Canberra’s dining scene is bracing for a shift as prominent restaurateur John Onzieme prepares to step away from his flagship establishment, Onzieme, citing unsustainable operating costs and an increasingly challenging business environment. The decision, reported initially by The Canberra Times, underscores the pressures facing high-end restaurants in the Australian capital, particularly as they navigate rising inflation and staffing shortages. This isn’t simply a case of one restaurant struggling; it’s a signal of broader economic headwinds impacting the hospitality industry.
Onzieme, known for its modern Australian cuisine and sophisticated ambiance, has been a fixture in Canberra for over a decade. Onzieme’s closure isn’t due to a lack of patronage, according to Onzieme himself. “We’re not closing because we’re unpopular,” he told the Canberra Times. “We’re closing because People can’t compete.” He specifically pointed to the escalating costs of ingredients, energy and labor as factors making it impossible to maintain the restaurant’s standards and profitability. The restaurant will officially close its doors on November 26, 2023.
The Rising Costs of Doing Business
The challenges facing Onzieme are emblematic of a wider trend within the hospitality sector. Australia’s inflation rate, while cooling from its peak, remains elevated, impacting the cost of everything from produce to utilities. According to the Australian Bureau of Statistics (ABS), the Consumer Price Index (CPI) rose 4.9% in the year to October 2023 , putting significant pressure on businesses to absorb increased expenses or pass them on to consumers.
Labor shortages are also a critical issue. The hospitality industry has struggled to attract and retain staff since the easing of pandemic-related restrictions. Competition for skilled workers drives up wages, further increasing operating costs. A recent report by the Restaurant & Catering Australia (RCA) highlighted that 78% of businesses are experiencing difficulties finding suitable staff . Onzieme’s owner specifically cited the difficulty in finding qualified chefs and front-of-house staff as a contributing factor to his decision.
Impact on Canberra’s Dining Scene
The closure of Onzieme will leave a noticeable gap in Canberra’s fine dining landscape. The restaurant was consistently praised for its innovative menu and commitment to local produce. Its departure raises concerns about the future viability of other high-end establishments in the city. The restaurant’s closure will also impact its 25 employees, who will be seeking new employment opportunities.
Beyond Onzieme, other Canberra restaurants are grappling with similar challenges. Several establishments have already reduced their operating hours or scaled back their menus in response to rising costs. Some have introduced price increases, but owners fear that this could deter customers. The situation is particularly acute for restaurants that rely heavily on imported ingredients, as the Australian dollar’s recent fluctuations have added to their expenses.
A Broader Trend in the Hospitality Industry
Onzieme’s situation isn’t unique to Canberra. Restaurants across Australia are facing similar pressures. In Sydney and Melbourne, several well-regarded restaurants have closed in recent months, citing unsustainable operating costs. The industry is calling for government support to alleviate the burden, including tax relief and streamlined visa processes for skilled workers.
The debate over the future of Australia’s hospitality industry is intensifying. Some argue that the current business model is unsustainable and that restaurants need to adapt to changing consumer preferences and economic realities. Others believe that government intervention is necessary to protect a vital sector of the economy. The Australian Compact Business and Family Enterprise Ombudsman (ASBFEO) has been advocating for measures to support small businesses, including reducing red tape and improving access to finance .
The closure of Onzieme serves as a stark reminder of the challenges facing the hospitality industry. It highlights the need for a comprehensive approach to address the issues of rising costs, labor shortages, and changing consumer behavior. Without intervention, more restaurants could follow suit, diminishing the vibrancy of Australia’s dining scene.
Looking ahead, the hospitality industry will be closely watching economic indicators and government policy decisions. The next key data release will be the December quarter CPI figures, which will provide a clearer picture of inflationary pressures. The federal government is also expected to announce further measures to support small businesses in the coming months.
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