Adelaides, AUS: Do food trucks in Adelaide’s CBD really hurt local businesses?

Sokha Khun with her food truck Phat Buddha, which she runs with Joel Schulz, in Victoria Square.

By Anthony Templeton | The Courier Mail

Sokha Khun with her food truck Phat Buddha, which she runs with Joel Schulz, in Victoria Square.
Sokha Khun with her food truck Phat Buddha, which she runs with Joel Schulz, in Victoria Square.

An Adelaide City Council economic analysis of revenue figures from six food trucks, and a survey of 105 restaurants and cafes, reveals that the perception food trucks are “impacting on local business conditions” is not true.

The council is reviewing its policy on mobile food vendors and changes are under consideration include increasing fees for operators and imposing tougher restrictions on the areas they can sell from.

But its analysis found that the average food truck made just $424 each time it set up.

“(Mobile food vendors) are not making significant profits, with many struggling to simply cover their costs each time they venture out,” the report states.

It says the revenue of food trucks is estimated to be about $600,000 a year, or 0.15 per cent of the total city market.

The issue will be debated at Tuesday night’s Economic and Community Development Committee.

Food truck permits, which are renewable every six months, cost between $100 to $1000, depending on the season and length of validity, and current restrictions mean food trucks cannot set up within 25m of another business selling a similar product.

Food trucks and pop-up bars have been heavily criticised by existing bricks-and-mortar businesses amid claims the low cost of setting up a mobile operation provides an unfair advantage.

Sokha Khun and Joel Schulz with their food truck, Phat Buddha.
Sokha Khun and Joel Schulz with their food truck, Phat Buddha.

The debate over their future comes as previously popular pubs and restaurants, such as the Stag and Colonel Light hotels, have closed in recent months, and there are concerns in the industry that several more may be on the brink.

Millionaire property tycoon George Polites, who is a landlord to many hospitality businesses, said the council should ban the mobile food trucks before more damage was done.

“Every time I walk around the city I see more vacant signs in places that used to be a lunch bar, a cafe, a snack bar or a convenience store,” he said.

“There are only crumbs going around as it is.

“If they (food trucks) are allowed to continue it will add to the greater demise of the bricks-and-mortar retail spaces.”

Mr Polites, who is chief executive of the Polites Group and a major city landholder, called into question the accuracy of the economic report.

“It would be interesting to see how they were collected and whether there was any electronic way of tracking (food truck revenue),” he said.

But Phat Buddha Rolls proprietor Sokha Khun said her mobile business was run for passion, rather than profit.

“You don’t do this to make a huge amount of money because it’s more about satisfying a love for food,” she said.

“It takes a really long time of being out there before you build up a loyal client base.

“I think lots of people have got the wrong impression of what we actually do (in terms of trade).”

Phat Buddha Rolls operates a fixed premises in Torrensville to prepare its products and the business is looking to expand into a city store next month.

Ms Khun said the council did not need to increase the fees imposed on food trucks, but should better manage the numbers allowed to trade.

“There are probably just too many in the city at once,” she said.

“At the moment we might only go out once or twice a week because there just aren’t the customers to make in worth while (to trade more often).

“We were one of the first to do it in 2011, and there were no problems back then, so if the number (of food trucks) was reduced most of the (issues) would get sorted out naturally.”

The council has provided 40 permits for food trucks to operate in the city.

Restaurant and Catering Australia deputy chief executive Sally Neville said businesses operating near a food truck suffered a significant downturn in trade.

“The issue is when a food truck is nearby and particularly for those established businesses near the city squares that can be a real problem,” she said.

Deputy Lord Mayor Houssam Abaid said the council needed to amend its policies to ensure food trucks and bricks-and-mortar businesses were competing on fair terms.

“There needs to be some changes because at the moment I don’t think there is an equal playing between these mobile food vendors and bricks-and-mortar restaurants and cafes,” he said.

“A few changes to where (food vans) can operate and how the license structure is organised will probably make a big difference.

“Perhaps we need to look at where they can set up in relation to similar businesses and also work up the fee structure so it encourages people to have a go at starting a business but then transition to a bricks-and-mortar premises.”

Any proposed changes in the food truck policy will be put out for community consultation in June, before returning to the council for final approval in July.