Owner of shuttering Gahan House in St. John's says they couldn't turn restaurant around

A restaurant overlooking the St. John's harbour has announced it is closing at the end of the month for financial reasons, something the owner says is a first in the diversified company's 44-year history.

On Aug. 13 Gahan House announced on social media it was closing its Harbourside Drive location.

The restaurant is owned by Prince Edward Island-based Murphy Hospitality Group. According to its website, the company was established in 1980 and now owns 15 food and beverage outlets, two hotels and the Prince Edward Brewing Company.

CEO Ben Murphy said there were a number of factors that led him to close the restaurant, particularly how inflation has been driving up the cost of food.

"This was the first restaurant that we've shut down for this reason since I've been back in the family business," he told CBC News on Friday.

He said he made the decision last week and the St. John's staff were notified earlier this week. He said it was now apparent the company wasn't going to see a return on its investment in opening a restaurant in St. John's.

"We just had to make that decision. As you know, [there are] tough economic challenges for restaurants around the country. And this was one that we decided to pull the plug on," said Murphy.

Murphy said within the last year they made efforts to try to become an established restaurant in the city, though he isn't able to say exactly why Gahan House never became popular and financially profitable. In the business world, he said sometimes ventures fail.

"You can't bat 1,000," said Murphy.

He added it's possible another factor that contributed to the restaurant's lacklustre financial performance is that the market could be too saturated with microbreweries, adding the restaurant business is difficult across the country.

"Increased competition leads to winners and losers for sure," he said.

He said the first Gahan House opened in 2001. In the last two decades, it's only gotten tougher to run the day-to-day restaurant operations as well as getting capital to open or renovate a space, he said.

The departure from St. John's will impact other companies they did business with, like those they bought seafood from as well as alcohol and will leave a hole in the dining scene, he added.

"Hopefully another restaurant comes in and fills [it]."

The restaurant still has locations in Prince Edward Island, Nova Scotia and New Brunswick.

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