Rising rents and strong competition giving chefs food for thought

It started as the fulfilment of a long-held dream. In 2014, chef Stephen McArdle launched Stanley’s, bringing an 18-seat wine bar, a 24-seat restaurant and private dining experience to a listed building on St Andrew’s Street in the heart of Dublin’s city centre.

The restaurant’s modern Irish cuisine soon found favour with critics and customers alike.

“It took a lot of financial investment to get it up and going and to get it up to scratch, but it was doing very well and we were building a good reputation,” McArdle recalls.

Then his dream began to turn into “a nightmare”. “I found it very difficult to compete in that area as a standalone restaurant, because you have so much competition around there,” he says, adding that the larger restaurant groups have entire marketing departments handling reservations, filling seats every day, giving discounted meals and offering free cocktails.

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“What appeared to me was that all those restaurants were less driven about food and more about bums on seats...they were basically opening bars that served food,” he says.

While Stanley’s, with its extensive sherry menu and focus on small producers tried to differentiate itself, the sums weren’t adding up and in 2017, McArdle took the decision to close.

Cautionary tale

McArdle’s may be a cautionary tale, but not an unusual one – for independent traders hoping to make their mark on Dublin’s restaurant scene, a combination of soaring rents, tight labour market, and the marketing heft of players such as Paddy McKillen jnr’s Press Up, with 11 restaurants, or Dylan McGrath’s group, which now has five restaurants under its belt, can make survival a struggle.

"Operating a small business is tough and it is absolutely increasing year-on-year financially in terms of costs associated with running one," agrees Sean Drugan, owner of The Vintage Kitchen on Poolbeg Street. "I think any small business or operator is constantly on the edge of success and equally failure."

Drugan is keen to point out the upsides of his business. “I feel very lucky and privileged to be in the position I am in, to work for oneself is something to cherish and not for one moment to take for granted,” he says.

“[This] little small business has afforded me and my family a secure and warm home. A car. Some nice holidays etc.”

Corkage charge

In January, Drugan introduced a corkage charge for the first time of €3, on the back of his rent being increased “substantially”, while he has also lost great staff over the years due to the lack of affordable accommodation.

It makes him question whether small business can have a future. “It probably doesn’t, unless you are being bankrolled by backers,” he says.

Rents are undoubtedly part of the problem. At Stanley’s, McArdle was paying €1,500 a week, which put too much pressure on filling seats.

“I wasn’t able to do what I wanted, I wasn’t able to serve the food I wanted. I had no freedom there as a chef,” he says.

The cost of doing business is is having a wider impact on the restaurant market, which, McArdle says, is becoming “so diluted and contrived”.

“You’re not seeing restaurants opened by chefs anymore. It’s not happening,” he says, noting that chefs today are foregoing Dublin 1 and 2 in favour of the suburbs. “It’s more about making money and not so much as making a good living.”

Finding a location can also be challenging for the sole trader. When Michael Sheary decided to go out on his own with a lifelong friend delivering counter service chargrilled burgers, he first set his heart on a city centre location for his restaurant Bujo.

“We had a property agent on our books for 18 months looking for properties. I walked the streets of Dublin dozens of times, making offers to no avail,” he recalls. “You’re definitely at a disadvantage not having a track record.”

Speculative market

Sheary found that it was becoming a speculative market, with key money back in force, and some owners looking for in excess of €400,000 for prime city centre locations.

“That’s a real challenge for independents, who will never be able to give that,” he says.

On the plus side, the rising rental market meant that McArdle didn’t lose when he decided to close his venture. On taking his 20-year lease, he paid €20,000 in key money, but was able to sell it on for about €155,000, which meant he could tidy up a bank loan on the premises, and still have enough to start again.

One way to cope with the challenges of the sector is to think big from the start

McArdle says even these larger outfits won’t be completely immune to the challenges of today’s restaurant scene.

“The main problem we had was getting staff and training staff,” he says, noting a shortage of chefs, and “especially front of house staff”.

His comments come in advance of the launch of The Ivy on Dawson Street, which has plans to hire 151 employees.

One way to cope with the challenges of the sector is to think big from the start. To deal with staffing difficulties, Sandymount-based Bujo recruited like a multinational, hiring out a room in the nearby Aviva stadium for interviews, offering more than the minimum wage, and putting people on the payroll from between six to three months before it opened.

The approach paid off. It had 20,000 people look at its recruitment ads on Jobbio, received more than 700 applications for the 26 available roles, and conducted 150 interviews, “some multiple times”.

“You can never invest enough in recruiting right,” Sheary says.

Expansion

Now the restaurant, just six months on from its launch date, is eyeing up expansion.

Bujo now has agents knocking on its doors, looking for it to expand, and has even had interest from overseas.

“It would be a lie to say we don’t have ambitions to do something further,” he says. “We will do it, and we will expand, but we will do it when it’s right and we won’t rush into it,” he says.

For those struggling with maintaining a smaller proposition, there is always the option of going to work for someone else.

“Small operators are always on the edge of the cliff I would think, and mostly we enjoy the view, but sometimes the wind, the rain and the current are too strong,” says Drugan.

McArdle is now happily ensconced in bucolic Graiguenamanagh, Co Kilkenny, having opened Barrow's Keep, which is doing 40 covers maximum each night "without any pressure to turn tables".

“I’m cooking the best food I’ve ever cooked, because I’m free,” he says. The restaurant only opens from Thursday to Sunday, which “allows us to live as well”.

“In Dublin, I was working seven days a week trying to make it tick over, and had no quality of life.”

Would he go back to Dublin? “Not a chance.” That dream has faded.