Like many other industries, restaurants are still grappling with the longtail impacts that have rippled through the economy since the pandemic. Amid the dual challenges of rising costs and shrinking revenues, four in 10 restaurateurs report being in a more difficult financial position than a year ago, according to combined data from Mastercard, Uber Eats and the Restaurant and Catering Association (R&CA).
However, there may be relief on the horizon. Perhaps anticipating an interest rate cut and expected falls in energy prices, almost one in two restaurants believe they will be in a less difficult financial position in the next 12 months.
The data shows that online food delivery (OFD) is playing a key part in diversifying revenue streams. Almost all restaurants surveyed said that using delivery platforms had increased their revenue over the past year, with almost one in four saying that online food delivery has helped keep their business afloat during these challenging times.
Mastercard’s SpendingPulse data shows that the majority of the uplift has come from e-commerce transactions, with online transactions up 12.5% compared to on-premise spending which increased 3.3%.
Growth in online purchasing is a trendline mirrored in the data from Uber Eats over the last 12 months with double digit growth in the amount of restaurants on the Uber Eats platform, and single digit growth in the increase of ordering occasions across breakfast and lunch time.
This year, sustainability has also become a focus for restaurants looking to future-proof their business, with almost one in five introducing more sustainable and eco-friendly dining offerings and almost a third saying they would value help to switch to more sustainable packaging.
Mastercard chief economist for Asia Pacific, David Mann said, “The latest data continues to demonstrate a shift in consumer preferences in an ever-changing world, driven by cost-of-living challenges and post-pandemic shifts.
“Although consumers appear to be cutting back on some discretionary spending, we continue to see them prioritising funds for things they are passionate about. Australia’s passion for food has allowed the restaurant industry to continue to grow, but with a shift towards online delivery as Aussies embrace the thriving food culture in a different way.”
Uber Eats Australia and New Zealand general manager, Ed Kitchen commented, “The longtail impact of Covid 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.
“While the main pain-points differ between states and territories, there is one shared thread – cautious optimism. This is likely fuelled by the solutions restaurant owners are unearthing to provide additional revenue to offset their increasing operating costs. Pleasingly, one consistently identified growth lever was online food delivery providing incremental revenue with near zero capital investment.”
R&CA CEO Suresh Manickam added, “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. Interest rates remain stubbornly high impacting almost all cost inputs. The sector is now experiencing complex and severe industrial relations pressures that were never present.
“Adjacent to this, the sector has not returned to pre-covid apprenticeship rates and electricity prices have exploded. In combination, these factors are impacting the ability for the sector to operate. In contrast there are some beneficial outcomes that have arisen over the past year. Firstly, there has been an uptake in online food delivery. Secondly, the catering sector has experienced an uptick in terms of activity, which pleasingly suggests a return to various types of catering.
“Given the challenges that the sector faces, R&CA has been consistent in our request from government. Firstly, an investment by the government in skills. Secondly, an ongoing and sustainable subsidy to energy prices. Both of these initiatives will continue to assist a sector faced by challenging circumstances.”