I drove (my goodness, two words in and I’ve lied already!  I don’t drive anymore around Lagos, the colour of my skin is irresistible to our brave boys in blue/black/khaki, even pink sometimes, and it just got too expensive) from Ikoyi to Victoria Island (both districts of Lagos) the other day, a journey of about 15 minutes, and I counted no fewer than 5 new restaurants and bars that had opened up over the Christmas and New Year period, plus two more due to open at any time.  Wow!  One company, Ebele Enunwa’s Kilimanjaro has opened three restaurants on VI within the space of just two months!  That’s confidence in this market for you, big time.

What’s driving this massive investment in eateries?  I reckon there are two main factors.  First, it’s the hassle and expense of eating at home.  Young people living alone (I mean without domestic help) don’t want to cook, and in many instances don’t know how to.  Power outages, which necessitate running a generator with increasingly expensive diesel, and the problems of keeping your fridge and freezer cool, having all the necessary ingredients in the cupboard, equipment and so on, and then there’s the washing up!  There are some compelling reasons for going out.

Second, and not unconnected with the first, there’s the growth of the middle class.  According to the African Development Bank, over one third of the continent’s population are middle class, and 5 per cent are “rich class”.  Whilst the definition of “middle class” has a rather low threshold, at around US$4,000 per year in Purchasing Power Parity terms (“rich” is above US$20 per day), the concept holds true, that this segment of the population has been growing rapidly, at a rate of 3.1 per cent per year between 1980 and 2010, compared to 2.6 per cent for the entire population of the continent.

Extrapolating these figures to Lagos’ 15 million+ inhabitants – and it is likely that the proportion of residents of this megacity in the “middle and rich classes” is higher than the continent’s average – means that there is a middle class population out there of around 5 million, and a “rich” class of at least 750,000, with money to spend.  That’s quite a market.

Restaurants and bars can be quite profitable, mostly because the staff don’t get paid much as a basic wage, they get most of their remuneration from the 10% service charge that is added to bills, and cash tips.  The biggest cost for an owner is energy, due to the “epileptic” nature of the mains supply.

The trouble is, there is a lack of good management and staff, and this translates into bad, bad service.  Me, I would rather go somewhere which has good, acceptable food and great, friendly service, than somewhere with great food and lousy service.

Here are three recent examples of restaurants in Lagos.  The first is a franchise outlet of a South African fish restaurant chain.  The waiter says it wasn’t his fault he had brought us the wrong drinks, as he hadn’t taken the order.    Instead of changing the wrong drink, he bitched and moaned, at the staff and then at me, I shouldn’t get cross with him, he was only there to help out the stupid local staff, and was going back home to South Africa soon.  And we took our business elsewhere (see example 3 below).

The second is a Chinese-owned and operated hotel in Lagos, which has two or more oriental restaurants.  After 15 minutes, and repeated asking, and after I had finished my food, I was told that soy sauce was not available.  Soy sauce??!!

A restaurant or bar relies on repeat customers, who go back time and time again, who are loyal to the place.  You don’t generate loyalty when the service is bad, when you can’t supply the basics.

And my third?  A sports bar on Victoria Island, previously owned by the eponymous (?!) Pat, where they keep it simple, the food is good, won’t win many awards, but the staff are really friendly and attentive, and the manager, an industry professional, walks the floor, talking to his customers – his loyal, repeat customers.

Talk to some of the restaurateurs and bar owners, and they will tell you “no money-o!”.  Really?  Or is it actually “no know anything about the business-o”?!

 

Trevor Ward

W Hospitality Group, Lagos

trevor.ward@w-hospitalitygroup.com