Top Chef Canada winner Dale MacKay closes his two high-profile Vancouver restaurants
MacKay said he made classic restaurateur mistakes
VANCOUVER — Two high-profile restaurants run by celebrity chef Dale MacKay served their last suppers last Saturday and closed their doors for good.
“It was hard and emotional,” MacKay said of the last service. “Everyone stuck through it to the end.”
MacKay, who won the Top Chef Canada title last summer on Food Network Canada’s show of the same name, said he made classic restaurateur mistakes.
“I have to live with that,” he said, in a phone interview. Just before winning the Top Chef title, he opened Ensemble, a bistro on Thurlow St.
MacKay had previously cooked under the famously difficult British chef Gordon Ramsay as well as under the hugely respected New York chef Daniel Boulud, a partner at the ill-fated remake of Lumiere restaurant and at db Bistro Moderne in Vancouver. (Lumiere was drama central in 2007 when ‘Iron Chef’ and co-owner Rob Feenie was booted out to be replaced by MacKay, under Boulud.)
MacKay opened Ensemble Tap, his second restaurant, soon after opening Ensemble. Both were located in downtown Vancouver, where rent prices feast on restaurant profits. He was paying $40,000 in monthly rent for the two locations. “You crunch the numbers, you do your best to forecast and try to attain that,” he said.
“Ensemble did very, very well right off the bat. It was a success. We had good feedback but I went in a little under-capitalized into Tap,” said MacKay. “It’s a big space. It’s not Gastown or the East End. The rents are very, very high. In the scheme of things, a mom and pop can’t sustain itself downtown without very, very big capital.”
When I reviewed Ensemble for this paper, I noted the good value. Most dishes were under $20 and were well-crafted with superior ingredients.
According to restaurant consultant Richard Floody, running a restaurant is a tough business, especially in B.C. “The awful stat that’s out there is that 85 per cent go under in the first two years. Once past that, you’re doing okay.”
One of the problems in Vancouver? It’s a sweet one. “Vancouver has many, many wonderful restaurants. We have too many of them. You really have to know what you’re doing,” said Floody, past chair of the B.C. Restaurant and Food Services Association.
He said B.C. liquor regulations are tough on restaurants. “It would be nice for them to be able to buy liquor wholesale. That would certainly help.”
Also, restaurateurs recently took a hit with minimum wage increasing from $8 an hour to $10.25 an hour ($9.50 for servers) just as they were recovering from the recession. “If the lower ranks get a raise, people up higher get a raise, too,” said Floody. “It takes it up to 20 per cent.” And Vancouver rents are hard to swallow. “It’s a huge factor,” he said.
Even MacKay’s celebrity status is not an ace in the pocket. “Being a celebrity helps initially but at the end of the day, the public makes the decision.”
Says Floody: “I used to do restaurant openings. Now, they come to me and say they’re losing money. I either have to tell them to sell and get out or lots of times, problems can be fixed. It’s really about teaching restaurateurs how to be business people.” There are a lot of talented chefs who aren’t great business people.”
Says MacKay: “I learned quickly that opening a restaurant in the heart of Vancouver is something I should have done after building my business and expansion capital in markets that support my restaurant business plan. As it is in the Vancouver core, with the rents being so high and the market saturated with fabulous restaurants, I’d have to subsidize both operations far longer than makes good business sense; plus I have a young son to raise and he remains my priority.”
The “fabulous” restaurants that competed in his market could be summed up in these words – Earls, Joeys, Cactus Club. Ensemble Tap was surrounded by these super-successful chains. “They have a massive influence,” said MacKay. “They’re polished, well-run, very structured and when that’s been engrained over the last 20 years, that’s where my generation goes for dinner for the same price point [as his restaurants]. They have all the bells and whistles and a classy atmosphere. I can’t say enough [good] about these groups but I don’t have $4 million to put in,” said MacKay.
MacKay says of four major cities he has worked in (including New York and London), Vancouver has been the “hardest market ever” citing its smaller population and competition from great, inexpensive ethnic restaurants where people could eat out daily.
“Restaurateurs want to offer good value but people don’t fully realize it’s just not the food costs. Besides rent, there’s insurance, fuel, maintenance. Food is a fraction of what it costs to run a restaurant,” he said.
MacKay says opportunities are coming his way and apart from doing some consulting work, he will most likely head to his hometown, Saskatoon, Sask., where he has family and friends.”
“I’m pretty sad but at a certain point you have to make emotional decisions if the numbers aren’t working and you don’t have enough capital. I’d never put myself in a position where I couldn’t take care of my staff.
“I’ll pick up and continue on. I do have to say I’m proud of what we did. I’m still very ambitious and exactly the same chef – even better. I’m smarter and learned key lessons. A lot of successful people have had failures. I’m trying not to look at this as a failure but a bump in life. I feel positive about the future.”
I have a bit of a soft spot for parties that roll the dice and gamble trying to open and run a small business, given many family members also opened small business after a lot of blood sweat and tears.
It is without question the market is glutted with restaurants…simply drive by any mall and see what proportion of the mall is a food outlet.
One of the reasons I noted this story was I think it is a good canary in the mine re: the economy. Here in Richmond a restaurant announced its closure after 20 years. This could be due to the economy and/or the owner not wishing to sign another lease.
When peoples disposable income goes down….eating at restaurants will decline.
I blame much of this on our typical problem….Gov’ts and their greed..
Gov’t could care less…..whether a business stays opened or closed, (other than perhaps loss of business license revenue.) Businesses pay triple net…which include Property Tax to Local Gov’t. If they close…the Landlord has to pay it….which of course can become quite a increasing fiscal burden when one loses tenants .
However, in the real world, we have the ripple effect. The businesses lay – off employees, many are often students…..suppliers lose clients, more layoffs etc.
Regardless, I submit that as the overall collective bubble bursts, we will see a major contraction in many businesses, Big and Small and In- Between.