Why feeding the food industry is a part of the Western Sydney growth puzzle

Jun 6, 2025 – 9.43am

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This Industry Insight is produced in commercial partnership with KPMG.

Much of the conversation about the growth of Western Sydney is centred around the need for increased housing and improved infrastructure. But at the heart of why people are increasingly choosing to live, work and play in Western Sydney, is an industry on the periphery of that conversation: food service and entertainment.

Luke Grima, KPMG Greater Western Sydney, and Australian Foodservice Advocacy Body director.

Growing up in Western Sydney, my friends and I seldom looked to socialise locally. Most Thursdays and Fridays were spent organising where we’d be headed on the weekend, and a lot of discussions were centred around the logistics of getting in and out of the Sydney CBD from the west.

Today, most Western Sydney locals are more than happy to remain local for a night out and a good time. In recent years, various vibrant and bustling cultural food precincts have emerged – take Harris Park, Cabramatta and Canley Vale as good examples. In November, Sydney’s Good Food Guide noted a geographic shift in quality restaurants, with two Western Sydney venues receiving chef’s hats for 2025, and a restaurant in Blacktown taking out the Critics’ Pick Award.

Meanwhile, as the infrastructure and grading of commercial facilities has improved, so has the food, beverage and entertainment offerings, particularly in our Western Sydney city hubs of Parramatta, Liverpool and Penrith.

Discretionary spend at venues has dropped and margins are tightening throughout the industry as household budgets are squeezed. Despite this, we are seeing an increased trend for Australians to dine out, rather than dining at home.

According to the Australian Foodservice Advocacy Body, the average Australian household spent around 37 per cent of their total food and beverage budget on eating out prior to the pandemic (known as the food service dollar). That proportion dropped naturally during the lockdowns to around 13 per cent at its lowest but rebounded strongly, achieving pre-pandemic levels as quickly as 2023. In May, Australia’s food service dollar surpassed these levels to a record high of 39 per cent. It is expected to increase further as cost-of-living pressures ease.

Greater Western Sydney is well placed to lead the national resurgence of the food service and hospitality industries, being home to cultures from all corners of the globe and offering a wide and diverse range of dining choices.

Significant infrastructure projects in Sydney’s west will continue to boost demand for food service businesses across the supply chain. The new international airport opening in 2026, and the surrounding Bradfield City hub will more than likely create jobs in heavy industries where staff will be required on-site, with less ability to work at home, thereby creating further opportunities for food service growth.

Meanwhile, the new Sydney Metro West will create precincts where the provision of hospitality and food service will become important in shaping those hubs. Projects like Parramatta’s Powerhouse Museum and the new football stadium in Penrith will also attract hungry tourists and sports-goers to spend money in Western Sydney.

KPMG’s latest Enterprising Cities report predicts 173,000 new jobs will be created in Western Sydney over the next five years. Many new jobs created in the region in 2024 were within white-collar and population-oriented industries, such as healthcare and education. This population growth in the region will naturally have flow-on effects to the food and hospitality sectors.

Planned growth and migration into Greater Western Sydney; the broader food service spend increase; vibrant multicultural cuisine offerings, infrastructure projects and job creation in the region; changing demographics, social trends and socio-economic standings – the list can go on.

What does this mean? The business case will stack up for food service and hospitality participants to double down on success in the Greater Western Sydney region. While it might be tough right now, the commercial rationale will soon surface, a sentiment shared with a range of clients we work with in this sector.

And let’s not forget this: hospitality and entertainment venues have the unique ability to shape and create an identity and a vibe within new and old precincts and locales. It isn’t the buildings or the roads or amenities that necessarily create this identity, or that facilitate the connection between loved ones. It is the ambience, the atmosphere and the hospitality of these venues that will generate the desire for patrons to attend, connect and spend.

This is sometimes forgotten or understated when it comes to the growth conversation of Western Sydney. Nobody wants to live in a place where there’s nothing fun to do and nowhere exciting to be, so hospitality is a vital piece of the puzzle when it comes to the region’s growth.

Rather than growth for the sake of growth, now is the time to support the development of a place where people can really thrive through this industry. The opportunity is now for food service and entertainment to flourish in Greater Western Sydney.

Luke Grima is a director at KPMG Australia, and a board member of the Australian Food Service Advocacy Body.