Reserve Bank rate rise will hit restaurants as Aussies tighten their belts

As Aussies look to save money in the wake of the RBA’s rate decision, this is what we will look to cut back on first.

Eating out in restaurants and ordering takeaway will be the first sacrifices Aussies make as they tighten their belts to counter the spiralling cost of living, new research reveals.

For its latest Global Consumer Barometer Study, market insights firm Toluna asked 1000 Australians what they would forego in order to save money, with almost one in three (32 per cent) saying they would stop visiting restaurants.

Twenty-eight per cent of respondents said they would drop their consumption of takeaway food, while 22 per cent said they would forego overseas travel, and 21 per cent said they would reduce spending on premium brand products.

Visits to bars and pubs (18 per cent of respondents) and the cinema (17 per cent) would also be minimised as the cost squeeze bites, the survey revealed.

The survey was conducted prior to the Reserve Bank increasing the cash rate on Tuesday, but at a time Australians were paying increasing prices for petrol, groceries and insurance.

The results come as the hospitality sector attempts to regain its footing after two horror years marked by lockdowns, staff shortages, supply chain problems and their own increasing costs.

Data from the Australian Bureau of Statistics last week showed more than 75 per cent of businesses in the Accommodation and Food Services sector were facing increasing costs – more than in any other part of the economy.

Celebrity chef Colin Fassnidge. Picture: Toby Zerna

Celebrity chef Colin Fassnidge said most eatery businesses were “on the ropes”.

“They’ve had two years of getting knocked down and now we’re just trying to come back and the interest rates have gone up, the price of food has gone up, and we’ve got no staff … it’s a bit of a no-win situation for the restaurants. We’re in the wrong industry to make money,” he said.

The host of the forthcoming Australian version of Kitchen Nightmares said he decided to pursue a gastropub model for his new venture, The Castlereagh in Sydney’s CBD, because of the worsening economic outlook.

“Fine dining is just too much hard work – people will not spend,” he said. “We’ve gone down an avenue where we know people will come back twice a week.”

The Irish born chef urged Aussies to support their local restaurants as times get tougher.

“Support local, wherever you live. It’s those little guys who are struggling; it’s the small guy on the corner with the family restaurant who needs to pay the bills,” he said.

Restaurant & Catering Industry Association CEO Wes Lambert.

The Farm chef Darren Robertson. Picture: Supplied

Similar comments came from the CEO of Restaurant & Catering Australia, Wes Lambert, who said the sector needed support from Australians “more than ever”.

“Given the devastating last two years that the hospitality industry in Australia has faced, the last thing our 55,000 restaurants, cafes and caterers plus their 350,000 employees need is to lose business critical to their recovery off the back of multiple interest rate increases,” he said.

Mr Lambert said his organisation would “continue to work with government to find ways to stimulate business so we can keep offering Australia and the world the best hospitality experience.”

Celebrity chef Darren Robertson said restaurants would have to re-examine their business models and focus on their strengths, rather than try to be “everything for everyone”.

“But post-Covid, we’ve also got a greater understanding of the importance of restaurants and cafes than ever before,” he said.

“Going out has its place, and I hope that never goes away.”

Originally published as Reserve Bank rate rise will hit restaurants as Aussies tighten their belts