The owner of popular Coco's Cantina Restaurant on K Road has called for a cap on the number of restaurants in Auckland. Photo / Dean Purcell
The owner of popular Coco's Cantina Restaurant on K Road has called for a cap on the number of restaurants in Auckland. Photo / Dean Purcell
Fewer restaurants should be allowed to operate in Auckland in a bid to reduce competition and help keep struggling eateries afloat during the Covid-19 pandemic.
That's the view of Renee Coulter, owner of popular K Road restaurant Coco's Cantina, who said Auckland's 1.5 million population can't support the number of eateries operating in the city.
She has called on Auckland Council to put a cap on the number of new and renewal restaurant licences it gives out each year.
However, the Auckland Chamber of Commerce has given short shrift to the call, saying it isn't government's job to choose which restaurants stay open, but rather customers voting with their tummies and wallets.
The Restaurant Association is also lukewarm on the proposal.
But Coulter pointed to how inner Auckland's Queen St had nine sushi eateries operating within 260m of one another.
"When new restaurants open in such close proximity to existing restaurants, it means less business for restaurants already operating, as well as an unsustainable profit margin for new owners," Coulter said.
This meant, rather than building vibrant and sustainable businesses, restaurant owners had to battle simply to survive, she said.
Renee Coulter, owner of Coco's Cantina says poor profits for restaurant owners are also hurting staff and the environment. Photo / Michael Craig
That battle for survival had become even more acute after the latest Covid-19 lockdown in Auckland.
Not only did restaurants suffer during Auckland's level 3 lockdown, but the hospitality industry had continued to lose about $89 million a week in August under level 2 restrictions, according to recent Eftpos spending figures.
The trickle of business during August had been fought over by close to 7000 hospitality businesses operating in Auckland city.
This was not only having a bad effect on owners, but was also hurting employees and even the environment, Coulter said.
She said while having more restaurants initially created more jobs, those restaurants with low turnovers ultimately had to cut back on staff as their income dropped.
This in turn forced many waiters, cooks and others hospitality workers to work at multiple restaurants in a bid to earn the equivalent of fulltime hours.
Marisa Bidois, Restaurant Association chief executive, said her team were looking hard at all options to keep restaurants open during Covid-19. Photo / Supplied
Poor restaurant incomes also made it harder for restaurants to pay "living wages", Coulter said.
Another effect was that restaurants with fewer customers often could not buy in bulk, leading to more use of packaging and plastics.
And with restaurants often being empty at lunchtime, more food was going to waste, Coulter said.
She said a cap on the number of restaurants could ease these pressures.
Cities in Australia and Spain already had caps on how many restaurants could open, Coulter said.
Restaurant Association chief executive Marisa Bidois said the lobby group had surveyed its members earlier in the year about a cap on the number of licences given out for restaurants and the response was mixed.
Michael Barnett, chief executive of the Auckland Chamber of Commerce, said a cap on restaurants would be like letting government pick winners rather than customers. Photo / Supplied
"Whilst Renee raises some really good points for discussion, its also important that would be business owners should be given equal opportunity to set up and be successful," Bidois said.
"That having been said, Covid-19 has unquestionably changed the world, and as an industry we're also looking at the changes we need to make to ensure our businesses can be successful and sustainable in the future."
Auckland Business Chamber chief executive Michael Barnett said Coulter's call was like clothes shops complaining about having too many competitors and calling on Auckland Council to control them.
"You are essentially allowing government to pick winners," he said.
He said the market was instead the best determinant of what businesses should succeed.
"In the market, people take risk if they go into business, and the risk they take is that they are going to be able to hold a percentage of the market," he said.
Barnett said he was very sympathetic to the troubles of the hospitality sector.
However, he thought the industry would be best served focusing on innovative marketing and establishing good communication with the Government so they could secure more favourable operating conditions should any future lockdown be required again.
