‘They’ll buy dinner, but no drink’: Hospo doing it tough as cost of living crisis bites

Friday, 7 November 2025

A cost of living crisis, changing spending habits, and rapidly rising costs have hit the hospitality industry, with more than 2,500 restaurants, cafés and bars closing in the year to August - almost 20% more than the year before.

And those who have made it this far, say they are hanging on by a thread.

Wellington’s hospitality battle has been well-documented, with a number of high-profile closures over the past year.

In Auckland, a recent Heart of the City survey found 81% of business owners who responded, many in hospitality, believed the city centre was “not in a good state”.

Even Christchurch, which is buzzing with new arrivals, is not immune to challenges facing the industry , with restaurateurs saying they were having to do whatever they could to stay afloat.

GG Bistro was forced to shut its doors last week, just seven months after it opened in Christchurch’s central city.

Owner Flip Grater said having to close down before the venue’s full potential was realised was “brutal”, but it was the reality of the economic situation.

Grater, who owned restaurant and deli Grater Goods in Sydenham for seven years before relocating to the central city said her customer base was loyal but “everyone was feeling the pinch”.

“They very clearly wanted to support us, but even the people who came through the door just clearly had less to spend,” she said.

She said people would ponder the prices much more than they used to. They’d also alter their orders to lower the cost, she said, reducing the overall spend per person and creating an unsustainable situation.

“They’ll buy dinner but no drink or dessert. Or perhaps share a plate instead of having one each.”

Emma Mettrick, co-owner of Twenty Seven Steps on New Regent St, said customers were coming through the door, but they were often only buying a starter or dessert, rather than a main course. Or they’d just opt for a glass of wine, rather than paying to share a bottle.

“People have fought so hard for their dollar, because it’s so hard to make money right now.”

She and her fellow co-owner Paul Howells hadn’t taken drawings from the business for five years, the cash flow was so tight.

“It’s all staying in the business right now, just to make sure we can get through these times.”

And balancing rapidly rising costs with people’s more cautious spending habits had been tough, Mettrick said.

“Our motto last year was stay alive til 2025. Now, what is it?”

Stuff asked people around the streets of Christchurch if they still went out to eat as much as they used to, and if they did go out - were they spending less?

Ruperte Dobson scoffed in disbelief. “I don’t.”

She had in the past, when she was “younger, and had no cares or responsibilities.”

On the odd occasion she did venture out to a restaurant, Dobson said she would compare prices on online menus first and try to work out which option would give her the most value for money.

Mason Drew, 35, said the cost of living concerned him and he “definitely doesn’t have enough spare money” to be dining out.

“These days it’s a lot more dining in at home, doing shopping,” he said.

“Considering that all the prices have gone up, spending less is the natural thing.”

More than 2,500 hospitality businesses have met the same fate as GG Bistro in the year to August, according to Centrix data. That was 19% more than the previous year.

Restaurant Association chief executive Marisa Bidois said the rising costs of ingredients and other expenses meant the sector was battling.

“Food inflation is around 4.6%, nearly double the general inflation rate,” she said. “It’s been a tough few years.”

She said operators were telling her they were “working harder than ever” to withstand the storm.

“Household budgets remain under significant strain and that has a trickle on effect to our industry as well.

“Dining out and socialising are the first expenses people cut back on when tightening their budgets.”

Christchurch resident Frankie Warne, 27, said she wasn’t going out to eat as much as she used to either. “It’s too expensive.”

And if she did go out? Warne said she would opt for water, rather than fun drinks. She’d also cut the sides, and stick to one course only.

Grater said people who would book in at GG Bistro seemed to be only going out on special occasions, like birthdays.

She acknowledged Christchurch was busy at the moment, and there were plenty of people around, but that didn’t mean much if they weren’t spending.

“Anecdotally speaking to other hospitality owners, we’ve had the hardest 18 months that anyone’s ever seen.

“Everyone’s feeling the pinch. It’s just an incredibly difficult time.”