For months, restaurants, bars and cafes have been unable to serve people in the way they were designed to. Rooms that were once filled with waitstaff, diners, outrageously designed furniture, endless bottles of wine, the clang of crockery and upbeat playlists are now empty. If the doors are open, tables have been pushed to the side, chairs are stacked, and you shuffle to the counter, where a lonely member of staff (most likely the owner) takes your order and unromantically hands your food to you in a sweaty paper bag. Cash might not be an acceptable form of payment. Staff have been stood down, bills are unable to be paid, stock has been sent back, and in most cases rent is still being charged.
So what can we expect when venues are allowed to reopen to a maximum capacity of 20 diners per enclosed space on June 1? We spoke to restaurateurs, bar owners and distributors about their plans and projections for dining in Melbourne.
Be prepared to provide credit card details when you book a table
It’s no secret that hospitality is a hard industry in which to make a buck. Even in the Beforetime, a survey conducted by the Restaurant and Catering Association of Australia reported an average profit between 2 and 4 per cent for hospitality – and this is when businesses were capable of running at 100 per cent capacity. With reduced numbers allowed in venues at any one time, it’s impossible to simply break even.
Jessi Singh, owner of Daughter In Law, Mrs Singh, Horn Please and Sydney’s Don’t Tell Aunty, opened his Sydney restaurant with a maximum capacity of ten people per service and experienced no-shows the first night people were allowed to dine out. Singh said, “twenty percent of our bookings for the first week did a no-show. They didn’t even call. We could have easily filled their places with people on our waiting lists. Opening up was a risk, and it caused us to lose money. In Melbourne, we will have to take credit card details and introduce a minimum spend.”
Scott Pickett, owner of Matilda 159, Estelle and Lupo, plans to do the same. “I’m doing the maths on what it takes to open [Matilda] to 20 people. Between the chefs, the host, a manager who can also do wine and waiters, that is already eight people to open the doors. We have to take credit cards and introduce set menus. Not only for no-shows, but we have to keep everything contactless to make sure everyone is safe.”
You will be drinking on the clock
It’s not unusual to have set seating times in popular restaurants, but even casual venues and bars are looking to introduce seating times. The more people you can get through your doors, the more revenue it will generate. “Above Board will need a major rethink for the next 12 months,” says co-owner Manu Potoi (who also has Falco Bakery, Bar Liberty and Capitano). “We are toying with the idea of seatings with a number of drinks consumed in that period.” Above Board can only hold 12 people in normal times, and the numbers will reduce drastically under the new regulations. Allowing or expecting people to consume a number of drinks per seating also implies a guaranteed minimum spend per customer and a stricter compliance of responsible service of alcohol.
“We might have to introduce garden parties starting from midday, switch into cocktail hours between six and eight and post-drink hours, “ says Miss Pearls of Madame Brussels. Outlining the hours and changing the offerings throughout the day means that patrons will have to book in for the service they want and have a limited time in which to enjoy themselves, which is a slightly different way of introducing seating times.
Rita Ambroz, co-owner of Romeo Lane, doesn’t want to resort to seatings in a bar, as “it takes away the experience of being in a bar. No one goes to a bar just for the drink, they want to be in the bar, relax and spend time with people.” Part of the reason why Romeo Lane is so successful isn’t just in the quality of the product, but the romantic atmosphere the bar delivers, which is an element that can be lost to over-restriction and regulation.
Going out will be more expensive
“Shouldn’t this be the time to press the reset button and charge what we really should?” asks Pickett. “Am I not going to go out for dinner because it’s going to cost me an extra $15-20? That is actually our bottom line. We are selling ourselves short. Why are we the only industry that doesn’t charge what we should? Look at the plumber, it is a $150 call-out fee for them to even look at the toilet, but I pay it. I don’t question it. Why would we [as an industry] undercut ourselves now?” Pickett says in the Beforetime, hospitality was already undercharging for everything because everyone was too scared to make the first move towards a more profitable business. Miss Pearls agrees with this sentiment, “People need to be re-educated on what things are worth and be willing to pay that. We are in an oversaturated industry that would benefit from regulation. Plus, rent and insurance is always going up and margins are going down. I haven’t taken my dividends in the last few years because I’ve been putting it back in the business.”
From a supplier’s perspective, Liz Carey from Wine and Food Solutions has taken stock back from restaurants and is sitting on a large number of outstanding invoices. As a small business, she has been able to negotiate with restaurants to ensure their survival, but there is a flow-on effect. The terms she has been operating under have always been to pay for wines from Europe before they are shipped, but as a distributor, she now has restaurants on 30- to 90-day terms. “I’m effectively operating as another bank for the restaurant. It isn’t good for cash flow, as you don’t know your true financial position. We will all be operating under cash-on-delivery terms when we all come back. It puts everyone in a difficult financial position. I don’t think diners knew how good they had it before. Dining, as a result of venues having to reopen and pay everyone [staff and suppliers] properly, will be more expensive; it has to be.”
Jia-Yen Lee and Thi Le from Anchovy are under no illusion that we are all operating under a false economy right now. “We have JobKeeper, reduced rent and closed borders, which means that premium produce that usually goes overseas is now cheap and in abundance,” they say, finishing each other’s sentences. “Look at all the restaurants doing trays of lasagne for $35. That’s impossible. We are passing on our savings to our customers at the moment, but when things go back to normal, so will prices.” The pair are changing their tactic when it comes to reopening. Le said: “We always thought we were really affordable, and we always believed in making good food accessible. It wasn’t until we started doing khao jee pate [a Laotian banh mi that the restaurant is currently selling for $12] that we realised we were under-servicing an entire demographic. When JobKeeper runs out, people won’t have the same disposable incomes as they had before. We might run as a noodle bar for lunches. Our goal is to always be accessible, no matter what your income is. We want to respond to our consumer, not tell them how it is.”
Singh acknowledges that people will have to be prepared to pay more for food, but he doesn’t want to cost them out of a dining experience. “No one opens a restaurant wanting to make food expensive, but people might have to deal with minimum spends if they want to eat in a restaurant in the future.”
With the recent release of the Hospitality Industry Guidelines, which outline the structure of how venues will operate, there is a substantial amount of deep cleaning and ongoing sanitising that has to occur for the foreseeable future. Pickett is currently trying to reconcile where the money for these services will come from. “Do we add the labour of an individual constantly disinfecting and cleaning to dining costs or absorb it and reduce our already non-existent profits? Printing menus are expensive as it is, but if they’re single-use forget about the cost, it’s a sustainability nightmare.”
Carey is already lamenting a ritual of weekend brunches. “Say goodbye to the communal café newspaper”
Takeaway and delivery will stick around
They say that if you do something 30 days in a row, it becomes a habit. Restaurants have been closed for well longer than that, and those that have been operating with takeaway and delivery services have already noticed how quickly the public have become accustomed to it. “We have been doing the same takings at Capitano on the weekends under lockdown as we were operating as a full-service restaurant,” says Potoi. In reality, the kitchen is actually pumping out more food than it was before because alcohol sales only make up about 10-20 per cent of orders, whereas booze used to make up around 40. “I think we will definitely have to keep up takeaway when we reopen, especially with reduced numbers able to dine in.”
Singh says delivery will also play a big role in maintaining jobs for his staff, especially those who are ineligible for JobKeeper. “Thankfully curry travels really well and I haven’t needed to educate the public on it as a takeaway food.”
“We can only seat a maximum of seven people downstairs and nine people upstairs, so it isn’t a viable business model for us not to run takeaway,” says Lee. That being said, due to the high-labour à la minute cooking the food at Anchovy requires, when the restaurant is able to seat its full capacity, Lee will have to drop its takeaway services.
John Blakenstein from Mimosa Rock Oysters (recent state winner from the Delicious Produce Awards), who previously only sold his premium Sydney rocks directly to restaurants, was sitting on 20,000 dozen oysters that needed to be moved when restaurants closed. He opened his online store for consumers to purchase directly from him and sold out within a week. “I usually sell that number over the course of the year so there is a high demand for restaurant-quality oysters to be eaten at home.” Blakenstein has a vision of being able to supply both restaurants and consumers in the future, but he will probably have to hire someone to manage logistics and demand.
“The plan for me was to always have an online store,” says Carey from Wine and Food Solutions, but she has no plans to switch entirely to retail as the wines she brings in are not the popular varietals that the general consumer recognises (chardonnay, pinot noir, etc) at an entry-level price point. “The way consumers find my wine is that they try it in a restaurant through someone who is very passionate and excited to serve that wine. It isn’t available through the big wine stores, so people find me through an internet search later. Having an online store means I get money for wines right now [the cash-on-delivery model], which means I can pay my winemakers but also offer restaurants a bit of leeway on payment terms.”
While delivery cocktails have been a successful endeavour for Ambroz at Romeo Lane, Ambroz says she will probably keep the packed cocktails to wholesale only. “We are currently stocking at P&V in Sydney. The cocktails travel well and are light. It’s no skin off our noses to walk a package off to the post office.”
Say goodbye to seven-day dining
“I was really tired before this started,” admits Miss Pearls, “I’ve had no holiday for a year and a half and just come out of summer [the busiest period for Madame Brussels], Christmas and New Year’s and I was on the ground doing all the legwork.” Burn-out is common for anyone working in hospitality. You are working in high-pressure situations where it is hot and uncomfortable and can spend 12 or more hours on your feet at a time.
“You don’t realise how late you work until you’re not doing it anymore,” says Lee. “If I’ve needed the recharge and personal time outside of work, so do the staff. They’ve taken care of us and showed us how tight a community we are at Anchovy, so we need to take care of them.”
A lot of businesses are also opening under shortened hours. The Speakeasy Group’s Mjolner, Boilermaker House and Eau de Vie are reopening only on Fridays and Saturdays. Carlton Wine Room, which was previously open seven days a week, will reopen with only five. Cutler and Co will only be open Thursday to Sunday.
Potoi says as soon as the restaurant is allowed to trade again, the rent deferrals he has received will have to be paid back. “But JobKeeper can only cover so much. You want to be able to provide work for your team, but you have to balance that with having to pay all these bills that are outstanding so you can operate as a long-term business.”
There will be a rise of small business
Pickett, Pearls, Ambroz, Singh, Le, Lee and Potoi all consider themselves lucky to be in owner-operated businesses. The ability to step into a role not only takes away a wage that needs to be paid, but decisions within the business are able to be made faster and with empathy.
“We could have taken all this time off, but reopened because none of our staff qualify for JobKeeper,” said Lee. “If we don’t work, they can’t live. We reopened doing Laotian food rather than Vietnamese to keep the environment engaging while packing food into boxes, and our team was able to pick it up really quickly because we are small and agile.”
Potoi says his businesses “are living press conference to press conference so we have to be able to change quickly and remain agile. We were really lucky to have [Falco] bakery because counter service works well. You can buy Bar Liberty’s take-home meals and wine from there and we had to move on that very quickly.”
Another restaurant owner who would like to remain anonymous says larger restaurants with financial backers who are not part of hospitality have seen a ruthless culling of staff, services and support which means they might not reopen.
Carey, who deals with large and small restaurants, has noticed that it’s “the smaller businesses who manage their cash flow really well. I think you’ll be surprised to see which businesses you thought were viable who are actually not.”
We will experience hyper-local dining
“Walk through the city right now, there is no one in it,” says Singh, who has two businesses in Melbourne’s CBD. “My main customers are office workers, and we haven’t seen them in months. People have been let go, and when we all go back to work, maybe it’s only half the people who will be allowed in the office at any time. They’ll all be eating around home.”
Bar Liberty may be considered a destination venue – playing host to international chefs when travelling and being written up in the New York Times, but Potoi believes his businesses have always had a strong neighbourhood following.
“Anchovy has always been a neighbourhood joint,” says Le. Prior to lockdown, the business operated with a lot of loyal regulars and they’re a lot of the same faces who walk down for takeaway. “There’s a lot of community support.”
All the major events, from the new Melbourne winter festival to the Grand Prix, have been cancelled, which means there is no tourist trade for businesses in the inner city. “Tourism will probably be suspended for 12-18 months. I really hope the locals will spend their money here instead of overseas,” says Pickett.
Singh believes it is a two-way street. “All that money that was going to yearly trips to Bali with the family is hopefully going to be spent in Melbourne. It will bring more local jobs. We need to stay home and spend money domestically.”
Miss Pearls has decided to take matters into her own hands. “I wrote to Dan Andrews yesterday asking for a job to be on a hospitality task force to help restart the CBD and help all the small businesses in town. I want to look after privately owned venues and develop a strategy on how to make the City of Melbourne unique again. We won’t have tourists so it has to be adapted to our local community.”
The entire industry will have to professionalise itself
We’ve heard the stories again and again; unless you’re dying or in a hospital bed, you are expected to turn up to your shift in hospo. With the spread of an epidemic and people on higher alert than before, “the attitude of coming in while you are sick has to change. All these cowboy shifts are gone,” says Singh. “We will need support to be able to offer our staff more sick leave. We need a new policy and new rules. What we have right now is very old school. Hospitality has to learn how to live and work with this virus. It’s going to be a massive challenge.”
Le cites a blurring of the lines between industries as the culprit. “We need to reevaluate the industry when we reopen. Hospo was competing with the entertainment industry, and post-corona, people will need to look at dining as the food and beverage industry.”
Regulation is a possible solution according to Pickett. “You can’t just buy a car and drive it. You can’t just buy a hammer and be a builder. You need a license to fish. People need to be taught how to run a hospitality business so there is no mismanagement. It needs to be more difficult for people to open restaurants so people know what they’re getting into. How do we ensure everyone is looked after and paid correctly and new business owners aren’t flushing their life savings away?”
For Carey, she believes the professionalisation of the industry as the only action towards reopening: “There is no other choice.”
Want to find out for yourself what dining will look like? Book a table at one of these restaurants.
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