The staggering numbers that show why no Sydney restaurant is safe

Rockpool executive chef Phil Wood and founder Neil Perry. Source: supplied

Neil Perry’s announcement this week that he’s closing Rockpool in Sydney should be celebrated.

A business that survives in any industry for 27 years is impressive and restaurants live in dog years.

As yesterday’s announcement that MoVida in Surry Hills will close after just four years shows even a chef as successful and high-profile as Frank Camorra does not always have luck running his way.

Even Sydney’s most successful restaurateur, Justin Hemmes of Merivale, has demonstrated ruthless flexibility in shutting down and rebranding sites within his group that failed to hit the mark – with some concepts changed within 12 months of opening.

Rockpool est. 1989, as the chef rebranded it when moving to Bridge Street in 2013, is an impressive testament to the resilience and relevance of Perry and his team over nearly three decades. Like Madonna, who’s maintained a long career by reinventing herself several times, Perry has changed and evolved since Rockpool opened long before the internet and smartphones arrived.

Like all entrepreneurs, Perry’s career also contains ideas that failed to fire, yet morphed into something else. His Spice Temple restaurants in Sydney and Melbourne are the descendants of the long-gone Wokpool concept.

But the announcement within a fortnight that three of the city’s best restaurants will vanish within the next two months has added an apocalyptic air to Sydney’s dining scene.

Both Mark Best’s Marque in Surry Hills and Perry’s Rockpool were consistent three-hat restaurants in the Good Food Guide, and MoVida, with two hats, was also up in the Pantheon.

Marque, like Rockpool, should also be celebrated for its longevity.

Best’s fine diner is a culinary high wire act that at times polarised diners. It’s been, at times, as confronting as it is brilliant. Over 17 years, it’s also let 100 flowers bloom as a new generation of exciting young chefs passed through that small kitchen and opened their own restaurants.

Greatness spawns competition.

So what felled these giants?

Restaurants are a complex ecosystem that’s like pop music for your mouth.

But no one has the magic formula for a smash hit – it’s gut instinct, self belief and hope – and in an era when people queue for the latest iPhone, the crowd moves on quickly to the next shiny new place to eat.

It’s a combination of fashion, entertainment and often location. As Perry once observed to Business Insider, he’s “in the nostalgia business”.

So ignore the hyperbolic hand-wringing that will once again emerge about fine dining being dead. It’s rubbish.

Frocking up and spending exorbitant wads of cash on exotic wines to accompany a lengthy and virtuosic meal still has its place – when Tetsuya’s, Quay and Shannon Bennett’s Vue de monde in Melbourne go, you’ll have a point – but a little like first class on planes, the market has contracted in a more thrifty era.

But part of what’s happening now is that it’s restaurant awards season and as the fact checkers call and critics prepare to hand out the gongs, it’s time for chefs to fess up if they want to make sure they’re sending out the right message on their business for the next 12 months.

And as the old Kenny Rogers song “The Gambler” says, you’ve gotta know when to hold ’em, and know when to fold ’em.

Chef Alex Herbert, who closed her Surry Hills restaurant, Bird Cow Fish, in 2012, while still in the black, told Business Insider: “There is only room for so many and even the best are at least smart enough to move on when they know the time is right.”

People are eating out more often, but the average spend has fallen. Basically, they’re blowing the same amount of their total income on meals, but not nearly as often on a big set piece dinner.

Eating has become just one part of the entertainment in a night out, rather than the primary purpose for going out, although the special occasion market continues as a subset of that.

Both Best and Perry moved with the trends.

They both have more casual restaurants in Melbourne and Sydney – in Best’s case Pei Modern, while Perry’s Rockpool Bar & Grill is now his flagship site, as the chef busies himself with Burger Project, opening his third Sydney outlet today in Macquarie Centre.

Perry cites brand confusion as a critical part of his decision to end the original Rockpool – diners were heading to the wrong restaurant, Rockpool Bar & Grill in Hunter St, or vice versa – and as the chef told Business Insider “it was pissing people off”.

Rebranding Rockpool est. 1989 as Eleven Bridge ends a mistake that saw 100 people a month turning up at the wrong restaurant. It also gives Perry free range to change the model once more; something he did to Rockpool several times during its life.

For Best, it was increasingly hard to make the maths of this culinary intensity stack up, and no doubt the physical demands also take their toll in a relentless industry.

The best in the business know when it’s time to change.

Andrew McConnell (left) in action. Source: Facebook/Builders Arms Hotel

Andrew McConnell, Melbourne’s most successful chef, also announced this week that he was putting an end to his highly lauded pub fine diner, Moon Under Water, after just four years.

The Builders Arms site in Fitzroy will evolve into a Chinese restaurant, Ricky & Pinky, still under his stewardship.

McConnell is the model of a savvy modern restaurateur, with establishments that constantly morph into new entities.

His St Kilda bistro, Luxembourg, was previously Golden Fields. Golden Fields now lives on as Supernormal in the CBD. His 2003 restaurant Mrs Jones in Carlton became Three, One, Two just three years later. His all-day CBD cafe Cumulus, is his longest standing current venture, dating from 2008, in a diverse portfolio that includes the fine diner and wine bar Marion and the steakhouse Meatsmith.

McConnell’s Moon under water will change in August to a Chinese restaurant. Source: Facebook

But while MasterChef and MKR made hospitality seem like an appealing career path to fame and fortune, the reality is far different, as Herbert, who opened her first version of Bird Cow Fish in Balmain 20 years ago, points out.

Her back-of-the-napkin calculation is that the Greater Sydney basin has around 23,000 food businesses in an area where nearly 20% of the population is under 14 years and the medium age is 36 years.

“That equates to one F&B business to every 201 people where the average medium age and number of children has a high representation of family groups, who are not your regular restaurant goers,” she says.

The industry’s peak body, the Restaurant & Catering Association, told the Productivity Commission last year that the average net profit for its 35,000 members was 3.6%.

That’s an improvement on recent years.

It’s worth remembering that there was a time when even a chef as successful as Perry was losing $5000 a week running Rockpool.

The restaurant posted losses for several years, with other parts of the empire able to make up the lost ground. Now Perry’s on a roll with his hamburger venture. His goal is 50 outlets over the next few years.

There’s a much bigger market for an $8.90 burger than Rockpool’s $150 four-course menu.

Herbert, who now works as a restaurant consultant, has a simple explanation for why some top chefs are drawing a line under their businesses at the end of the financial year.

“It is a really tough game,” she said.