Chefs' recession survival secrets

Bayly, right, at the Grove Restaurant on St Patrick's Square. Photo / Janna Dixon

In the restaurant barometer that is Auckland's Ponsonby Rd, things are looking hot, hot, hot.

Three new establishments within carousing distance of each other have stuck, or are about to stick, their shingle up.

Their threatened collective presence has given cause for a bit of anxiety on the part of established addresses. The heat is on in Wellington too.

There's Osteria del Toro in Tory St: doing a great trade since opening last December.

Two months ago, the Bresolin brothers - second-generation restaurateurs in the capital - opened their third venture, Crazy Horse the Steakhouse in Willis St.

It does not see much in the way of empty seats. Things are also going great guns at Joe's Garage in Tory St, open just six weeks.

And they said times were tough.

One restaurateur's misfortune is another entrepreneur's delight.

A visit to an auction house in these recessionary times will offer an illustration in failure as well as a chance of many a bargain - in the form of used kitchen equipment that is no longer needed because its owner could not pay the bills and the restaurant is no more.

More often than not, an address will reincarnate, even when the equipment has all gone.

Such was the case with Crazy Horse. Likewise, the new Auckland trio, La Porchetta, The Long Room and Sidart, emerge from the sorry ashes of hospitality efforts that sputtered to an end.

So one door shuts (quietly) and another door opens (with a flourish).

At one such site, one of the country's most talented young chefs, Sid Sahrawat, opened the doors to his first sole operation this week.

His fans say he's got to be mad: who would set up in these times? Sahrawat says the recession is maybe the right time.

"There's always a boom afterwards."

Sahrawat, 29, gave up a grand job at The Grove restaurant - a high-end address where the men wear ties and the tables are dressed in two layers of linen - to be his own boss.

His new restaurant is not just off-street; it's down the end of an arcade then up some stairs.

It is hardly likely to attract foot traffic, but, Sahrawat says: "I like that in a way, because it's mysterious until you get there."

Under his steerage, it promises to be a smart, upper-end address that won't lean too heavily on formality.

He's called it Sidart to accommodate both his title and the fact he will be exhibiting works by artists.

Prices are set at $22 for entrees, $35 for mains and $15 for desserts.

"It gives you less margin in your prices, but I want people to have this experience," he says.

He notes that people think a tablecloth restaurant will always cost more, "but there's a big difference between the $33 meal at an average place and a $40 meal at a fine dining place".

Certainly Sahrawat - whose fit-out costs are put at $300,000 - is introducing a new look and concept.

This should be a drawcard, if the observations of Alistair Rowe, chief executive officer of the Restaurant Association of New Zealand, are considered.

"Our customers are always interested in new things: fashion, layout, style. Even if it doesn't work, it's still better than same old, same old."

Sahrawat's name will also draw those who already love his work - and that, too, is a bonus - particularly in times when even loyal customers are considering their spend, in terms of regularity, amount and address.

AROUND THE world, chefs have their signatures, those things that set them apart in a crowded market: Gordon Ramsay's shouting and swearing, Heston Blumenthal's science, Anthony Bourdain's smoking.

But they also have their secrets - and it is these that count in a recession. The Times of London reported that restaurateurs were fighting the recession with "menu-engineering": gazpacho soup without the red pepper garnish, more potato dishes and less rice on the menu, iceberg lettuce instead of lollo rosso in the side salad, standard tomatoes instead of cherry tomatoes on the vine.

Chef Marco Pierre White admits to using stock cubes, Peter Gordon recommends frozen pastry, and in Wellington, the respected - and avowedly Italian - Bresolin brothers are turning to steak. Yes, steak.

At Crazy Horse the Steakhouse in Wellington, Leonardo Bresolin and his brother Lorenzo have big backing by way of title. Their late father Remiro opened Il Casino in the capital in 1976. In its 20 years - a lot in restaurant years - it grew to become Wellington's best-known Italian restaurant.

Talk about following in their father's footsteps. The Bresolin sons now own Scopa Caffe Cucina in Cuba St, the nearby Duke Carvell's Swan Lane Emporium and now Crazy Horse.

Both Duke Carvell's - bought pre-recession - and Crazy Horse (bought in the thick of it) had not succeeded under their previous owners, says Leonardo Bresolin. So how do they make it work?

It's all about having a good name or reputation, a good product, with equal attention given to service and atmosphere, he says. Obviously, price has something to do with it too.

Crazy Horse is a step up from the single-menu, classic and safe approach of its older siblings. "It did well as a steakhouse [under its previous owner] but for whatever reason, it was forced to close. We looked at it as a bit of niche; we wanted to create a difference." If you go to any of their addresses, there's a good chance you will see one of the Bresolin boys at work.

Neither is a chef, but they maintain a front-of-house presence. It's the same with Sahrawat, who is all but camping in his kitchen, as it is with many other successful operators.

Dominique Parat is one. You need to be hands-on to have any hope of succeeding, says Parat, an industry leader who owns three GPK restaurants: in Ponsonby, Takapuna and Albany, plus Banque restaurant in Remuera - and who spends most days of the week trotting between the four.

Parat has been in the business 32 years. He is both chef and businessman. He has survived recessions of yore, and has made business decisions to close his own establishment even when times were good.

Parat believes this recession is bigger - and more "emotional" - than others. Even people with a high disposable income have been spooked into not parting with their entertainment cash, he says. Currently, GPK Ponsonby is offering a two-course lunch, plus a glass of wine, for $25.

"The recession has seen the customer become more demanding than ever before. If something is not right, they want a discount, which in a way is developing a dreadful mentality." He believes some diners are using the recession as an excuse to get something for nothing.

Parat says everyone is feeling the pinch. He is pleased he's addressing the needs of the middle market. "I wouldn't like to be top-end."

The Restaurant Association's Alistair Rowe says you don't need a recession to close a bad restaurant down.

"The recession might hasten it but every winter, when trade slows down, badly run, badly sited and less-popular places fall over. What happens then is that someone else buys them cheap and gives them another go."

He points out, nationally, more than half the restaurants set up in 2001 - when times were good - lasted fewer than six years. True, accurate and up-to-date statistics are difficult to glean.

However, Wellington City Council figures reveal of 530 restaurants/eating houses registered (313 in the inner city), 31 new premises have been established and 101 changes of ownership have been recorded in the last 18 months.

Auckland City Council says the number of restaurants and cafes has stayed steady - but if the Queen City is anything like the Capital, it is safe to assume there has been at least a couple of hundred openings, closures and ownership changes.

In Tauranga, four restaurants and bars shut down over the past 18 months, while 17 new sites opened.

BACK AT Sahrawat's alma mater, they are readying for mid-week lunch service. New head chef Benjamin Bayly has introduced his first menu at The Grove.

Now it's up to the punters to assess his efforts. Losing the head chef and his entourage - Sahrawat took six staff with him - was almost like starting all over again for Michael and Annette Dearth, who own the 5-year-old award-winning address. Sahrawat and Dearth departed on the best possible terms.

(They independently describe their relationship as brotherly and Dearth - a top sommelier - has written Sahrawat's wine list.)

It's the same story here as elsewhere: business has been up and down. The Grove has been doubly hit - by extensive renovations outside in St Patrick's Square and the head chef's departure.

"We underestimated how much St Patrick's Square [upgrade] affected us, and we also underestimated how beautiful it was going to be," says Dearth.

Not everybody survives such setbacks. In July, Hamilton restaurant OneZB went into voluntary liquidation. The top-end restaurant was, said its owners, the victim of a drop in turnover, crippling rent and protracted roadworks.

OneZB's owners, Julia Cowan and Andrew Clarke, are now working for another employer in the food industry, also in Hamilton.

They have vowed to pay back $400 each a week for the next 20 years to pay off their six-figure debt.

The pair were both in their 20s when they established their restaurant. "We started off on the back foot," says Cowan. The roadworks, rent and finally the recession saw them shut up shop.

"I was definitely naive in trusting people," she adds. "If we'd gone in with a more experienced restaurant partner we'd have made it."

The business partnership may have ended, but the couple have survived together in their personal relationship. And one day, says Cowan, they'd like to start up a new restaurant.

She looks on the OneZB experience as something she would not change. "I like to think of it as a very, very, very expensive university course. We're very sorry we've let people down - but we're paying it back."

Other high-end restaurateurs talk of dips in bookings and cancellations. Michael Dearth says the biggest drop he's seen is in sales of bottled water, with people preferring tap.

At the Grove, a three-course set business lunch costs $45; wine is extra. The nine-course degustation dinners, paired with wine, go for $200 a head ($180 for vegetarian with wine matches) and are selling very well.

"Our heads are down but our spend is up," says Dearth, who talks of a group of diners - regulars - who came in the other night and defied all projections of doom. The group of 14 financiers forked out for their food, plus wines like the 1997 Opus One from the Napa Valley, priced at $700 a bottle.

Their end spend was $5000 total. Not a bad start to the week - and not the first time they had done it.

A few kilometres away in Ponsonby, and a few days out from opening, Sahrawat cedes that what lies ahead is a little frightening.

However, he says, he's not daunted.

"I love that challenge. I think Auckland diners are always looking for exciting things.

"The recession may slow you down, but good places will survive."

A recipe for success

How to bring home the bacon when the recession, er, bites:

* Successful restaurateurs should be seen and heard - in the nicest possible way. That means maintaining an on-site and pleasant presence. Absentee owners are only asking for trouble.
* Have some industry experience yourself. The best places have owners who are themselves chefs or sommeliers or front-of-house ambassadors. When things get sticky, they roll up their sleeves and do the job themselves.
* Don't trust your staff. Even the (seemingly) most loyal have been known to top up their salaries by dipping in the till sometimes to crippling proportions.
* Fake it. Even if you're going down the gurgler, don't offer cut-price meal deals along the lines of "buy one, get one free". You may as well hang a sign up that says "desperate".
* Remember that the customer is always right. Nothing is more unseemly than the harassed owner who lets rip in a restaurant when a punter dares complain. Don't bawl out the staff in public either. It's really not a good look, even if they are late/hungover/chemically altered.
* There's no point in having the best chef if you haven't got the wait staff to match. Punters will forgive the odd food flaw, if they feel like they're being looked after. They will never forgive bad service, even if the food is five-star.
* Be prepared to lay everything on the line. Banks don't, as a rule, lend on restaurants. Either have heaps of money behind you or be prepared to mortgage the house in the knowledge that you'll hardly ever see the house because you'll always be at the restaurant.
* Do your sums. Margins are slim (5 per cent before tax, on average). Costs work out at one-third on food, one-third labour and the rest on everything else.