There should be a sense of excitement among Australia’s hospitality professionals as restaurants prepare for the busy summer and Christmas period ahead.

Instead, there is a keen sense of anxiety, with many businesses struggling to keep up with worsening economic conditions – a situation that not even the frantic summer might fix.

It comes as a new report laid bare the challenging period Australia’s restaurant and food sector has faced.

The Pulse Check Restaurant Report 2024, based on data provided by Mastercard and Uber Eats, found that slowing consumer spending and supply chain issues had created a tough environment for restaurant owners.

Umesh Datwani, from San Pacho Mexican Taquieria in Marrickville, said that launching a new business in 2024 has been both challenging and rewarding.

“In this current economic climate, people have less disposable income to spend, however we have noticed that if you provide quality food at a reasonable price point, then people are coming and wanting to try it,” he said.

“Our format at San Pancho is quicker, but provides authentic Mexican food within a reasonable price range.”

Impacts

The report found that 44 per cent of restaurant owners believe they are in a more difficult financial position and highlighted utility bills, rent increases, supply chain disruptions and staffing as major issues.

Datwani said although he has been “blessed” with reliable staff, supply chain issues have had an impact on his business.

“I’ve wanted to source Mexican beers and if you talked to me before Covid, the accessibility to Mexican beers was easy,” he said.

“If I call any supplier across the country, I can’t really get any beers like Tecate and we are finding that challenging.”

The majority of owners said they’d seen a rise in revenue over the previous 12 months, with online transactions up 12.5 per cent and in-restaurant spending 3.3 per cent.

Ed Kitchen, general manager of Uber Eats Australia and New Zealand, said that “the long-tail impact of the coronavirus continues to ripple through the economy”.

“Deferred impact has appeared in the form of higher rental costs, growing insurance premiums, increasing utility and wage bills, and more expensive raw ingredients,” he said.

“During the past year, Australia’s restaurant, cafes and catering sectors have experienced an unprecedented fusion of a number of factors that have created one of the most challenging economic landscapes in recent history.”

He said that interest rates remain stubbornly high and have also affected almost all costs.

“Electricity prices have exploded, which is having a fundamental impact for a sector that is a major consumer of energy,” Kitchen said.

“Be it heating, cooking, cooling, entertaining, in combination these factors are impacting the ability [of] the sector to operate.”

Optimism

Despite these challenging conditions, 43 per cent of restaurant owners believe they’ll find themselves in a better financial position next year.

The report found that restaurant owners had ‘future-proofed’ their businesses by investing in online delivery, sustainable dining options and technology.

Most businesses saw a rise in online orders in the past 12 months. Photo: Pulse Check

Datwani said he expects conditions to change within the next eight to 12 months.

“With the cash rate hopefully going down, things will change,” he said.

“Our value proposition is providing an authentic Mexican experience that you don’t get across the Sydney food market, within that affordable price range.”