Khannaa restaurant closes in Sydney

Surry Hills fine diner Khanaa has closed after just six months, joining a growing list of Sydney hospitality venues announcing final service. Owner chef Opel Khan says he won’t abandon the site but will pivot the venue to weather tough trading conditions and high interest rates, which are biting into consumer spending.

Early next month, he’ll open Bistronomie, a French eatery the veteran restaurateur insists is a venue for its time. “Mains will all be under $30,” Khan says.

Things were very different at Khanaa, which opened last September on Crown Street’s prized restaurant strip. The high-wire Bangladeshi restaurant had a $145 degustation menu.

With many customers now looking for value or to eat out regularly but with a lower spend, Khan plans to double down with his hospo plans. In May, he’ll open a second Bistronomie in his other space, the former chef’s hatted Metisse restaurantin Potts Point, which he closed late last year.

Nigel Ward, the owner of Passeggiatarestaurant in Waverley, has developed a sixth sense for reading the Sydney restaurant market in a 20-year career that includes head chef at CBD’s Uccelloand founder of Sagrarestaurant in East Sydney. Late last year, Ward noticed a growing number of restaurants closing on random midweek nights on his drive to and from work, so when bookings at Passeggiata started to trail off early in the week, he responded.

“We only had six people in the restaurant on the second last Tuesday of November, [so] we introduced $30 pasta and a glass of wine on Tuesdays and had 64 customers on the second Tuesday of December,” Ward says.

“I don’t like the word pivot, it reminds me of COVID. I prefer ‘adjusted’,” Ward says of the initiatives he’s introduced to drive business.

Passeggiata has a BYO night on Wednesdays (popular with locals with wine collections), an impressive kids’ menu, and Ward is about to add Italian regional dinners to the line-up. “It’s important to note that not everything has succeeded,” he says. “The bottomless brunches didn’t really work.”

While average diner spend is generally down on deal nights, customers often order extras off the a la carte menu or wine list, and more people are introduced to the restaurant. “It’s like a perfume tester,” he says. “Our function enquiries have tripled.”

The big winner in all this is the consumer. Hey Chu, the South-East Asian restaurant on Castlereagh Street in the Sydney CBD, has introduced a cash-only menu its owner, Cuong Nguyen, says is aimed at the “cossie-livs” (slang for cost of living).

Hey Chu’s $10 and under menu runs from 5–6pm and includes $1 fried octopus balls, a $10 dry-aged beef burger, $3 crispy pork cannoli and a $10 cocktail (elderflower, strawberry, vodka and lemon). “We’re looking for fun and edgy ways to get people through the door and keep cash flow alive,” Nguyen says.

Attila Yilmaz, owner of Pazar Food Collective in Canterbury, echoes many local operators in describing current trading conditions as among the toughest he has experienced. Keen to capture a broader market, Yilmaz decided to open Pazar earlier, at 5pm. Customers who grab an early table, exit by 7pm and pay with cash receive a 20 per cent discount. “It’s a huge discount, but I want to make people aware we now open at 5pm,” Yilzman says.

Back in the Sydney CBD, The Charles Brasserienow offers a $65 two-course lunch, while the bar is serving up a wagyu burger, fries and a drink for $25. There’s also a $25 pasta menu. Head underground on Wednesday nights to Tivafor bottomless baos and $12 Tommy’s margaritas.

Sandwiches are also being used to attract diners. Luxe CBD Bar Morris has opened a tiny Pitt Street hole-in-the-wall called Cafe Morris, where punters can order sangers made in collaboration with Fabbrica pasta bar, located at the other end of the city. Prices start at $10.

Co-owner of Paddington Sicilian trattoria Zafferano Isobel Galloway has extended operating hours and introduced focaccias during the day for extra revenue. They worked with the nearby Organic Bread Bar on South Dowling Street to create their custom focaccia and pile on ingredients such as house-made porchetta, burrata, heirloom tomato and shaved pecorino (sandwiches start at $15.50.)

“In the midst of soaring living costs and economic uncertainty, the once vibrant pulse of Sydney’s restaurant scene has dulled meaning fewer patrons able to indulge in dining out,” Galloway says. “We were once fully staffed but I’ve had to jump back into full-time hours.

“In all honesty, it’s been a really challenging time.”