Trust House-owned Masterton restaurant Apache Jack’s has closed its doors after not making a profit for the past three years.
All the Apache Jack’s staff retained their jobs and have been redeployed to other roles, Trust House chief executive John Prendergast said.
He attributed Apache Jack’s closure to current economic pressures such as the high cost of living, inflation, interest rates, and rising food costs.
“I think we’ve experienced a bit of a perfect storm,” Prendergast said.
“The impact has been hard on sectors such as hospitality.”
Trust House is not alone in its struggles, he said, noting several restaurant closures in Wairarapa and many across New Zealand after the covid-19 lockdowns.
Although Prendergast had started to observe a recovery in the sector post-covid, its after-effects have led to increased inflation and financial hardship in the hospitality sector, “together with extreme weather events reducing the supply of food, a tourism sector that hasn’t yet fully recovered, and customers putting their credit cards away”.
Restaurants nationwide are experiencing a downturn because dining out has become a luxury, because “spending is squeezed, so there are fewer people sitting at the tables”, Prendergast said.
Trust House has faced other financial pressures like rising labour costs because all staff are paid a ‘living wage’, which was increased by 10 per cent in September last year.
Customers’ cautious spending in the lead-up to October’s general election and difficulties in finding specialised staff have also strained the organisation, although those particular issues have now eased, Prendergast said.
A change in spending behaviour, with more customers now opting for a bar meal rather than dining in a restaurant appears to be more entrenched, however.
“Add in high inflation impacting other costs, and it all adds up to strong upward pressure on our overall costs of delivering a meal to the table,” Prendergast said.
Although Apache Jack’s is closed, the venue in Kuripuni remains bookable for private functions.
Its facilities will also continue to produce about 600 school lunches per day as part of the Free School Lunches Programme in Wairarapa.
Trust House has stated its commercial kitchens produce about 700,000 school lunches a year.
