I was driven from Ikoyi to Victoria Island (both districts of Lagos) the other day, a journey of about 15 minutes, and I counted no fewer than five new restaurants and bars that had opened up, plus two more due to open at any time. One company has opened three restaurants on VI within the space of just two months! Now that’s confidence in this market.
What’s driving this massive investment in eateries? For me, two main factors. First, it’s the hassle and expense of eating at home. Young people living alone (those without domestic help) don’t want to cook, and in many instances don’t know how to. Then there’s the 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, equipment and so on, and then there’s the washing up! There are some compelling reasons for going out.
Secondly, 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% are “rich class”. Whilst the definition of “middle class” has a rather low threshold, at around $4,000 per year in Purchasing Power Parity terms (“rich” is above $20 per day), the concept holds true, that this segment of the population has been growing rapidly, at a rate of 3.1% per year between 1980 and 2010, compared to 2.6% for the entire population of the continent.
Extrapolating these figures to the 15 million+ inhabitants of Lagos – 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 five 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, and 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. For myself, 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 of my most recent restaurant experiences in Lagos. The first was a franchise outlet of a South African fish restaurant chain. The waiter said it wasn’t his fault he brought us the wrong drinks, as he hadn’t taken the order. Instead of changing the wrong drink, he moaned at the staff and then at me, telling me that I shouldn’t get cross with him as he was only helping out and was going back home to South Africa soon. So, we took our business elsewhere (see example three below).
The second was a Chinese-owned and operated hotel in Lagos, which has a few 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??
And my third? A sports bar on Victoria Island, 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.
Sounds simple, doesn’t it?
Trevor Ward – MD: W Hospitality Group