Uber Eats, The Restaurant and Catering Association, and Mastercard SpendingPulse have released the 2023 Pulse Check Restaurant Report, shedding light on critical issues and opportunities within the Australian restaurant industry.
Over the past year, the restaurant sector in Australia has experienced growth, with an 18.4% increase, as reported by Mastercard SpendingPulse. Yet beneath this growth, a complex operational landscape has given rise to pressing challenges, including escalating costs, supply chain disruptions, and inflation.
When the first Restaurant Pulse Check report was published in July 2022, there was optimism across the sector. The consensus was that after Covid lockdowns, the prospects for restaurants was looking positive, as Australian diners sought to support local favourites once again.
This materialised with Mastercard’s analysis of millions of transactions from restaurants across the country depicting year on year growth of 18.4% from July 2022 to July 2023.
However, as the second iteration of the Restaurant Pulsecheck shows, the outlook of the restaurant community for the next 12 months is less optimistic, and the uncertainty is more pronounced for small businesses (with fewer than 20 staff).
The key issues surfaced in the latest Pulse Check report and facing the entire restaurant ecosystem are rising energy and labour costs, inflation and supply chain disruptions. On average seven in 10 restaurants are concerned about a drop in discretionary spending.
Nearly every restaurant owner surveyed revealed they had made a change to address rising costs, with the majority turning towards creative, innovative and thoughtful practices such as menu curation, extended hours, promotions, loyalty platforms, greener operating models and on demand e-commerce. With restaurateurs who use the Uber Eats app at least twice as likely to be innovative than their peers not deploying on demand food delivery (OFD).
While almost three-quarters (74%) of restaurants who partner with Uber Eats have a positive perception towards OFD services, there’s more technology – alongside partners like the Restaurant and Catering Association – can do to help restaurants reach more customers, drive more sales and use data to enhance customer offerings.
One trend is off-peak delivery windows for merchants – something 46% of restaurants are already promoting to capture a higher share of customer’s wallets. While nearly four in 10 are introducing new menu items and limited time promotions.
Another positive theme is unfolding beyond city centres. With restaurant owners in regional or rural areas estimating that close to half (49%) of their revenue, on average, comes from online food delivery (compared to 30.4% of those in metropolitan areas).
Uber Eats Australia and New Zealand general manager, Bec Nyst said, “The report shows restaurant owners are adopting an array of enterprising approaches to address challenges like the rising costs of goods and concerns about a possible dip in discretionary spending. It’s equally positive to see services like Uber Eats can play a role in helping restaurants with higher volume orders at more times throughout the day.
“As well as providing additional avenues to build revenue in cities we’re also seeing an uptake of OFD use outside the metropolitan areas. Our regional expansions earlier this year will help more merchants across Australia harness the demand for e-commerce convenience in the months ahead.”
Mastercard Asia Pacific chief economist, David Mann commented, “In a period of economic uncertainty, consumers are still prioritising experiences and spending on the things they are passionate about. However, the way this looks is changing. While restaurant spend has continued to be one of the most resilient categories, Mastercard’s SpendingPulse data shows that online food delivery is growing at a faster pace than in-store dining, demonstrating the hospitality industry’s continuing innovation and a shift in consumer preferences in a post-pandemic environment.”
Restaurant and Catering Association CEO, Suresh Manickam added, “Our sector has demonstrated a high level of resilience and innovation, despite the significant changes to the business operating environment. That said, the industry faces a number of challenges such as an overhaul of Australia’s industrial relations infrastructure, the ongoing skills shortage crisis and the economic aftereffects of inflation. The R&CA is here to advocate and assist members in navigating these challenges.”