Paying the Tab

A couple of weeks ago this site noted the shuttering of Danks Street Depot due to a number of factors, including higher power and refrigeration costs brought on by the carbon tax. Not surprisingly, Danks Street isn’t the only operation feeling the pinch:

Neil Perry runs four top restaurants in three states – NSW, Victoria and Western Australia. Food prices are one thing, he says. It’s the input costs that are the killer. Labour, transport, government red tape and energy. “My power costs have nearly doubled since last July,” Perry says. “Across the Rockpool group, electricity cost us $1 million in 12 months. We’ve been really battling not to put our prices up.”

Read the whole article: it’s a good round-up of the factors that make eating out – whether in pubs or fine diners – so expensive in this country. Added up, they go a long way toward busting the myth, repeatedly peddled, that running a restaurant is a quick ticket to wealth so long as one is willing to exploit staff. Instead we see that much – but by no means all – of the high relative cost of serving up food in Australia comes from the thousand cuts of government regulation, from labour market over-regulation to high taxes on alcohol (which is why a bottle of Grange can be found cheaper overseas than here at home).

With consumer spending on restaurants softening, the industry is likely to feel the pinch even further in 2013.

(Thanks to reader James in Footscray for the, ahem, tip).

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6 Responses to Paying the Tab

  1. I defy anybody to fully comprehend just the pay scales on the award, never mind the the terms and conditions etc.
    Anyone who pays all of their staff accurately would have to stop running the restaurant and devote themselves full time to administering the award and reconciling it with what is happening in the restaurant.
    Near on impossible.

  2. Just to be clear, in the industrial award that applies to my hotel/restaurant operation, there are 962 different pay rates.
    Nine Hundred and Sixty-Two.

    • chiefprick says:

      That is insane. Why, it’s almost like they don’t want businesses to be able to comply …

      • That’s for a country pub. I’m not game to say I’m anything like conversant with the pay rates. There are so many ambiguities.
        The person on the greet ‘n’ pay lectern at the door of the restaurant, who does nothing but shuffle paper, process payments and greet arriving customers – are they “guest services” or “clerical stream”?

        After tossing a coin to decide if the reservations manager is “clerical” or “guest services”, the employer then has to know with precision accuracy this person’s cumulative work history: Does she have 0-1 years experience, 1-2 yrs, 2-3 yrs (& so on).
        Don’t be wrong about it, or you’re paying her the wrong rate.

        Much the same ambiguity applies to every other person in the place. Does the kitchenhand have sufficient customer contact to qualify as “customer service” or are they “fully back of house”?
        Does the kitchenhand put the spuds into a pot & onto the stove after peeling them? Does that count as “minor preparatory cooking duties” or is it just straight spud peeling? (& so forth)

      • Every time you read of a restaurant operation being “caught” underpaying staff, some reading between the lines is called for.

  3. youcancallmemeyer says:

    From the article to which you linked:

    “I saw a chef’s fruit and veg bill last week. I’d bought blueberries for $2.15 a punnet at Woolworths; the restaurant was buying the same brand, wholesale, for $4.85.”

    Why is this chef still employed?

    In the 1960’s my father drove a smallgoods truck for Sylveters (subsequently taken over by FJ Walker). I was under 10 at the time but it stuck in my mind the advice my father gave to the many small shop owners to whom he delivered (most if not all have long ago gone out of business), Namely, why would you buy leg ham from Sylveters wholesale when you can buy it 20% cheaper retail at Coles or Woolies.

    I appreciate that the thrust of the article, and your own commentary, is that restaurateurs are the victims of relentlessly rising costs (over which they have little control) and customers who think they are being overcharged.

    One wonders how any chef would pay wholesale more than 100% over retail; unless he/she wanted out of the business.

    I enjoy reading your blog. It brings back wonderful memories of when my wife and I could afford to go to nice restaurants (Tony’s (Bilson) Bon Gout in Elizabeth Street and Upstairs in the 70’s were the go then).

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