Wagamama has closed down its operations in this country. Photo / Google Reviews
Wagamama has closed down its operations in this country. Photo / Google Reviews
Asian-fusion restaurant chain Wagamama is a cult favourite overseas but failed in New Zealand due to a developing market and changing customer tastes.
The UK-based franchise business, which first launched in New Zealand over 10 years ago, introduced Asian-fusion cuisine to the market but the local hospitality market has changedleaps and bounds since then and the number of independent Asian eateries has skyrocketed in recent years outstripping the number of chain restaurants with higher prices.
Consumer tastes have also changed in that time, with many now accustomed to authentic tasting Asian cuisine which Wagamama, with its brand positioning of a western take on Asian food, failed to provide.
Two Wagamama franchises were placed into liquidation earlier this year, citing lack of revenue to sustain the high costs of its venues.
A notice posted on Wagamama's central website outlined that the chain had shut its New Zealand stores and has wound up its business here, though the chain said it "hoped to one day be back on your shores".
Jersey Devil Ltd trading as Wagamama New Lynn was placed into liquidation at the end of February. The liquidator's first report says the turnover could not sustain the costs. The business began operating in January 2017.
Another franchisee, Six dice Ltd, trading as Wagamama North West, was also placed into liquidation in February. The liquidator's report also states that the company was not able to sustain the sales needed to meet costs.
C&C Strategic owner John Gilbert was appointed as liquidator of both failed franchises. The Herald has contacted Gilbert for comment.
Other New Zealand restaurant sites included Auckland's Newmarket, Sylvia Park and at the Wellington waterfront.
The Herald understands three former Wagamama franchises have rebranded to Mama's Noodle House and changed their menus, however, this has not been confirmed as Wagamama head office and the public relations company representing the chain has not responded to requests for information.
Retail analyst Chris Wilkinson, managing director of First Retail Group, said he believed Wagamama failed in this country despite being wildly popular overseas because the food was more expensive compared to other eateries and the real estate the businesses operated from were expensive sites.
He also said New Zealand consumers were moving away from large chains and favouring the more specialist independent operators.
"The reality is that sort of casual dining environment, New Zealand businesses are doing it really well."
Wagamama has remained tight lipped on why it has shut up shop in this country. Photo / Google
Wilkinson said casual dining restaurant chains were struggling here and overseas. This could be seen with celebrity chef Jamie Oliver's restaurant chain Jamie's Italian which was placed into administration in May owing creditors £71.5 million. About 22 of the restaurant's chain 37 branches have since closed.
Prezo and Burger Kitchen were other examples of casual restaurant chains which had in the past experienced booming business now falling out of favour with consumers, he said.
"All of those fast casual dining joints are struggling," Wilkinson said.
"Here in New Zealand we do it really well. If we look at the businesses like Monsoon Poon and hospitality groups like Nourish Group ... they're growing multiple sites but each of those sites are different and you don't feel like it is a chain experience."
Smart restaurant chains were launching new brands and restaurant concepts to expand their retail footprint as opposed to more stores of the same brand, he said.
"Wagamama was the first [operator] to bring Asian-fusion cuisine to New Zealand but again others have come on board and have done it so much better."
The statement posted on Wagamama's website. Photo / Screenshot
Wilkinson said the main reason Wagamama failed in New Zealand was due to consumer tastes changing and an "increasing aversion to chain dining environments".
"We've got New Zealand businesses doing extremely well in creating dining experiences that reflect their local markets and consumer tastes."
From an operational sense, he said being located in prime sites meant higher prices on the menu and growth in the number of Asian restaurants meant there was now a lot more choice making it tougher to make ends meet.
Restaurant Association president Mike Egan, owner of Asian-fusion restaurant Monsoon Poon which has two restaurants; one in Auckland and another in Wellington, said the franchise model did not work for restaurant and eateries operating in the Asian food space.
Mike Egan, president of the Restaurant Association and owner of Monsoon Poon. Photo / Supplied
"Customers want the owner-operator type model, they want to know who the owner is. To run franchises like McDonald's the manual is 300 pages long on how to operate it and for a full service restaurant that's really hard because you have to be so flexible and hands on," Egan said.
"The franchise implies that you write the menu and that you can train anyone up to start running it but the restaurant business is very tricky to get right."
New Zealanders, particularly Aucklanders, were "experts" on Asian cuisine, and preferred to eat out at owner-operated restaurants which served up authentic food, Egan said.
"People know the real deal ... maybe an international franchise like that they don't believe is going to be authentic."
Outside the former Wagamama store in Sylvia Park in Auckland. Photo / Google Reviews
Following yesterday's news of the chain winding up operations in this country social media users have weighed in the reason why, with many calling out the chain for poor food and service.
"Overrated food, terrible atmosphere, expensive for the quality and quantity," one user said on Facebook.
"I'm actually surprised it lasted as long as it has. Only went once maybe 8 or so years ago. It was bland and overpriced for what I ordered, so I never went back," another said.
"There is nothing good I could say about it ... not even for the service. Sorry but I won't miss [it]"
The general consensus from those who had dined at the chain here in New Zealand was that the food was bland and overpriced. Many expressed confusion at how Wagamama was so popular in Britain.
One user summed up the feedback: "It is closing because Auckland actually has great Asian food that's far less expensive and customers here know better. [Wagamama] does well in places where people don't really know much about Asian food."
Wagamama has not responded to the Herald's request for comment.
