How many steaks does a small restaurant need to sell to cover its rent? Ask Bobby Ma, who on Wednesday decided to close his popular four-year steakhouse at On Lok Lane, a back street off the crowded Hennessy Road in Hong Kong.
Regular customers mourned the shop’s demise on social media. Many locals who either worked or lived in Wan Chai recalled how they were attracted to the store by its special HK$88 (US$11.2) all-you-can-eat steak lunch set.
“I remembered we had a customer eating 10 steaks,” said Ma, the owner of Bobby & Friends Backstreet Steak. “I can eat only two and a half.”
Four years ago, Ma decided to quit his regular job and raised more than HK$300,000 to set up his own restaurant in an odd and inconvenient location. Ma decided to go with his all-you-can-eat offer instead of spending his money on advertising.
After a few months, the restaurant became popular with people lining up for a seat. In his hey-day, Ma served 240 customers during four fully-booked sessions per day.
He recalled that his business was going so well that a nearby newspaper stand owner once called the police and asked for crowd control. Then his dish-washer quit due to the heavy workload and as a result, Ma had to work extra time and slept at the restaurant for a few days every week.
All was going well until a new landlord proposed raising the monthly rent 40% to HK$98,000, up from HK$70,000. Ma said: “Our steak costs over HK$100. How many steaks do we need to sell to cover the rent?”
After six months, Ma was asked to sign a personal guarantee document and prepare 24 cheques over the rental period – and that was when he decided to pull the plug. “I didn’t believe there was a real estate hegemony in Hong Kong,” said Ma, a former property agent.” But now, I find it real.”
Ma is a typical example of how Hong Kong restaurant owners struggle to survive in the wake of the sky-high property prices, with many of them virtually working for the landlord, or simply bowing out after losing money.
Earlier this year, the Lin Heung Tea House, one of the oldest and most popular Chinese restaurants dating back to 1889, almost closed down its store in Central, but a deal with the new landlord was struck at the last minute.
Backstreet Steak fans had kind words on the Facebook page after hearing about the closure. Some even offered to find a nearby place where they could re-start the business. But the question remains – how much should the owner charge for a steak to pay the rent?