Time to turn the tables

Anthony Dennis reports on the challenges facing Sydney restaurateurs as a dining out campaign launches.

It used to be that winter was the season of our dish content. Cosy nights over a fine glass of red, savouring superb seasonal produce expertly cooked by our favourite chef.

But this year feels different. The chill winds of a so-called two-speed economy, combined with large helpings of fiscal uncertainty, have led to seemingly too few posteriors warming cold restaurants seats, resulting in an unprecedented number of restaurants going into administration or out of business.

Of course, the Sydney restaurant scene has always been subject to the vicissitudes of the prevailing economic climate, as well as the notoriously contrary tastes of the rarely loyal dining public.

But, this time round, as it eventuates, it's not just too few diners or too many establishments, but a combination of complex factors that have forced stellar, Good Food Guide-hatted chefs such as Justin North, Matt Kemp and Dietmar Sawyere to the brink, and worse.

So, who and what are killing off some of the great restaurants of Sydney? Neil Perry has endured his own ups and downs in the mercurial restaurant trade but has managed to survive and seemingly thrive. He says  he ''suspects the market is already deciding'' in respect to whether the city is host to a surplus of restaurants.

However, John Hart, the chief executive of Restaurant & Catering Australia, the industry's peak representative body, says that far from a problem of insufficient numbers of diners,  Australian Bureau of Statistics (ABS) research in March indicates that discretionary spending on dining out is up by 13.3 per cent.

It is estimated that Sydney is home to about 12,000 restaurants but, paradoxically, despite that  increase in diners' dollars, last year was the first time the number of restaurant closures surpassed openings.

Hart believes excessive operating costs and taxes are making many restaurants unviable, the corollary of which is a spike in closures. ''These days as much as 45 per cent of turnover goes out the door on wages at restaurants,'' he says. ''And we've seen a 50 per cent increase in wages over the past decade.''

Despite the ABS figures, many in the industry have noted diners are spending less, and ordering fewer courses, which may be about dietary concerns as much as financial caution. Added to high wage costs and penalty rates, these are all factors behind closures, Hart believes.

A lack of business acumen among chefs is often attributed to the failure of restaurants, though Hart says Restaurant & Catering Australia constantly provides its members with advice on managing a restaurant in the form of regular newsletters and seminars.

North's Becasse is still managing to trade at Westfield Sydney with his restaurant group under voluntary administration, though his Etch establishment has closed. Despite his travails, North, whose business partner is his wife Georgia, considers the concept of running fine-dining restaurants in such a retail complex as a sound one.

''I don't think it's a particularly bad market,'' he says. ''People are still going out but it's the margins that are squeezing restaurants, and the average spend of diners is down, generally speaking.''

He admits to feeling some regret at not having sought and secured a business partner for his restaurant expansion. He's not alone.

CLICK HERE TO VIEW FULL ARTICLE    Source: Sydney Morning Herald, 3 July 2012