Restaurants should have empty plates, not empty spaces, but that is what many eateries in Melbourne are struggling with.
Restaurant consultant, Tony Eldred says that customer numbers aren’t declining but instead the decrease in average business is because the number of restaurants is increasing faster than the population.
“Due to television and the media, people are seeing food as the art of the century,” said Mr Eldred.
“In reality the restaurant industry is about 30 per cent over subscribed compared to its customer base, in Melbourne and Sydney particularly.”
Victoria’s restaurant industry revenue has declined by 2.3 per cent according to the Dimmi Australian Dining Index, however Australia as a whole has experienced a growth of 3.17 per cent, or a $254 million increase in revenue.
Mr Eldred says that in times of economic uncertainty customers tend to move down market.
“They still dine out as often as they always did, but they just don’t spend as much.”
According to the Dimmi Australian Dining Index, the average spend dining out is $54 per person, which is down from $64 in December 2011.
“The underlying issue is that there is definitely a significant over supply of restaurants in Melbourne,” says Stevan Premutico, CEO of online restaurant booking service Dimmi, who includes Jacques Reymond, Flower Drum and Matteo’s in its clientele.
Mr Premutico says restaurants need to take advantage of digital media to give customers a platform to share their dining experience, therefore attracting more bookings.
“Using an online reservation system is affordable and most importantly allows restaurants to connect to the online world, build a customer database, reduce operating costs and boost revenues,” said Mr Premutico.
“To survive in 2013, its critical that restaurants are doing everything they can to increase bookings, attract new diners and ensure they are plugged into the online world.”
According to the Dimmi Australian Dining Index, mobile bookings represent 33 per cent of online bookings in Australia.
With last minute bookings (under six hours before dining time) up 43 per cent this year and more competition for customers than ever before, restaurants are hard pressed to secure seats.
Image credit: Amanda Valmorbida
“You have a small fraction of the market that has caught onto the new world wave and is booming, and then the rest appears to be feeling a big squeeze,” said Mr Premutico.
Mr Eldred says that restaurants can still do well in today’s competitive market by simply operating at high standards.
“Restaurants that run at a very high standard don’t need to attract customers or market their business, because word of mouth will keep the place full,” he said.
“You don’t need to spend a huge amount of money on décor because really good food and really good service will win out every time.”
Mr Eldred suggests struggling restaurateurs try mystery shop surveys to check if marketing strategies are working.
“Otherwise your money is wasted luring people in who are going to try you once and never come back.”
