Restaurants under siege as customers feel the pinch

Melody Brandon WEEKEND POST REPORTER brandonm@avusa.co.za

HARD times are seeing high- end eateries in Nelson Mandela Bay badly hit, with some closing their doors as food prices sky-rocket and consumers become more frugal.

While some well-known eateries have fallen victim to the current economic downturn, other well-established restaurants are confident they will be able weather the storm.

Among those that have closed in recent months are Dros at the King‘s Court Mall, Primi Coastal at the Dolphin‘s Leap complex, Admiral‘s Restaurant in Second Avenue, Walmer, and Di Nero‘s in the Walker Drive Shopping Centre.

Popular beachfront restaurant Zorba‘s is believed to be up for sale, but controversial owner George Ioannides refused to confirm or deny it.

Widespread rumours that Cape Town Fish Market, also at the King‘s Court Mall, is in hot water were this week dismissed by owner Mike Mallett.

He said he was concerned members of the public were so quick to accept the rumour.

“I couldn‘t believe it. We had people coming in, surprised to see that we are still here,” he said, adding that he had no idea how the rumour started.

Mallett said the demise of restaurants should be viewed with concern. “Potential investors could be dissuaded from investing in Port Elizabeth if they see that national franchises are closing down,” he said.

Mauro Nettl, owner of Mauro‘s in Beach Road, said restaurant owners had to weather the downturn by giving better service and renegotiating rentals. “If you compare our prices with Cape Town and Johannesburg, we don‘t ask the same. Guys in shopping centres will battle because they still have to pay high rentals as well as the normal overheads – wages, electricity – which have gone up, as well as higher food costs.”

Nettl criticised Port Elizabeth patrons for being fickle. “You‘ll have a new restaurant which opens and it is popular for about six months and then it closes. Port Elizabeth is not big enough to support a saturated restaurant industry.”

Peter Raymer, owner of one of the oldest restaurants in Port Elizabeth, Old Austria, said: “People are aware what they are paying for. Old Austria has been around since 1972. We are not perfect, but we are consistent. Up to date I have heard of 14 restaurants that have closed, but it‘s all rumour.”

Alan Fryer, owner of Nosh in Cooper Street, said most restaurateurs expect quieter times during winter.

“That‘s normally the time one reviews the menus, but it‘s important to never take business for granted,” he said.

Fryer said he, too, had heard much speculation about the state of restaurants. “There has been a lot of speculation. It seems that people thrive on hearing about people who have bad luck – they almost get excited.”

Fryer, who has been in the hospitality industry since 1987, said restaurant owners had to use their ingenuity to weather current conditions.

“You have to look after your clients like gold, keep prices reasonable and box clever.

“Customers don‘t complain when they have to pay higher food prices when they buy groceries, but they still expect to pay the same for a steak now that they did two years ago,” he said, adding that it was important to keep positive. “You have to look to the future – it doesn‘t help to be negative.”

Rey Franco, Cape regional chairman of the restaurants and catering segment of the Federated Hospitality Association of South Africa, said consumers were definitely tightening their belts.

“People are definitely being tighter with their spending. However, the drop in business this winter is in line with trends this time of the year.

“If you look at the various newspapers and magazine publications, specials are being offered everywhere. In my view, there has been a slight decline in eating out but not significant. Patrons are just being more careful with spending,” he said.

PE Regional Chamber of Commerce and Industry chief executive Odwa Mtati said that while business was relatively slow, the more established restaurants would come out unscathed. “They will weather the storm,” he said.

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