What it takes to open a restaurant during a cost-of-living crisis

The catering industry is a notoriously high-risk industry. The worst recession in 15 years You might think disaster has already struck.

But there are many food businesses that prove you can overcome tough economic times.

RNZ spoke to four business owners who said never mind the recession, their shops were open anyway.

“Everything is at stake, it’s terrifying” – Rebecca Schmidt, owner of San Ray Restaurant in Ponsonby, Auckland

After a year of searching, Rebecca Schmidt and her partners have found the perfect location for their new restaurant on Auckland’s Ponsonby Road – in the historic building that once housed Orphan’s Kitchen.

San Ray serves the fresh flavors of Oaxaca in an elegant setting; this all-day restaurant offers views of leafless trees, the Sky Tower in the distance, and large windows that let the sun in. Come for a coffee, a glass of wine, a light lunch or dinner – whatever you prefer.

It’s the latest endeavor for the two owners of Cazador Restaurant & Delicatessen on Dominion Road, and Schmidt said it’s helping them build a name for themselves in the restaurant industry and among their customers.

“I think people are curious about what we’re doing because it’s a different direction than Cazador, and I think that’s really helpful.

“We’re not trying to instill some rich experience in people, we’re just trying to create a place where you can come and have a glass of wine and a piece of cheese and it’s fine.”

Schmidt is well aware that two weeks ago, the San Ray Airport opened at an unstable time and in an unstable environment. Ponsonby Road is now in trouble In order to attract people, high rents have squeezed out old vendors.

“You can’t sugarcoat the facts; the market is very difficult right now and we opened in a very challenging environment… but on the other hand, the timing actually allowed us to enter the market. The reality is that there were a lot of sites to choose from… however, finding the right site was still very important to us, so when this site became available, we knew about it.”

San Ray offers a different experience hunter; its opening hours are longer and its visitors are more casual – and for good reason.

“In good times, and hopefully they’ll come soon, there’ll be a lot of traffic on the street and we want to be able to embrace that traffic, that spontaneity, ‘Oh yeah, I just want a light lunch and I can go in there and have a salad and a glass of wine and be well looked after’. It’s not necessarily something that needs to be planned a week in advance.”

Schmidt sees light at the end of the tunnel, thanks in part to the Ponsonby plant.

“Ponsonby is the heart of Auckland and it’s a vibrant, diverse and wonderful community. It’s exciting to be able to be part of the entertainment that has always taken place on Ponsonby Road.”

“We know everything is going to be OK, so we’re just going to wait until it’s OK.”

Is all this a gamble? “Absolutely,” Schmidt said.

“It’s all very risky and it’s scary. But you have to take risks in business or you’ll get nowhere, so we did it and we’ll find out pretty quickly if it was a good idea or not.

“During this period when it is difficult to go out, the most important thing is a warm welcome… everything else will follow.”

“When you open in difficult times you work really hard” – Liam Kelleher, owner of Lillies Winery, Cider House and Restaurant, Christchurch

Tucked away in a secluded area of ​​Philipstown, surrounded by sheet metal workers, construction companies and aluminum fabricators, you’d be forgiven for thinking Lillies is just another garage shop. It’s easy to drive past it, too, as there’s no sign on the door or road signs pointing you there.

But this curious new restaurant is getting Christchurch residents excited. Lillies, run by Will Bowman and Liam Kelleher, opened just six weeks ago and serves cider, wine and wood-fired pizzas in a large warehouse on an industrial estate that is now residential, about 200 metres away.

“We’re not actually in central Christchurch, we’re not in the suburbs, it’s a bit of an odd location, we’re in the middle of nowhere, but that’s what we got, we wanted a warehouse,” Kelleher said.

Lillies is an expansion of a winery the pair have run for many years; they had been making wine separately and cider together in North Canterbury before deciding to move here this year.

“We thought, ‘We should get a warehouse, maybe put a pizza oven in the parking lot and sell some wine.’ And then it just snowballed into this big half-winery, half-restaurant operation.”

Kelleher explained that selling wine and cider to restaurants is “extremely difficult” at the moment, not just in New Zealand but around the world.

“By doing this, we can sell our own stuff to people who need food.”

The restaurant’s opening comes at a unique time for the economy, but Kelleher says Christchurch residents have been waiting for something new and exciting like Lillies for a long time.

“We were really lucky to come across a very unique period in Christchurch where there was a period where there really wasn’t anything interesting, it was all formulaic stuff, and we wanted to do something completely different… A lot of people tiptoed to the door and said, ‘Oh, well, it’s a restaurant.’

“Even though we had zero footfall, people were still coming to us because we had found a sweet spot where people did want something new, they did want something different. If it was in Auckland or Wellington it would be a completely different story.”

This isn’t the first time Kelleher has started a business in tough economic conditions. In 2010, he opened a wine shop in London during the global financial crisis — which taught him a thing or two about resilience.

“I was young so it didn’t feel like a gamble and I wasn’t old enough to understand the risks. There’s a reason to open at a moment like this; when you open at really good times and then all of a sudden it gets really hard, it can be quite complicated.

“And when you open during tough times, you work really hard, really hard, and you want to do better, and then things get easier and you’re not shocked when things do go bad. You say, ‘Wait a minute, we know how to run this business, we’ve been doing it for years’.”

“I’m a risk taker” – Ryan Dill-Russell, owner of The Gaff Hotel in Māngere Bridge, Auckland

After much buzz around Auckland’s Māngere Bridge, a quaint corner house opposite the village school opened on Anzac Day this year as The Gaff.

It was bustling with activity—people came in for coffee, couples sat down to eat popular items like chili scrambled eggs and fried chicken waffles, and families stood on the front lawn while children played around (awaiting the upcoming playground).

Owner Ryan Dill-Russell is a “risk taker.” But this time it was a calculated move.

“I always say that your website is only one step away from being broke or successful… the risk is huge.”

He has been in the hospitality industry for 12 years, and that’s just the time he’s owned and operated a cafe. He’s also worked in takeaway pizza places, among other places.

Prior to joining The Gaff, he ran a cafe and bistro in nearby Onehunga.

“That was the time when people were saying to me ‘we’re going to have a recession, it’s going to be a recession’ and I was thinking ‘it’s not a good time to start a business’.”

Some friends had suggested that the growing suburb of Māngere Bridge in south Auckland was in desperate need of some kind of modern restaurant. Dill-Russell had never heard of “The Bridge,” as it’s known locally. But after visiting, he found the community feel so alluring that he almost considered moving away from the North Shore.

“I always say you’re only one step away from being broke or making it big.

“Location is obviously fundamental, you can have the best concept in the worst location, but you can also go bankrupt. We all know that in the hospitality industry though… you have to do your best, but it’s a fickle industry.”

When a historic house became available for rent, he asked that it be respectful (as did the council). He wanted to build a restaurant that could seat enough people to keep it going but retain the exterior of the “nice” villa and the elaborate roof.

Gaff currently has nine full-time employees. The baker and a cook are the first in the door at 5 a.m. They prepare the cupboards, which are filled with different kinds of baked goods – ciabatta, pastries – depending on the day.

But Deere Russell said the cafe was “semi-closed at the moment”.

So what will Gaff look like when it’s fully underway? It’s applying for a liquor license and plans to start operating nightly in the spring.

“People are clamoring. It’s not just about doing business and making money, it’s about meeting a need in the region. I think if you meet a need and not just your own selfish desires, then that’s to your benefit as well.”

“You have to try it” – Mike Ny, owner of Glou Glou in Wellington

Allen Street, where Glou Glou is located, has a long history with hospitality. In the early 20th century, the street was home to Wellington’s fruit and vegetable market and is still dotted with restaurants and bars.

The cafe (which will soon also be a bar) is stylishly decorated—polished concrete floors, avocado green velvet booths and banquettes, and lush green walls. It feels a world away from the grimy and seedy world of selling produce, but owners Mike Ny and Taz McAuley are hard at work.

The founders and founders of catering company Food Envy opened their first physical store in central Wellington in January this year, just one block away from their original food store.

In this country some The most iconic dining venues are forced to closeNy said their choice to expand was “probably a little naive.”

“I think it’s something that everybody in the hospitality industry does… You have to give it a try. You do it because you love it and with all these places closed, somebody’s got to do it.

“People still need to go out to eat, otherwise the city would be deserted and run-down, so this is really nice and refreshing.”

Ny says keeping morale high among all nine employees is the biggest challenge, but also the biggest reward — when they’re busy between the front and back offices, it’s a good day at the office.

“Obviously, it’s a little bit frustrating and the cost of living is high. But if our team can really keep that positivity and culture going and do their best work, then that positivity and culture will trickle down to our customers.

“And then if we can successfully create a place where … people want to go … then hopefully by the time the winter is over and the sun comes out and hospitality improves a little bit, things will improve and we can get out of this.”

The first six months were “not amazing, but not terrible.” They have their regulars, Ny said, and there are plenty of new things to get excited about in the future — nighttime openings, a new menu and new events.

“If we just sit back and wait for the market to recover, I think it’s going to be very, very scary.

“If we can tell our team … we’ve got more to prepare, we’ve got more to do, so let’s keep pushing and keep working at it. That’s when the exciting stuff happens.

“If we’re just waiting and just hoping people come in and hoping things get better … I don’t think that’s going to happen any time soon.”