The cafe made a loss of $46,732 in the first half of the 2025/26 financial year.
The cafe made a loss of $46,732 in the first half of the 2025/26 financial year.
The cafe at Whanganui’s Te Whare o Rehua Sarjeant Gallery is losing money, but the facility’s retail shop has more than made up the difference.
A report from gallery director Andrew Clifford said the cafe made a loss of $46,732 from July to December last year, with revenue of$261,274 and expenses of $308,007.
He told Whanganui District Council’s operations and performance committee the major challenge the operator faced was “the fact the building was never scoped to have a full kitchen”.
“They have to outsource most of the product they’re selling, which gives them a much smaller margin that most cafes.”
Clifford said initial busyness meant capacity was increased from 38 seats to 50, and that required extra staffing.
That September, elected members voted 9-4 in favour of providing unbudgeted funding of up to $271,336 to fund the cafe in its first year of operation, with the council hiring a contractor to run it.
Previously, the council ran an expressions-of-interest process for owners wanting to operate a cafe out of the gallery, with one expressing serious interest.
After the 2024 vote, then council chief executive David Langford told the Chronicle unbudgeted revenue from cafe proceeds would also be added into the budget.
“The net impact should be a reduction in rates because it will create a profit,” he said.
The fit out for the space was completed with funding from the $650,000 furniture, fixtures and equipment (FF&E) budget, part of capital expenditure for the Sarjeant redevelopment.
Clifford’s report to the committee said overall, the gallery’s retail and hospitality operation had a net surplus of $14,927 for the first half of the financial year, due to the shop’s net surplus of $61,660.
Whanganui district councillor Mike Hos. Photo / Mike Tweed
“We are working with the cafe operator to improve revenue and expenditure,” it said.
“This includes assessing the balance between cafe capacity and staffing, outsourced versus in-house products, portion sizing and pricing, as well as potential for extra revenue from event catering.”
The cafe has an average weekly turnover of $10,000, with an average spend per person who visits the gallery of $5.20.
Councillor Mike Hos, who is the former owner of the Rutland Arms and the Collegiate Motor Inn, said the biggest opportunity was to increase turnover.
“It’s not necessarily putting the prices up. We just need to get more of those people captured into the cafe.”
Clifford’s report said 50,259 visitors had come through the gallery’s front door in the first half of 2025/26.
Councillor Charlotte Melser, former owner of the Citadel cafe, said the hospitality sector was “already on struggle street” before the current fuel crisis, and had declined significantly within the last two months.
“People are struggling, and that (hospitality) is one of the areas of retail that is taking a hit,” she said.
“Through this period, I really appreciate the support you (Clifford) are giving the cafe to soundboard how to mitigate this crisis.”
Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily Whanganui District Council.
