“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 per cent drop in sales.

Claudy Schenk, the owner of Hashtag Cafe on Grey St, says he knows Tauranga’s city centre is 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 thinks the cafe “wouldn’t do too bad,” Tauranga will soon be “booming” and his business will be “pumping”.

Claudy believes positivity and hope will help him through tough times, but he hasn't expected to be operating in a “ghost city”.

While the customer base has gotten “better and better”, it's still not enough.

Claudy says it has been a challenge to pay his rent in the last two to three months, with a 20 per cent drop in sales as a result of customer downturn and a quiet winter.

He says about 80 per cent of his customers are people working in the city coming for a coffee.

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

Claudy is not alone in his struggles. A recent survey by the Restaurant Association paints “a concerning picture” of the current climate within the industry.

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

Claudy says there has been a lot of stress, and he does 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 says.

Hashtag Cafe’s entire menu is made from scratch and Claudy says it takes “hours” to prep the recipes.

While he is sometimes tempted to “go the easy way,” he says he will 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 says 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, describes 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 says with a laugh.

The owner says his restaurant is “blessed” with returning locals who keep his business busy even through the quiet winter months.

He puts a lot of thought into who he hires, as he says the smallest mistake can 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 says.

“Everything is under a microscope.”

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

The owner has been trialling different ways to draw in the crowds including $30 steak nights - a dish priced so low it's 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 has risen from $19 per kg before the cost-of-living crisis to $35 - or $30 if the meat is on special.

He says food quantity has 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 says now they are $23 to $24 per 800 grams.

The Barn Burger & Grill owner Paras Acharya opened his restaurant in Mount Maunganui eight months ago and says the winter months have 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 reveales operators began to feel the impact of cost-of-living pressures on customer spending about halfway through last year, and that has 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 is the return of international tourists, who contribute strongly to trade over the summer 2024 season.

Restaurant Association chief executive Marisa Bidois says the past year has 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,” says Marisa.

“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.”

-Bay of Plenty Times.