Menu prices tough to swallow, but how much are customers willing to cough up?

Remember when a cup of coffee cost $4? I paid $6.50 for a filter coffee in the Brisbane CBD recently.

Price hikes are not just hitting coffee. A $9 schooner of beer is now closer to $12, a $15 glass of wine is now $20 and mains average between $35 and $50, depending on where you’re dining.

Even as prices rise, new venues – like Guy Grossi’s Settimo – are still opening around the city.Credit: Kirsty Sycz

It’s reflective of the challenges facing the city’s hospitality operators. Despite exciting venues opening and packing out service every other week, many, including celebrated mainstays of Brisbane’s food and drink scene, are struggling under conditions that have been worsening for years.

“Inflation has undoubtedly impacted the cost of raw materials, utilities in particular,” says Griffith University’s Business Lab director Graeme Hughes.

“Insurance costs have risen substantially and so have labour [and energy] costs. There’s been real uncertainty around the ongoing economic conditions.”

This is despite inflation having fallen since its peak in December 2022.

“Unfortunately, from a consumer perspective, that doesn’t mean the prices come down. That just means that’s the new price,” Hughes says.

Luckies Kitchen owner Nick Wigley is aware venue operators aren’t the only people doing it tough.

“We signed our lease in May 2022, which was the first month that they started doing the interest-rate hikes,” he says.

The Bulimba restaurant has operated against tight margins since opening two years ago, absorbing costs where possible before passing them down to customers.

“We haven’t changed our prices as much as we should,” Wigley says. “We’re working harder. I’m in the venue a lot more than I should be to try and soften the blow.

“I talk to other business owners who have had to put their prices up to meet the cost increases. But I still want to make sure [Luckies Kitchen] is an approachable place for people to come.”

They’re not immune to the current climate, though. “The price of beer, for example. Where we would have liked to charge $11 for a schooner, we now need to charge $14.

“We were getting a keg of beer for $300, but that keg of beer is now about $400. It’s the same with fruit and veg, chicken, meat – everything has just gone up in price.”

I worked in hospitality throughout my early 20s.

In that time, I saw the rise and fall of countless venues, along with gradual price increases. It was never easy to pass on to regular customers. But it was just as difficult to see unpaid invoices pile up, and to have my shifts cut to save on wages.

That harks back to the “new price” we’re left to reckon with. While Hughes says consumers eventually adjust, there’s always going to be opposition to a price increase, “whether it’s 20¢ or $2″.

Luckies Kitchen owner Nick Wigley says he’s in the venue “more than he should be”.Credit: Luckies Kitchen

“[People think] ‘I’m familiar with this price and this is what I think the value proposition is.’ And of course, establishments are stuck between a rock and a hard place.”

He does, however, believe we’ve reached the ceiling. “We are curbing inflation. You know, we’re not going to see a $10 cup of coffee in two years’ time, we’re not really on that trajectory.

“The levels we’re experiencing at the moment will continue for the next few years. There’s only so far that you can push the consumer until they actually pull back and stop buying completely.”

It’s not fair to ask customers – themselves doing it tough – to be the life raft for struggling venues. But without timely support from higher powers, most must rely on more bums on seats.

Wigley estimates he would need an extra 100 people through the door to cover the business’s biggest expenses more comfortably. “But there just isn’t that 100 people a week out there at the moment,” he says.

It’s not through lack of trying. The restaurant has a range of promotions including $5 bao buns on Tuesdays, unlimited dumplings on Wednesdays and offers on EatClub, an app that allows venues to create deals during quiet periods.

“[EatClub] is something I never wanted to do [because] we do take a hit on it,” Wigley says. “But if you do look at the numbers, you do still get some petty profit for it.”

Sitting on the more enjoyable side of the food and drink industry now, I try to think of the back-of-house pressures when a menu price seems shocking.

I don’t go out as much or spend as liberally as I once did, but when I can, I do so wisely. Because I’d hate to see the news of recent weeks continue for the city’s otherwise burgeoning dining scene.