Tauranga’s hospitality operators doing it tough this winter

“Sometimes it’s hard to smile.”

These are the words of a Tauranga city centre cafe owner who says paying his rent has become a challenge after a 20% drop in sales.

Claudy Schenk, the owner of Hashtag Cafe on Grey St, said he knew Tauranga’s city centre was quiet, but after a few successful years operating out of his food truck and a stall in the former Our Place container village called Hashtag Street Food, he thought the cafe “wouldn’t do too bad,” Tauranga would soon be “booming” and his business would be “pumping”.

Schenk said he believed positivity and hope would help him through tough times, but he had not expected to be operating in a “ghost city”.

While the customer base had gotten “better and better”, it was still not enough.

Schenk said it had been a challenge to pay his rent in the last two to three months, with a 20% drop in sales as a result of customer downturn and a quiet winter.

He said about 80% of his customers were people working in the city coming for a coffee.

“I’m expecting another two or three tough months and then summer is coming back.”

Schenk was not alone in his struggles. A recent survey by the Restaurant Association painted “a concerning picture” of the current climate within the industry.

Businesses across the sector were grappling with significant challenges including declining revenues, reduced customer numbers, and deteriorating mental health among operators, with 54% of business owners nationwide reporting that their mental health had worsened as a result of these ongoing pressures.

Schenk said there had been a lot of stress, and he did his best not to take it home to his family.

“When you have kids, you want to go home and be happy, but sometimes it’s hard to smile,” he said.

Hashtag Cafe’s entire menu was made from scratch and Schenk said it took “hours” to prep the recipes. While he was sometimes tempted to “go the easy way,” he said he would never stray from the business’s concept - freshly made food from a range of cultures.

He has had to increase his menu prices, but he said he believes the menu is “very cheap” for what he delivers.

Salva D’or Italian Restaurant & Pizzeria owner, who did not want to be named for privacy reasons, described working through the cost-of-living crisis as “exhausting”.

Salva D’or Italian Restaurant & Pizzeria.

“I’m starting to see some grey hairs in my beard,” he said with a laugh.

The owner said his restaurant was “blessed” with returning locals who kept his business busy even through the quiet winter months.

He put a lot of thought into who he hired, as he said the smallest mistake could make life-long customers walk away.

“If someone is spending their money, they would rather spend it on a place they know they can trust rather than experimenting with new places,” the owner said.

“Everything is under a microscope.”

The cost-of-living crisis has meant most of his customers only visited when they celebrated special occasions.

The owner had been trialling different ways to draw in the crowds including $30 steak nights - a dish priced so low it was making no profit.

“In the end it’s just numbers. If you get a good amount of people in your restaurant, it just kind of balances out at the end.”

Scotch fillet had risen from $19 per kg before the cost-of-living crisis to $35 - or $30 if the meat was on special.

He said food quantity had changed too, with many food items being sold per 800 grams rather than per kilogram.

King prawns used to be sold at $16 to $17 per kilogram but he said now they were $23 to $24 per 800 grams.

The Barn Burger & Grill owner Paras Acharya opened his restaurant in Mount Maunganui eight months ago and said the winter months had slowed business right down.

It was hard on Acharya both physically and mentally as he was on deck most of the week, increasing his hours from when he was a chef.

“Good times will come.”

The latest Hospitality Industry Report from the Restaurant Association revealed operators began to feel the impact of cost-of-living pressures on customer spending about halfway through last year, and that had continued through 2024.

The combination of extreme weather events, rising food costs, declining customer traffic and spending, increasing wage costs, cost of living pressures, and election year uncertainties had significantly affected overall industry productivity and profitability.

However, a notable positive aspect was the return of international tourists, who contributed strongly to trade over the summer 2024 season.

Restaurant Association chief executive Marisa Bidois said the past year had been one of the “most challenging periods” for the industry, coming on the heels of several difficult years.

“The cost-of-living challenges and other pressures are now compounding these issues, threatening the survival of some businesses,” Bidois said.

“Despite these hurdles, our members are showing extraordinary determination. Business owners are keeping their heads down and doing everything they can to survive, in the hope of brighter times ahead.”

Harriet Laughton is a multimedia journalist based in the Bay of Plenty.