them is increasing, and so are the consenting and regulations costs,” he says.
Another must-have trend is sustainability and knowing where food comes from and how it is produced – “people are more interested in that now”.
Peter Morrison, the Canterbury president for Hospitality New Zealand, says that while winters are difficult, business owners will be keeping costs down where they can.
A recently launched Air New Zealand and ChristchurchNZ campaign aims to attract Kiwis to visit Canterbury, and this should be a big help in boosting visitor numbers, Morrison says.
“I think most people are feeling pretty positive.”
Smash Palace in High St began in a bus on a vacant lot.
The loss of older buildings and the higher rents in new buildings have also got the blame for the struggles faced by the hospitality industry in Christchurch.
However Levy believes that while rents are higher than pre-quake, there is some good news for operators.
“There are spaces sitting vacant under new office buildings – savvy operators are negotiating with landlords.”
More attention is also being paid to the staffing shortage, she says, with apprenticeship programmes more popular around the country.
She would like to see more training to put the industry on a more professional footing.
“We need to recognise hospitality as a profession – they do that overseas even in Australia. It’s an industry that takes a lot of skill.”
As the recent string of liquidations attest, money is a problem for most of the Christchurch restaurants and bars that have closed their doors.
Sinke believes a lot are under capitalised, partly because getting finance is not easy.
He has seen many operators borrow money from their families because they cannot get it from the banks.
“Bank lending tight, hospitality raises a flag with them because some businesses are failing. “
He says he feels terribly sorry for those who have “put their heart and soul into their business and lose it”.
“Things will be tough for another couple of years, it’s a trying time. “
In the meantime, bar and restaurant owners are encouraging Christchurch residents to help them survive.
Morrison says that while businesses are tightening their belts for the winter, they need customers coming in through the door.
“People need to come out and support us, even if it’s cold.”