Mr Piccolo opened its doors in 2014 in Kensington. It offered Italian in a modern, casual setting at a mid-level price point of around $40 per head.
After an initial period of success, owner Anthony Jaye noticed a material drop in business in the two years leading up to 2019, when the diner shuttered.
“Gone are the days when you could open up a little restaurant and be happy with 40 customers a night – having fun, making a couple of cocktails, putting beautiful homemade food on the table,” he said. “It’s not so straightforward anymore.”
The business is a casualty of restaurant scene under significant pressure due to rising fixed costs, restaurant oversupply and disruptors such as Uber Eats and Deliveroo, said Mr Jaye. Restaurant operators, as a result, are being forced to find new business models and ways to attract customers in a changing market.
Jacques Reymond ran his eponymous French bistro from 1992 to 2014, racking up 80 Good Food Guide hats in the process. Since their father’s retirement, Reymond’s offspring have opened two French diners, Bistro Gitan and L’Hotel Gitan, both with relatively traditional bistro-style French food.
Antoine Reymond – along with siblings Nathalie and Edouard – is now set to open two venues on the ground floor of an office space in Melbourne’s inner-eastern suburb of Cremorne.
“Things are tough at the moment,” he said, and this new reality has forced the family to take a radically different approach to their latest venture.
Frederic, the more formal restaurant, will be a 70-seat bistro open for lunch and dinner offering French, Spanish and Italian dishes. The adjacent Fred’s Bar, which Mr Reymond calls the “cheeky younger brother”, will be less formal, serving pastries and coffee in the morning, then dishes such as minute steak from lunch until late in the evening.
Increasing fixed costs combined with soft consumer spending meant the Reymond family needed to move to a new business model to increase revenue and offset high overheads.
“We spent two years looking for this newest venue and nothing seemed right,” said Mr Reymond. “It was very difficult to run the numbers and come up with something that would turn a profit in this [current] environment.”
Solutions for a changing restaurant industry
Becoming something for everyone for every occasion
Anthoine Reymond said the difference in the level of formality at the family’s two venues meant the net was cast wider in terms of prospective customers. “These days we need to squeeze absolutely everything out of whatever floorspace we take on,” he said.
Restaurateurs Michael and Zara Madrusan, who recently opened bistro and cocktail den, Bar Margaux, have adopted a similar come-one-come-all approach with their new Lonsdale Street venue. Margaux is open until very late in the week (and 5am on weekends) for a single drink or large group meal. Prices are competitive and the menu features regular weekly specials.
“We wanted to make sure we weren’t pigeon-holed into the ‘special occasion’ window,” said Michael Madrusan. “Food and beverage specials make us approachable to new guests. The offering is then backed up by quality produce and service that translate those guests into regulars. There’s no value in getting them in the door once. We want to build a community.”
Cutting back on seafood and meat
“Lamb and beef have increased exponentially over the past year with the drought,” said Paul Dewhurst, operations manager of Three Blue Ducks which has restaurants in Sydney and Brisbane and will soon open at UrbnSurf park in Tullamarine. “Seafood prices have also increased as demand is growing with more people moving away from meat. We’ve just removed prawns from the menus – justifying $33 to the customer for three prawns in an entree just wasn’t feasible.”
Ditching the delivery apps
Anthony Jaye lays much of the industry’s woes at the feet of food delivery apps. He says UberEats and Deliveroo make it easier for people to stay home (“once when it was raining, you’d just grab an umbrella”) while also pocketing too much in commission – sometimes 30 per cent – from restaurants signed on to the apps.
“Delivery platforms can be great if you’re a business with low costs specialising in one type of food such as burgers, fried chicken or pizza,” said Chris Baskerville, partner with specialist insolvency and business recovery firm Jirsch Sutherland, which has managed several restaurant closures around the country. “For a traditional restaurant with already tight profit margins, however, delivery partners are not always the greatest fit.”
Carol Salloum of Sydney’s Almond Bar has stopped using delivery platforms and instead offers a 10 per cent discount on all takeaway collected in store.
“I find people just want a discount all the time, no matter if it’s food or clothes, she said. “I figured if that’s what it’s going to take to bring people in, then fine – we can afford a 10 per cent hit without losing money. It also means we’re able to hand food directly to the customer and create a relationship, which is important for return business.”
The Three Blue Ducks restaurants have also really looked at the waste across all venues, said Mr Dewhurst. “We’re investigating how to turn products that might have been thrown in the bin into money making or money saving initiatives. Soap and cleaning fluid, for example, but also fish heads, spent coffee, leaves from vegetables, meat offcuts that can be made into specials, pies, sauces, stocks and garnishes.”