A leading restaurant consultant has warned that more Melbourne fine-dining establishments will close given local and global economic headwinds, following the demise of Prahran’s Woodland House this week.
Woodland House is the latest Melbourne fine diner to shut in 2019, preceded by names including Highline at the Railway Hotel and Ramblr.
Restaurant consultant Tony Eldred said financial anxiety caused by Australia’s sluggish economy and the United States-China trade stand-off had compounded the woes of fine dining eateries, which make only modest profits even in more buoyant times.
“Yes, you can [expect more fine dining closures in Melbourne],” he said. “The longer the economic uncertainty goes, the more finer dining owners who are just hanging in there will drop off one by one.
“Most of the top-end restaurants are actually struggling financially or making very little. It doesn’t take much to tip them over the edge.”
On Thursday Woodland House owner-chefs Hayden McFarland and Thomas Woods announced their restaurant would shut. They had bought out their mentor, Jacques Reymond, in 2014.
The grand gold rush-era Prahran property had been home to Reymond’s eponymous restaurant for 23 years.
“We held out as long as we could, hoping for a magic wand to be waved at us, but we couldn’t carry on,” McFarland said.
“We just weren’t seeing the numbers through the doors in the function room upstairs … We’ve done our absolute best to ensure our small suppliers got paid.”
Eldred said fine-dining restaurants were often propped up by the fortunes of lower market eateries owned by the same restaurateurs or investors.
“Opening a single fine-dining restaurant is certainly not a way to get rich,” he said. “They have huge costs involved from decor, to table setting, to salaries and ingredients. But they can’t proportionally charge to cover that, unlike in Europe where fine-dining restaurants command more money.”
However McFarland argued Woodland House’s closure did not signal the end of fine dining.
“But maybe people don’t want to do it in a 120-year-old mansion,” he said.
Worrells Solvency & Forensic Accountants Matthew Kucianski said they were “seeing increasing pressures in the hospitality space and the stresses felt by Woodland House are not unique”.
The Reymond family still owns the property. A spokesperson says: “Jacques and Kathy are supportive of anyone with a vision who wants to do something amazing.”
CBRE food and beverage property expert Zelman Ainsworth said to be viable in Melbourne these days restaurants needed to go beyond delivering superb food and service.
“Entertainment businesses like Funlab (owners of Holey Moley, Strike Bowling, Juke’s Karaoke Bar) fuse food and beverage with entertainment. Hoyts and Village Cinema are doing it too,” Ainsworth said.
“That’s the next big phase – where you go out for dinner but there’s also another aspect. It isn’t just eat and leave; it’s eat and be entertained.”
Restaurant design is another drawcard, with open kitchens and unusual locations such as rooftops, hidden laneways and secret doorways becoming part of the experience, he said.
Ainsworth and Eldred agreed that the rise of premium-casual restaurants, which serve high-quality food at lower prices while turning over tables quicker than fine-dining restaurants and at lower prices, had changed the Melbourne food scene over the past 15 years.
Eldred cited restaurateur Andrew McConnell’s Flinders Lane all-day restaurant Cumulus Inc as an example. “It isn’t fine dining but is considered to be value for money. Places like that will be doing OK. Compare that to the fine-dining scene, the value for money is a lot better.”
Restaurant closures in 2019
Highline at the Railway Hotel, Windsor. Closed March 16. Now used as private dining rooms.
Long Chim, Southbank. Closed July 8. Replaced by Ging Thai.
Ramblr, South Yarra. Closed March 2. Leo’s by the Slice pizzeria and bar is opening in the space in late July.
Rockwell & Sons, Collingwood. Closed June 2. New concept coming in late September.
Woodland House, Prahran. Closed July 10. Seeking a buyer.
