Aussies to spend less dining and drinking amidst cost-of-living pressures
Driven by cost-of-living pressures Australians are preparing to significantly reduce the frequency they visit - and the amount they spend - at restaurants, bars and cafes, according to new research by SevenRooms, a guest experience and retention platform for the hospitality industry. The ‘Cost of Living’ research found that as much as 30% of hospitality spending could be lost over the coming months.
The cost-of-living crisis was the defining issue of the recent Federal Election, and today interest rate hikes, the threat of global inflation and the latest Covid-19 surge are putting a significant squeeze on household spending. According to the research, which sought to measure the impact of economic headwinds on the hospitality industry, the already embattled hospitality sector could face a lean spring.
Four in five (82%) Australians feel that the current cost-of-living crisis has impacted their spending habits already, while a further 12% believe they will be impacted soon. The hospitality sector, in particular, will be a focus for their cut-backs. Three-quarters (78%) of Australians will visit restaurants, cafes and bars less - and 79% said they’ll spend less when they do visit - as a result of the cost-of- living pressure.
Before the cost-of-living squeeze the average Australian spent $129 dollars per month visiting or ordering take away from restaurants, bars and cafes. Today, however, they’re spending just $91 - a drop of $38 and almost one third (29%) of their previous spend.
The research also reveals that:
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Dining out is Australians’ primary focus for dialling back their discretionary spending. One in three (32%) are treating this as their priority cut-back, followed by non-essential travel and non-essential shopping, such as clothing, homegoods and personal care items.
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The average Australian will visit or get takeaway from restaurants, bars and cafes twice a month, while one in eight won’t do so at all.
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Restaurants will bear the brunt more than most, with 60% of Aussies planning to dine out less frequently, followed by visiting bars (53%), getting takeaway (50%) and visiting cafes (43%).
“After two years in which they had to use every once of their resilience, innovation and adaptability, there are concerning times ahead for Australia’s restaurants, bars and cafes,” comments Paul Hadida, General Manager APAC at SevenRooms. “We’re now feeling the medium- to long-term impacts of the pandemic, and many Aussies plan to cut back their expenditure on eating and drinking out. It puts a fresh burden on tens of thousands of businesses who are also contending with rising Covid-19 case numbers and historic staff shortages.
“However, even in the wake of rising food prices and cost-of-living pressures, Australian consumers say there are plenty of ways venues can incentivse their loyalty. Whether its complimentary drinks, personalised offers or loyalty points, there are opportunities for venues to be strategic to keep their businesses busy and customers engaged and loved. While it might be a lean spring for some, there are ways to minimise the impact ahead, exceed consumer demands and grow towards the summer and the industry’s traditional peak season.”
When consumers are more reluctant to visit and spend at restaurants, bars and cafes, venues must identify ways to incentivise loyalty by providing meaningful experiences for their existing customers. According to the research, Aussies say their loyalty would increase if they:
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Received a complimentary drink or appetiser (34%)
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Received personalised offers based on a previous visit, for example a discount at the restaurant or bar, complimentary dish/cocktail etc. (33%)
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Received dining credits for hitting a new loyalty tier, for example, $100 tier achievement, free meals etc. (31%)
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Received additional loyalty points, for example 2x points per dollar, bonus points etc. (28%)
Nationwide impacts
Just as the pandemic has had vastly different impacts on different states, there are differences in how the cost-of-living pressures are being felt too. Key features include:
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So far, just 73% of Victorians are feeling the impacts of the cost-of-living crisis; the next lowest state is Western Australia with 83%. The highest is South Australia, where 90% have been impacted already.
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Victorians (71%) are the least likely to cut back on visiting hospitality venues, too, while South Australians (90%) are again the most likely.
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Four in 10 West Australians plan to visit restaurants, bars and cafes less than once a month, considerably higher than all other states, and in particular New South Wales (21%).
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Full state-by-state breakdowns of the data can be found in the ‘Cost of Living’ report.
Younger Australians feeling the pinch
While the impact is being felt most keenly amongst young Australians, with 90% of 18-34-year-olds (higher than the 82% national average) feeling the pressure, they’re more inclined to visit venues if they receive incentives.
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43% would visit venues if they received a complimentary drink or appetiser (national average 34%)
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45% would visit venues if they received personalised offers based on a previous visit (national average 33%)
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38% would visit venues if they received additional loyalty points (national average 28%)
To learn more about SevenRooms visit sevenrooms.com
