After burning their fingers with landlords during the many lockdowns in South Africa, several established restaurateurs are now choosing to close existing restaurants and open new ones in spaces that they own. This is part two of our article on The new restaurant conundrum: starting up in SA’s current economic climate.

“The only reason I closed Chefs Warehouse on Bree Street was because we bought the building directly opposite. So it was a complete business decision for me to own the property, rather than rent a property,” explains seasoned restaurateur and chef, Liam Tomlin, who opened the new Chefs Warehouse on Bree Street, Cape Town in March.

 

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Tomlin, who also started The Red Room by Chefs Warehouse at the Mount Nelson Hotel, Cape Town in April, believes that opening a restaurant in a hotel presents an additional revenue opportunity in terms of hotel guests, in addition to overseas tourists and local patrons.

 

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On the reason for opening 400 Degrees this April, Jeanette Schwegman, owner of Johannesburg-based Clico Boutique Hotel, tells us, “We realised there was a need for Clico to be viewed as a more accessible destination, compared to the fine-dining, ‘special-occasion’ space that people tend to associate with the restaurant. 400 Degrees provides an extension to Clico, with an opportunity to welcome customers to a more casual and affordable dining space. Additionally, it presents a fourth revenue stream to our existing income from our rooms, restaurant, conferencing and functions. Multiple revenue streams help to better manage cost structures in the current economic climate.”

 

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In some cases, it’s also about getting the concept right. “The Test Kitchen Carbon proved incredibly popular, but what we learnt from the success of The Shortmarket Club is that in Johannesburg, diners really value the opportunity of choice and want to be able to create their own dining experience, not sit through an extended tasting menu,” says Luke Dale Roberts, owner of The Pot Luck Club that opened in Johannesburg in May, in the space that was previously home to The Test Kitchen Carbon. Dale Roberts also opened SALON, Cape Town in April, sensing the need for a traditional European salon experience.

 

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Similarly, catering to the need for a child-centric establishment which focuses on the entire family, JoyJozi opened in Johannesburg this April. Remarks Carla Berman, managing partner, JoyJozi, “We opened JoyJozi because we saw a gap in the market for a space that accommodates and excites patrons of all age groups. By partnering with industry experts Luke Dale Roberts and Colin Levin of PlayOn, we felt confident of creating extraordinary everyday experiences that make JoyJozi the one-stop family destination where kids can take their adults.”

 

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Investment and the ease of doing business

Investors are happy to continue backing established successful brands that are opening new restaurants, which presents a better risk ratio and capital to fall back on. The growing tourism sector also positions South Africa as an affordable and multicultural investment destination, with diners who are receptive to experimenting with food and are eager to try new experiences.

“The best thing about opening a restaurant in South Africa is that the barriers of entry are fairly low for those who want to start up. Compared to other parts of the world, you don’t need a large amount of start-up capital to get going and provide people with a great dining experience. We have easy access to amazing produce and as long as you have an idea that is founded in great food and hospitality, South Africans will be responsive to you,” believes Dane Maharaj, owner, Mother-in-Law, Johannesburg.

 

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However, not all restaurateurs are of the same opinion. “From our perspective, it’s been a struggle seeking investment. There are many investors out there, but the moment you approach them with a restaurant concept, they get cold feet and back out. A lot of them have been burnt by the industry. We think it’s a very exciting time to be in the industry, but it’s difficult to feel that way when you’re looking at it objectively from the outside,” share Jes Doveton and Jemma Styer, owners of Johannesburg-based Acid Food & Wine Bar.

 

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Adds Alberts, “In the last three years, I have not had any contact with international investors that are looking for an opportunity to come into South Africa. This lends itself to the political and economic uncertainty in the country and the load shedding crisis, all of which require urgent resolution.”

Surviving and thriving

For a new restaurant to succeed requires a lot more than passion, intuition, optimism, capital and risk-taking ability. “Honestly, I don’t think restaurants are opening with the same frequency as they did pre-COVID and for every new restaurant that opens, there are a large number that shut down. However, in my opinion, it’s important to open at the right place at the right time, listen to your customer and ensure that you keep innovating to stay relevant, while at the same time being affordable and offering a great experience,” remarks Dario de Angeli, general manager and executive chef, Clico Boutique Hotel and 400 Degrees.

“For us, it was a natural progression from our pop-up in the Neighbourgoods Market at The Old Biscuit Mill, to the Hummus Hatch on Bree Street, to finally opening a sit-down restaurant in April, which we felt the time was right for. Customers are happy to be able to sit inside given the onset of winter. We have also increased our trading hours and are now open six days a week from Monday to Saturday and offer dinner as well. This has definitely helped us to accommodate more patrons. Additionally, we have expanded our menu and offer specials on new items, so that people are keener to try them. Apart from that, we maintain a high-quality standard and ensure our food is fresh, tasty and affordable. Customers return for that,” says Ofer Hollinger, owner of Cape Town-based Nish Nush.

 

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For many new restaurants, offering specials, discounts or half-price menus is unaffordable at a time when they are already struggling to establish a foothold. For established restaurateurs, specials and discounted pricing tends to devalue the brand, they believe. Instead, to manage escalating overhead expenses, they may negotiate with suppliers for a better price, practise frugality in the kitchen, incorporate more local products into the menu or install inverters instead of running generators for longer, to cut down on diesel costs.

“Our priority is maintaining consistency in all aspects of the restaurant, which is vital for our large-scale operation. We choose not to offer specials to ensure we don’t undervalue the quality of our products. Equally important is taking care of our hardworking staff; they are at the heart of our organisation, and we strive to ensure their wellbeing. Upholding our high standards ensures the consistency of our products and the experience across all our restaurant locations,” avers Higgs. Dale Roberts echoes a similar sentiment stating that despite external factors, it is important to stay positive and offer good value, whilst concentrating on creativity, quality ingredients, innovative dishes and smart and efficient service.

Remarks Berman, “We opened JoyJozi with a very clear idea of what we wanted to offer, but once you officially go to market, your customer actually helps you refine your offering. For us it’s about being flexible and adaptable, creating a responsive and dynamic team, listening to customers and endeavouring to give them the experience they ask for, whilst keeping the vision of JoyJozi intact.”

While advertising, PR and social media engagement are all beneficial to ensure top-of-the-mind customer recall for new restaurants, there is no substitute for ‘word of mouth’. Maharaj elaborates, “Our biggest challenge is converting social media interest and hype into feet through the door. As cool as your marketing is, we find that word of mouth is really the best way to build a strong reputation and establish yourself as a new restaurant.”

ICYMI, check out part one of this article The new restaurant conundrum: starting up in SA’s current economic climate, and join in on this conversation by sharing your thoughts in our comments section.