“Sydney’s Largest Seafood Restaurant To Close” – Here’s a lesson for everyone
Today the Sydney Morning Herald reported that Jordan's of Darling Harbour - "Sydney's largest seafood restaurant" is to close. The owner Christopher Crawley blamed it on his landlord increasing the rent, the fall in tourist numbers and the fact that ''People out of China want to pay $25 for a three-course meal, and they want lobster with it..."
Whilst on my recent trip to Europe I was stunned to find that I could eat out in the heart of London, Paris and Rome for at least HALF of what I would expect to pay in equivalent restaurants in Sydney. A 3 course meal with wine by the Eiffel Tower for 3 people came to half what I paid in Sydney for a 3 course meal for two just weeks before.
We have come to accept astronomical prices in Australia as the norm - like frogs in boiling water we have sat here whilst prices rise and rise without any reference to what's going on outside of our shores. Add to this the power of the Aussie dollar and you end up with tourists refusing to pay what we take for granted for a decent meal in a good location.
Tourists don't think in Aussie dollars they think in Pounds, Euros, Yuan, Yen and so on. They look at our prices and then convert that back to their own currency and compare it to what they could purchase for that back home. And in the case of Europe they can often buy two or three times more at home than they can buy here!
So the Chinese reported above who want to pay $25 for a three course meal are being realistic by their own standards. We can whinge about it but it isn't going to change that fact. And complaining that the customer is wrong and they should dance to our tune is not only unrealistic it defies the nature of commerce (unless you own a monopoly telco of course).
Our problems are two fold: one, we have a government that is oblivious to the realities of life for small business owners, it keeps increasing the cost of doing business whilst incurring debt that Australians have to pay back therefore reducing customer's discretionary spending - not much we can do about that for another two years.
And two, we become complacent in how we market our businesses - we rely on the easy dollar from customers that drift through our doors just because we happen to be in the right location. This is a recipe for disaster. You are dependant on the whims of the market place, that no one else opens near you and that the economic realities for your customers do not decline.
To survive and thrive in a restaurant you must have strategies and tactics in place that ensure that people come back to you rather than your competition - and if you think good food and service is good enough you are living in La La land. Every restaurant owner tells me they have good food and service, so it can't be enough can it - or restaurants would not close down!
You must get real and focus on growing your business through customer retention strategies, consistent and effective marketing strategies plus training that ensures that your staff do everything to make your customers feel that they have had an experience worth talking about and returning for.
As for landlords - they have to get real too - they will crucify restaurants if they put up rents too high - then their properties will remain empty. We recommend a great cost saving group that will re-negotiate rents for our clients. Its obvious that the other way to increase you profits is to reduce your costs. If you don't have the time to shop around for suppliers, energy companies, telephone providers, web design companies etc etc then you will get ripped off.
To see how our clients do all of this and consistently grow their profits month on month - join us at the restaurant profits seminar in Melbourne on the 18th and 19th July.