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Has Bondi Reached ‘Peak Café’?

By Rupert Truscott-Hughes on February 16, 2017 in Other

Photo: Trent from Punchy

Photo: Trent from Punchy

Have you noticed how many cafes and restaurants Bondi is home to? Noticed also that whenever a ‘For Lease’ sign goes up it is inevitably a food venture that moves in? And when a new development opens, what tends to fill the commercial space below? You guessed it: more cafes and restaurants.

Well, Rupert here has a theory. I reckon we’ve just about reached what I like to call ‘peak café’.

During the last couple of months we’ve seen the closure of Jed’s, Bondi Picnic, and Café Bondi, to name but a few. I never venture south of Bondi so I don’t know how the other beaches are faring, but here in the bubble I fear that things are about to get ugly. I sense that the aforementioned closures are just the beginning.

While Bondi is now a year-round destination – particularly since the completion of the Adina and Pacific developments, and thanks largely to the subsequent high profile restaurants and cafés they have attracted and the generous promotion afforded to them by websites such as Broadsheet, Timeout and Concrete Playground – I still feel that something is about to snap.

Food ventures are far from easy, and they’re definitely not the licence to print money that many people believe them to be. Most operate off a 30-30-30-10 profit model that involves spending 30 per cent of revenue on food costs, 30 per cent on labour, and 30 per cent on overheads including rent and other outgoings, then keeping 10 per cent in the pocket at the end of the day.

With those sorts of margins it’s no surprise that cafes and restaurants go belly up. All it takes it’s a bigger than expected electricity bill, a couple of plumbing disasters, a broken fridge, a delayed liquor licence, or a week of inclement weather in summer and all of a sudden you’re losing money.

Of course another key contributor to a café or restaurant’s demise is often a greedy landlord. As soon as they see a tenant turning over throngs of customers, they want a bigger piece of the pie. Sometimes even a small increase in rent is enough to tip a venue over the edge.

Given the number of cafes and restaurants in the area, things are bloody competitive. The marketing mix of product, place, price and promotion has never been more important. Stuff up just one of the ‘four ps’ and you’re a goner. Crap food is no longer tolerated in Bondi, and if you’re looking to fleece locals’ credit cards you’d want to fill their bellies first.

So before you and your mates with bugger all experience in hospitality decide to sign an exorbitant lease and fork out a few hundred thousand dollars on a fit-out, I suggest you take a good look at the figures. The food game is dog eat dog in these parts, and only a select few are bringing home the bacon.

2017 is the year of ‘peak café’. You heard it here first.