Food, drinks to spike in price amid ongoing labour shortage

You could be paying way more for a meal at your local cafe because of an unfortunate by-product of the pandemic.

The cost of a meal at a restaurant is set to rise by as much as a fifth of its original price with a labour shortage continuing to decimate Australia’s hospitality sector.

Industry experts have warned that the struggle to retain workers amid interstate and international border closures has led to higher wages for restaurant and cafe staff – which in turn means restaurateurs are making less profit.

As a result, many will have to resort to hiking up prices.

Restaurant and Catering Industry Association chief executive Wes Lambert told news.com.au: “We expect menu prices will go up between 10 to 20 per cent as we enter 2022.”

For example, avocado on toast currently listed on a menu for $16 could move up to more than $19 by next year.

There are around 100,000 jobs in the sector that are currently vacant – about a quarter of the hospitality industry which, at capacity, stands at around 450,000 people.

“This comes to a head as the states head into the spring and summer season which is traditionally the busiest season,” Mr Lambert added.

But with not enough staff to work, catering businesses will be forced to shutter their doors early.

Samantha Sleiman, who owns the Butcher’s Block group which has three restaurants in Sydney, was seriously considering whether it was time to ask for more money from her customers.

She has been bleeding workers ever since restrictions in NSW lifted last month, with her waiters and chefs enticed into new roles for twice as much.

This restaurant in Sydney needs 100 more workers to be functioning at full capacity.

“It [hospitality hiring] is super competitive,” Ms Sleiman told news.com.au.

“The problem is you’ve got [other restaurants] poaching staff and offering exuberant wages to get staff to come across.

“If I match it (the new wage) I’ll go broke.”

The western Sydney business owner briefly toyed with the idea of increasing the cost of her menu items but ultimately decided against it.

For that, she has paid dearly.

She had 200 staff members before Sydney entered its 106-day lockdown. Since then, she has lost half of her workers.

She blames it on a combination of poaching and people quitting the hospitality sector altogether because of its “volatility” against the backdrop of the Covid-19 pandemic.

With only 100 staff members instead of the desired 200, she has had to keep one of her three stores permanently closed since restrictions ended.

Mr La, mbert says this trend isn’t unique to Ms Sleiman.

“Many operators are reporting they used to be open to open six or seven days for two to three meal periods,” he said, “and now [that’s] only one or two meal periods, for 4-5 days, on average

Ms Sleiman thought about increasing the prices on her menu.

Mr Lambert added that global supply issues as will as skills shortages have also caused a jump in the costs of everyday items.

“It’s driven up wage costs in the industry, likely permanently, because it’s hard to go backwards, which will ultimately lead to increased menu prices,” he warned.

“Due to supply disruptions caused by Covid, we expect imported goods may increase higher than locally produced goods.”

Even with international borders

Grocery costs are also predicted to rise in the coming months for similar reasons.

Ms Sleiman’s revenue is also down by 30 per cent despite this meant to be the peak season where she makes most of her yearly income.

“The other toss of the coin is that when big companies say they’re going to pay double, little guys can’t compete,” she added.

Have a similar story? Continue the conversation | [e-mail]

Originally published as Food, drinks to spike in price amid ongoing labour shortage