Steve Logan: 'All it takes is one slow month to kill you'

One of Wellington’s culinary icons wants customers to stay longer and eat and drink more – but for some it is too late as more doors close.

BWA Insolvency’s Bryan Williams has been appointed administrator of Dixon St’s French-themed café and restaurant Simply Paris. Both the restaurant and its Newtown bakery are now for sale.

Although Mr Williams declined to discuss the details with NBR ONLINE, the advertisement is seeking expressions of interest from buyers for both the purchase and the re-establishment of the business assets.

“The well-equipped bakery has been fully functional until recently and can quickly return to full operation,” the advertisement reads.

The appointment of an administrator to Simply Paris is the latest in a long line of troubles for the Wellington restaurant and hospitality industry.

Last year, high-profile restaurant owner Martin Bosley’s self-titled Oriental Bay restaurant almost had to close because cancelled functions and bookings led to mounting debts.

Gusto Bistro in Petone also closed last year, with the owner citing a lack of patronage as the reason.

But Steve Logan, one half of fine dining restaurant Logan Brown says “bums on seats” was not a problem last year – it was more about getting the most out of those diners.

He says the issue during what was a “pretty tough” last year was a lack of spending by diners.

At a time folk are watching their waistlines and alcohol intakes, Mr Logan advocates they eat and drink more to keep the restaurant trade afloat.

“They’re only having an entrée and a main and not a dessert. Or they’re only buying a beer, instead of a bottle of wine each. And they’re not having pre-dinner drinks and cognacs after,” he told NBR ONLINE.

He says despite the lack of spend, the costs remain the same. Mr Logan says chefs are still cooking dinner for 60 people and wait staff still have to set the table, diners still have be shown the menu and delivered their dishes.

“But you’re only going to the kitchen twice because they aren’t buying as much. Everyone works just as hard, but the return is less.”

Mr Logan says people do not realise just how small a margin most restaurant margins operate on.

The national average is something like 5% net profit before tax of turnover.

Statistics New Zealand’s 2011 food price index shows the average weekly spend on restaurant meals was $42, up from $37 in 2008.

However, restaurant meals accounted for just 8% of shoppers’ weekly food budget in 2011 – roughly the same amount as was spent on vegetables.

Mr Logan says of all the restaurant types, the ethnic, casual dining sector has probably weathered the storm the best and will continue to do so.

“It’s the sort of place where you don’t have to make a commitment. You go along and have a few drinks and buy some food and then buy some more drinks then food.

“What I find is by the time I’ve enjoyed that, I’ve spent more than I have at Logan Brown – so it’s by stealth. It’s extracting the cash out of you by stealth.

"You go to Logan Brown – you think ‘I’ve got to put on reasonably tidy clothes, I know it’s going to hit my credit card hard,’ even though it’s not hard. You’re making a commitment.”

Mr Logan says in the restaurant business, all it takes is one very slow month “to kill you”.

But he has a gut feeling 2013 is going to be a better year. He says the people he is talking to, across the industry, are feeling and sounding more positive about their prospects.

Maybe it's time for another public service wage rise...

bcunningham@nbr.co.nz