Receivership at the Door? Why NZ Hospitality Is #3 for Collapse — and What You Can Do About It

You’ve probably felt it already: rising costs, vanishing margins, a staff roster that looks more like a weekly wishlist than a schedule. It’s not just you. According to recent reports, hospitality is now the third most at-risk sector for business receivership in New Zealand. Cafes, restaurants, bars, and caterers are going under — and not just the badly run ones.

The real question isn’t "Why are hospo businesses failing?" It’s "What can you do to avoid becoming one of them?"

The Pressure Cooker: Why Hospitality Is in the Red

Recent data backs up what many of us have long suspected: New Zealand hospitality businesses are under more financial strain now than ever before. In 2024, a record-breaking 186 companies entered receivership, the highest figure in over a decade — up 84 from the previous year. Food and beverage businesses, including cafes, restaurants, and catering operators, saw a sharp jump from 170 insolvencies in 2020 to 235 in 2024. This isn’t an isolated blip — it’s a full-blown trend.

Running a food business in 2025 is a masterclass in juggling flaming swords. The industry is under relentless pressure from all sides, and the heat isn’t letting up:

• Supplier prices keep climbing. Food inflation has risen 3.7 % year-on-year to April 2025, accelerating to 4.4 % in May — the fastest food price growth in over a year. Ingredients, packaging, delivery fees — all going up. Grocery prices alone are up 4.6 %, putting direct pressure on margins. But if you raise your menu prices too far, too fast, customers vanish. You’re caught between needing margin and needing foot traffic.

• Wage pressures are stretching margins. Average weekly earnings grew by 2.9 % in the March 2025 quarter, while overall wage growth hovers around 2.5 %. Minimum wage hikes and high demand for skilled staff are pushing payroll costs up across the board.

• Rent hikes add to overheads. With CPI rents climbing around 3.0 % annually, fixed costs like rent and utilities are steadily eating into revenue.

• Labour shortages are choking kitchens and front-of-house teams. Good chefs are hard to find. Reliable FOH staff even harder. When you do find them, they’re expensive — and often overworked. Burnout creeps in, and with it comes inconsistency, absenteeism, and high turnover.

• Council compliance, audits, and food safety plans demand more admin than ever. Whether it's logging fridge temps, tracing allergens, or updating your Food Control Plan, you're suddenly a part-time compliance officer. And if you slip up? Fines, warnings, or worse.

• Customers are more demanding and less forgiving. They want vegan, gluten-free, keto, halal — and they want it fast, fresh, flawless, and on a budget. Make one wrong move and it's not just a bad night — it's a scathing Google review.

• Lease pressures and rising interest rates are squeezing operating costs from the top down. CPI data shows rent inflation surged 4.2% in 2024, and in prime retail areas, landlords are asking for 14% higher commercial lease rates year-on-year. Meanwhile, tenants are being pushed into longer lease terms — often 5–10 years — just to secure a spot. One Christchurch butcher I know went from a $1,000 power bill to $4,000 in just 30 days — a jaw-dropping 300% increase. Add in power, insurance, and the endless stream of little extras (pest control, waste removal, linen services), and suddenly your profit margin looks like a rounding error.

• Cost-of-living pressures mean people are dining out less. Lunches become coffee runs. Dinners become takeaways. And bookings become "maybe next month."

This isn’t bad luck. It’s the new reality. And it’s why more hospitality businesses are falling over, even when they’re busy.

The Hidden Leaks That Drain You Dry

Most hospitality businesses don’t crash because of one big disaster — they slowly bleed out from a hundred tiny paper cuts:

• Staff not trained right? That means wasted ingredients, sloppy mistakes, and unhappy customers.

• No proper Food Control Plan? Cue the last-minute panic when the auditor knocks.

• Prep taking twice as long as it should? Hello, exploding labour costs.

• No handle on food costs? You’re literally flushing money down the drain.

• A kitchen layout that’s all over the place? You’re losing time every single service.

• No clear system or process? Everyone’s guessing, every shift, and no one knows what’s going on.

At first, it doesn’t look like failure. It just feels like you’re exhausted, frustrated, and always a step behind. Then one day, you wake up and realise you’re not just behind — you’re out of the race.

So, What Can You Actually Do About It?

Here’s the truth: you can’t fix everything at once. But you can grab hold of what’s in your control — and you’ve got to do it before those cracks turn into full-blown craters.

1. Sort Your Systems

Food Control Plans, Safe & Suitable templates, daily logs, allergen tracking, supplier checks — if this stuff isn’t running like clockwork, it’s quietly bleeding you dry.

2. Streamline Your Kitchen Workflow

Get smart about your space. Fix your flow. Tighten up your prep and mise en place. Service should glide, not feel like a cage fight every night.

3. Train Your Team Like They Actually Matter

Stop throwing newbies in the deep end. Give them proper routines, solid inductions, and real food safety know-how. Your team’s skill level is your business’s backbone.

4. Watch Your Numbers Every Damn Day

Labour costs, waste, food margins — if you can’t answer these questions on the spot, you’re flying blind. Put systems in place or call in someone who can make sense of the chaos.

5. Get Help Before You’re Desperate

Don’t wait till you’re on your second compliance warning or you’ve burned through half a dozen head chefs. A few weeks of proper guidance now can save you from months of pain later.

This Is What We Do

At Propergander Cuisine, we help NZ hospo operators get control of their kitchens, their teams, and their compliance — before it’s too late. We’re not accountants or armchair consultants. We’re operators who’ve lived it, fixed it, and built better.

If your venue is stuck in survival mode, now’s the time. Let’s fix it properly.

Because receivership isn’t a surprise.
It’s a slow bleed.
Let’s stop it early.