Last week, popular online newspaper Broadsheet published an article regarding the closures of Melbourne venues Woody P., Bar Clarine, Huxtable, Northern Light, Stokehouse City and Enquire Within. They posed the question: has the Melbourne restaurant scene hit ‘peak dining’?
The restaurant industry has always been hard on newcomers, with many ventures failing within the first 12 months. Particularly if they are inexperienced small businesses. And Melbourne, voted the most liveable city in the world for 5 years running is certainly renowned for its dining scene, and arguably maintains the crown of food capital of Australia. Major events such as the upcoming Melbourne Food and Wine Festival (which starts this Friday) both support and contradict the market saturation concept. On one hand, the renowned festival attracts thousands of food lovers from greater Melbourne, as well as nationally and internationally; on the other, low to medium-profile restaurants participating in MFWF and other events have to carefully screen which events they choose to participate in, as the abundance of choice often means they do not attain enough attendees and may have to cancel events, or run at a significant loss.
Additionally, the 2015 Australian Tourism Labour Force Report estimates that the tourism and hospitality industry in Australia was short 123,000 workers to meet the demands of the next 5 years. The key difficulty facing businesses was the shortage of adequately skilled labour. This may arise from a number of factors, including:
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The unwillingness of businesses to up-skill labour when the turnover rate is as high as 66%; -
Increasing reticence of the shifting worker demographic to tolerate long and difficult hours; -
The disillusionment of trainees who have been inspired by our favourite reality cooking shows, and end up with a glamorised impression of the hospitality industry.
At the same time, popular casual dining options such as Huxtaburger, Café Vue, Movida, and Oriental Tea House seem to be able to safely expand their locations at a moderate rate whilst keeping their heads above “chain store” status.
The case may be less that Melbourne has reached market saturation in terms of the number of diners willing to eat out, and more that Melbourne establishments are struggling to meet the balance of the new cultural dining norms, including:
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Cost – the media glamorisation of dining, aspirational foodie culture, and both the availability and awareness (again driven by media) of high profile offerings (like Dinner by Heston, Cumulus Inc) mean more expensive venues take the lion’s share of diner’s budgets , reducing potential dining frequency; -
Expectations and quality – the skills shortage means venues may not be able to obtain (or afford, whilst keeping their prices accessible) quality staff that meet high patron expectations; -
Staying on trend – for example, local, sustainable, increased vegetarian offerings, and maintaining a menu that is either innovative and frequently changing, or so consistent it becomes an institution; and -
The recent boom of the ‘meal box’ industry (e.g. Kelly Cube, Hello Fresh, Marley Spoon) which provides diners – even those in small inner suburban apartments with limited cooking facilities – with another quick and easy alternative to take away, which also aligns with the healthier-living craze.