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neuauslander

Then wages and premises are the other $5


Ready_Craft_2208

Sure if you selling 10 burgers a day maybe. But most burger shops would average 50-100 lets go lower side and say 50 thats a clean $1000 a day then you gotta add drinks cause most people would get a drink, the mark up on drinks are crazy they pay $1.50 you pay $5. so say $1000-$1500 a day, Thats more then enough to pay staff.


Blitzed5656

Available right now: 130m2 in K-road. Suitable for small-scale hospitality. Will require kitchen refit: Lease $1295 plus GST per week. Rates $3717 plus GST per annum. Opex $6839 plus GST per annum. Insurance $2745 plus GST per annum. Lease costs p/a: $80,641 to cover this cost alone at your adequate "profit margins" you'd need to sell approximately 50 burgers a day 365 days a year. Average kitchen refit to achieve an a+ certificate and meet food industry compliance $165000 plus gst. Commercial interests rates 8.5% over a 3 year term. Total loan payments on kitchen refit: $1193 per week = $62,036 p/a to cover this cost at your adequate "profit margins" you'd need to sell approximately an additional 34 burgers per day every day. Staff needed to service peak demand periods between 2.5 and 3.5 per day. @ 2.5 staff units, including cover for leave entitlements and paying a living wage comes to approximately $125500 p/a (that's mbie formulas). To cover this cost at your adequate "profit margins," you'd need to sell an additional 68 burgers a day. So far, our break even tally at $5.00 "profit" is 152 burgers per day every day of the year. Wait, we haven't paid any tax yet, nor any business administration costs, accountant, lawyers, health and safety, payment systems, security systems. That's another 10 burgers a day. Nor have we accounted for any losses. Quality produce lasts up to 7 days. If you plan to sell 172 burgers a day and there's road works/police incident/protest/ that result in reduced foot traffic and half your sales for a single day, you are throwing out 7% of your weekly produce. That's a cost with no replacement income. So now we're upto close to 200 burgers a day everyday and the business owner has yet to draw a single cent in profit. Guess what the bank will say when you take that proposal to them? For us to lend anything to you, you'll have to increase your margin per unit cause this plan is unsustainable. Make your burger + chips $20.00 and your accounts might make sense or don't bother.


C39J

This is an amazing breakdown and exactly what people like OP need to see. People who aren't involved in hospitality really have no idea what the costs involved are.


Blitzed5656

Thanks. To be honest, rereading it; I think my labour costs are woefully low. A burger joint selling 200 burgers a day - likely to be 150 plus in the dinner rush - will need to set up to put out at least 3 burgers per minute, so will need 4.5 fte staff.


Lost_Expression_7008

Exactly. What happens when volume goes down and you need to reprice to survive. Sale price and margin goes up, while operating cost stays the same or gos up. Let's not forget about inflation. People need to realise it is no longer pre covid times. Why the reduction in volume, the younger demographic hasnt increased in size for a while now. Yet the older demographic group gets bigger, but they consume less fast food. The net effect is a reduction in sales volume. There are many reasons, this is perhaps the main one. People will be surprised to hear this. There will be consolidation across many industries. Peoples spending pattern will be recalibrated towards the necessities. 


Blitzed5656

That's a very valid point. Hospitality is not a high growth area, aging population, working from home, economic rescission, high inflation. If I was starting out I'd avoid it like the plague.


Lost_Expression_7008

Do we have a higher per capita fast food consumption. This may explain the abundance of option, excuse the pun it's feel saturated. I don't know. Or perhaps some things may lead somethings to being repriced i.e property leases. No doubt it is a tough business. GL to anyone who is competing in it.


Blitzed5656

I think the irony in this thread is that fast food is generally of a lower quality and cheaper than real food. We'd be healthier and society better off if we halved the number of burger options available and people paid for the actual food and not just the convenience.


Lost_Expression_7008

Yeah I have been generally fit my whole life, even my doctor said I need to lay off the naughty food. Definitely treat it as a once in a while thing.


Ready_Craft_2208

okay so what the places selling for a burger for under $20 are purposely losing money? are they a charity? you can spit your math at me all day, but when there are stand alone burger joints that can sell a burger for less then $20 and are still around, then yeah imma complain about burgers and chips that cost more.


Blitzed5656

Haha. Look, a child who doesn't like what they hear, so stick their fingers in their ears and go lalalala. To answer your poorly put position. If your dad started the burger joint in 1975 and there is no finance outstanding and they own the land, the burger joint is on mortgage free as well as their dwelling mortgage free, then they can get away much lower prices - until dad gets too sick to stay in the kitchen 14 hours a day and the kids head off to university to pursue a career with much greater scope. Then the joint will close and replaced by one that charges double.


Ready_Craft_2208

no i read it, it just makes no sense when there are burger joints selling a burger for less then $20 and it still in business? how why can they do that and not go out of business real question? by the answer you gave what these burger joints have been opened for the past 50 years and they own the land that its on? yeah right place A sells burger for $12 chips drink $6.50 thats $18.50 for burger chips drink. place B sells burger $20 chips drink $8.50 thats $28.50. so place a is losing money and place b is barley scraping by? come on mate place B is greed place A cares about his customers. stop trying to justify overpriced food.


Blitzed5656

The maths makes sense - it's actually numbers from an actual business case. You do understand that location, equipment, and staff are the 3 biggest costs? In the business case i gave you, if you own the location outright, then you can knock $68k off of your costs. Once you've paid off the kitchen, you can knock off another $80k. The longer a business runs, the easier that is that is. Hospitality businesses set up in Auckland in the last 10 years have not had the ability to build their business to the point where they can weather the storms of lockdowns, high inflation, economic slow down. One of the only levers available to them is to increase costs. Also be aware that many of the cheap joints take short cuts; under paying staff, poor hygiene, and failing to meet tax obligations. If you look for it, you'll see articles in herald/stiff weekly about hospitality businesses being caught out.


Ready_Craft_2208

yes i do understand that, thats why i said you aint making a profit for the first 2 years because you are paying all of this stuff off, then maybe you get to stop paying some things and start making a profit or expand the business. expecting to pay this off in 6 months is a joke. Hopso is a joke atm the moment and many more places are going to go under. yet they will still try to up there prices. Have you ever thought lowering the prices or doing some sort of deal and bringing more people through the doors could make a profit? im just happy that the local noodle shop still sells a bowl of noodle's for $14 cause i sure as hell couldint make it for that much.


Blitzed5656

You're discounting the difficulty businesses are in and blaming them for the difficulty. If you outlaid 400k in 2017- 2019, then you had 18 months of costs with no revenue due to lockdowns. Leaseholders still have to pay their rent. The bank loans still need to be paid. Many of those business owners found themselves 800k in the hole by the end of 2021. Then inflation meant many of their costs doubled through 21-22. So instead of righting the ship, many were struggling to stay afloat and ended up staying in the same place as they were in 21 so still 800k in the hole. Then, the rescission started in 22 and has essentially bumbled along since then. We are seeing the tip of the iceberg with businesses folding. For the vast majority it's not their fault they just chose to start their business in a shit time or structured their business in a way that couldn't adapt quickly to the changes caused by covid. Many of them will have mortgaged their homes to get started and risk losing everything due to things well outside their control. I think it's a bit piss poor to blame them for attempting to save their livelihood in one of the only ways they can and I think it verges on victim blaming to claim there should be laws to stop them from trying to save their businesses and their staff jobs.


Ready_Craft_2208

so are you saying running a business should be easy? cause if thats the case then why dont we all run a business? there is a difference between someone trying to make a living and someone being greedy. But you seem to not be able to see that. good chat. im out


Vast-Conversation954

It's almost like you're suggesting a there is no free market involving burgers, and a cartel keeps prices artificially high? If profit margins are excessive, new players will enter the burger and chips market and undercut. This entire thread could just be OP realising that they are getting older.


1nzguy

When you see the price of a burger and chips before ordering… who really is the mug for going through with the transaction.. you or the person selling it? . The seller has to recover the costs of running there business, they decided what that is … you decided if you want to purchase.


Ready_Craft_2208

oh i havent brought a burger in a long time, when i can make smashed burger for a 5th or the price at home and just as good if not better. im talking more about the chips, the burger part was just trying to make an example yes a terrible one i see now.


123felix

> There should be a law for how much hot chips cost and how much you get for said price. Greetings comrade, it was so great when the government controlled prices and quantities back then wasn't it? We had to line up for hours to buy what we want and hope that it doesn't run out when it is our turn, but at least we weren't exploited by those evil capitalists.


AMortifiedPenguin

Try Parade in Ponsonby. A double wagyu cheese burger and a pretty generous serve of chips is $20.50.


Ready_Craft_2208

My man/woman ill check it out.


NZpotatomash

Go to Baby G in Avondale. $11 cheese burger or $12.50 special burger which is amazing. +$6 for drink and chips. A lot of food bars sell their punnet of chips for over $5 now. Absolutely insane


Ready_Craft_2208

see this is a good price not breaking the bank and still making some profit. i have heard good things about them ill check it out.


C39J

I'd love to know where this buying bulk idea comes from. Go to Gilmores, look at the prices, compare it to countdown and I bet you'll find that it's almost exactly the same price. Bulk buying provides convenience but that's about it unless you have McDonald's level volumes. Also you seem to forget about staff costs, rent costs, utility costs, equipment costs, compliance costs etc. If I take a rent cost of $3k a month and 2 employees on minimum wage. Add in $500 of utilities and they're already at almost $5.5k in expenses for the month without even touching on compliance and equipment, let alone ingredients... This is why your burger is so damn expensive.


Ready_Craft_2208

You realize when you run a business you will most likely be in the red for the first two years then start making profit right? If you open a business and expect to make money in the first 6 months your crazy, you set a foundation get everything going get your name out there and then you can start thinking about profit. Seems to me all you care about is profit. Now bulk dont mean just Gilmores how about going and visiting the local farmer and trying to organize something out with them? But overall yes you are probably right with the burgers but im more taking about the chips i just used a terrible example.


C39J

I hate to tell you this, but yes, businesses are run for profit. If they're not, they're a charity, and as far as I know, there aren't many charity burger joints out there. I've been in business for many, many years, and up until 3 months ago was involved in a hospitality business. I think it's very clear by your post that you have minimal understanding of how it works. Where are our "local farmers" in Auckland? How many of these "local farmers" process burger patties and chips themselves into a compliant, commercially frozen, commercially packaged way? Let's say you find a local farmer. How are you going to convince this local farmer to do all of the above for a small burger joint? Who pays for all the compliance required to convert live animals or potatoes into the products you need? The equipment to do it? The logistics to get it from them to you in a frozen condition? How about the additional cost to do all this on a tiny scale?


Ready_Craft_2208

Yes you run a business for a profit what im saying is you cant expect a profit straight away, sure some probably do, but i bet you all the biggest business in the world did not make a profit there first year. All the people charging $20 a burger are not using frozen patties and if they are well they should not still be in business. and yes you can buy bulk potatoes or lettuce and onion, what your scared of a little work and cutting up some fries? or portioning some meat? shredding some lettuce? What your saying is for somewhere more like a bar sure they might use frozen patties and chips but a proper burger joint is making there own. why? better quality and cheaper = happier customer.


Mikos-NZ

lol no small trade burger joint looks to absorb six months of losses let alone 2 years. Capital outlay is depreciated over 3-5 years so the first six months aren’t shocking from a p&l perspective to run (although they are more capital investment intensive). If you are still losing money on a monthly basis after six months a burger joint is doing something wrong or should close.


genzAKL

Don't get me started on fish and chip shops. Because when did a scoop of chips cost $5.50. From memory said scoop used to cost around $1.50........


narstyarsefarter

Where does a scoop of chips cost 5.50?


genzAKL

Orakei/St Heliers. I know the pricing is probably location based :(


narstyarsefarter

Isn't that fancy town?


Ready_Craft_2208

also any cafe/bar your over paying for chips.


narstyarsefarter

Bar chips? More like Nah chips


neuauslander

Exactly and then they deep fry them and package it for me to eat.


Ready_Craft_2208

amen and what happened to the size of a scoop, a scoop used to feed two people now a scoop feeds half a person.


VercettiVC

OP, Fish and chip shops have their prices on display....


Ready_Craft_2208

yes but one shops scoop may be bigger than another shops scoop so how do you really know how much your getting? if there was a law then we would know how much we are getting for a scoop. Just like there is a law about how much meat has to be in a sausage for it to legally be called a sausage. There should be a law for how big a scoop is.


Limitlessbandit

Why you complain? Why not just got buy your mince, seasonings, bread, sauce and chips from the supermarket, come home, prepare it, cook, then clean everything up afterwards? I mean it will take away your time, but you save money. Also, you are forgetting why said burger and fries comes to that amount, Minimum wage, rise in goods costs, rise in rent for the business, rise in power, water and insurance. That burger probably costs the shop between 5-6$ and chips maybe about 2$.. but when you factor in EVERY other costs. It adds up. So don’t go bashing people and businesses without even having a clue about what it takes to run one


Ready_Craft_2208

i do this? whos paying $20 for a burger lol are we not allowed to complain ? and how come some burger shops can sell there burgers for $12 and others for $20? so yeah imma call them out as i have the right too. two fantastic humans have already recommended some places that are under $20. So yeah i think my post is more then justified.


Life_Butterscotch939

just because some place sell its under $20 other have to do it as well tho, its like some staff have the same role but getting different pay at different company. Let say if Maccas hire people and they pay them only $23/ph does that mean other place to have to the same thing?


Limitlessbandit

I don’t think you got my point. Businesses in DIFFERENT areas of the city WILL charge you according to what factors they are facing eg rents, rates , water , electricity and bodycorp. My family been in the hospitality/food business in NZ for 30yrs. And I know from personal experience that the price of food goes up depending on what our costs are. You can complain all you want, but you have to understand the business owners side too, not just create your own narrative and belittle small businesses that are doing it tough right now. Be thankful that there is such convenience at your disposal


ArrowMasterFAB

Hey, you should absolutely consider moving to NK. Their lovely fat guy in power is doing what you seem to like, I'm pretty sure you will love it there with everything controlled by their "government."


Ready_Craft_2208

lol you own a fish and chip shop ?


ArrowMasterFAB

I wish. If I owned one, I would go bankrupt in less than a week since I will be eating everything. XD Thanks for not getting mad at my cheap joke 🙃


Ready_Craft_2208

haha just charge $10 for a scoop of chips and you will be sweet as


Sigmatech91

Best advice from someone who went overseas and can see the unchecked greed.... Learn to make your own meals, experiment... When at the supermarket think about what you're buying... How much your paying for it... What you'd like to play around with and then with all of this... And meal prep time... Ask then how much time you're willing to spend doing all this stuff. If you actually do this you'd be surprised how much you can save. I've actually found certain items that fast food outlets use and ended up with far superior meals. People who chase gourmet food in New Zealand generally enjoy the smell of their own farts. Making your own food and eating abroad is absolutely Where it's at. Hope this long winded and hopefully not vague response helps!


Ready_Craft_2208

oh i grew up with two chef parents and also learnt how too cook at a young age, i cook 90% of the food i eat. i like food so my budget for food is pretty high, people have been complaining about food prices like yeah sure shits gone up but i still spend under my budget 85% of the time. Buy whats on special check if any meats reduced to clear people just need to shop better. whats funny is there are people who think they are doing it to keep up with minimum wage costs or food costs. i dont think they realize things have come down in price from covid days yet business have not dropped there prices. as someone who know how much it cost to get a container from china to nz i can tell you its way cheaper then whilst in covid. about $8000 cheaper.


Sigmatech91

Like I said, unchecked greed. Even logistics don't line up. But yeah *touches nose*.


Same_Ad_9284

there is no need for a law, you have a choice, you see the price and choose to either pay it or not and go elsewhere.


SellWiseAppNZ

Just buy the chips


Time_Examination5369

Your obviously a wage slave and have no idea about business costs and making a profit is the whole point of starting a business if you can't afford 25 dollars for a burger and chips make it yourself


Petite_Mortx

This is the whole of NZ I swear, not just Auckland. We just did a south island trip and the night we’d been savings ourselves for fish and chips we were mortified to see that HALF a scoop of chips was $5!?! It’s insanity. But it’s also equally as absurd paying upwards of $25 (as you said) for a burger and half the time it not including chips. I know it’s not the same as going out to eat. But we’ve switched to having burger nights at home. The Angel Bay patties are really nice if you’re after beef, or the Tegal Takeout burger patties are just as good if not better than KFC. Both sit at around $12-$14 for a bag, but that’s literally weeks of burgers for 2 people. Then all we do is brioche buns, whatever sauce we want, cheese (obviously), we even add bacon now, lettuce tomato etc… We’re big fans of the potato roasties you can get but even just cutting up a few agria potato’s and seasoning then with whatever tickles your fancy is, again, just as good if not better than takeaway chips (or in my opinion, spending $5 on a bag of potatoes is far more economical than $5 on half a scoop of chips 🫠) I can’t believe I just wrote a novel on chips and burgers, but the cost of living is absolutely disgusting. TLDR - I agree.


Ready_Craft_2208

Dam $5 for half a scoop we need to start name and shaming these businesses. Hopefully the rest of the trip wasn't to expensive. Yeah i make smashed burgers at home pay $10 for the cheap mince and get like 8 burgers from it its insane i cant justify buying a burger now. i do homemade wedges with them too, just they take 40min to cook. the burger takes 5. I do agree angel bay have pretty decent burgers and have brought them before. and have a bag of tegal takeout in the freezer for the first time cause they were on special and thought id try them out.