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Is Canberra's cafe culture obsession sustainable?

Food blogger taking a photo of food
Canberrans have mastered the art of eating out.

ABC News: Alkira Reinfrank

If you love dining out, Canberra is the place to be.

For foodies, it seems that every weekend brings with it the opening of a new hipster pop-up restaurant or brunch bar to test out.

Salivating thought, right?

But just as fast as new restaurants open, others seem to close up shop.

So is Canberra's rotating door of culinary fare sustainable?

It's a competitive world out there

The pair smile while Sasa Sestic pours coffee.
Australian barista champion Hugh Kelly (right) with world champion Sasa Sestic (left).

ABC News: Greg Nelson

The last three years have seen an onslaught of new trendy cafes and restaurants revitalising the streets of Canberra.

As a result the city is finally receiving national and international recognition for its food, coffee (thank you Sasa Sestic) and wine scene.

But it also means an immense amount of pressure has been placed on existing restaurants to keep up with the flashy new dining options (to share plate, or not to share plate?).

Peter Barclay has run Civic-favourite King O'Malley's for 17 years and has seen the highs and lows of the industry.

He said 2016 was a hard year for hospitality, with a number of notable venues closing down in the face of elevated competition.

"There were a large number of business opening very quickly and also an equal number closing," Mr Barclay said.

"There have been a lot of challenges to the industry, one was that we had an election ... and uncertainty through that period, and also a lot of venues have opened up."

Too many cafes, not enough people in 2016

King O'Malley's owner Peter Barclay pours a beer.
Peter Barclay said the market was starting to balance out.

ABC News: Alkira Reinfrank

Mr Barclay said Canberra's population growth in 2016 did not match rapid business growth, leaving the hospitality industry diluted.

In other words, there were just too many restaurants trying to feed Canberrans at once.

This is reflected in Dun and Bradstreet's Failed Businesses Report, showing in 2016 the ACT recorded its highest number of business failures in three years.

In a three-month period, between July and September, more than 200 business closed up shop.

Face it, Canberrans are fickle

Freakshakes from Canberra cafe Patissez.
Freakshakes from Canberra cafe Patissez.

Instagram: Patissez

Like a seagull to a chip, Canberrans love to flock to trendy new haunts opening around town, sometimes leaving long-standing restaurants feeling a little left in the lurch.

"Canberra consumers are very fickle," Australian National University marketing academic Andrew Hughes said.

"Even at the bottom end of the pyramid, as we say, the people who aren't spending the huge amounts of money every night out, they are still discerning."

This means restaurants have to stay on top of their game in terms of food, service and, especially in a small town like Canberra, the "unique experience" they are providing.

Mr Hughes said there was less business failure in high-end restaurants in Canberra because they were able to create a special experience for dinners.

The stiff competition and "business churn" was found within the middle to lower ends of the market, where restaurants rely more on differentiating themselves based on their food and not the experience.

'There's enough retail space for a population of 1 million'

For Lease sign on the Kingston Foreshore.
Canberra's available retail space far outstrips the city's population.

ABC News: Ian Cutmore

Opening up a new business may also seem enticing to novice entrepreneurs because, according Peter Strong from the Small Business Council, there are too many vacant lots being built around town.

"The Government is releasing more and more space for retail and for hospitality," he said.

"Our population has not grown that much that we need that much more space.

Mr Strong said it meant that people with good intentions might consider buying into a space because the opportunity was available, but in the end they could be being set up to fail.

But is restaurant churn really a bad thing?

A woman reaches across table laden with food.
Canberrans can look forward to having more restaurants and cafes to tantalise their tastebuds.

Stocksnap: Ali Inay

When it all boils down, high rates of restaurant or cafe churn is not ideal if you are a business owner.

As seen last year, it means competition runs rife in the small market and can even result in businesses having to fold.

But if you are a foodie, the high level of competition is a good thing.

It means you get to keep trying new food from new venues, and chances are the heightened competition means the quality of food and service provided is driven up.

It's looking sunny side-up for 2017

The good news for entrepreneurs, according to Mr Barclay, is that the strengthening ACT economy and certainty in Government is helping to balance out the market.

"There are a lot of positive things happening that should re-address the supply and demand and hopefully be more demand than supply."

Meaning Canberrans can go on happily eating while ensuring the industry maintains an appetite for success.

The Mandalay Bus, a double-decker, sits in a car park.
The Mandalay Bus avoids the hassle of a bricks-and-mortar restaurant.

ABC News: Giulio Saggin