In times of economic downturn Australian consumers are still eating out, according to industry analyst and economic forecaster BIS Shrapnel.
Consumers are trading down their eating out choices but have not stopped going out to eat altogether. BIS Shrapnel’s Foodservice in Australia 2008 report found that many two and three star restaurants and clubs have reported a strong upturn in custom, quoting a rise in dining guest numbers by up to 50 per cent.
“Australians have made eating out a way of life, which has never been more evident than now, when the economy is slowing,” says BIS Shrapnel Food and Beverages Unit Manager, Sissel Rosengren.
“In times of downturn consumers simply spend less when eating out and more frequently choose fast food options or cheaper restaurants, rather than not going out at all.”
BIS Shrapnel is forecasting a moderately optimistic outlook for the foodservice market in the short term, while the country comes to grips with the changing economic conditions. The company is predicting 2.2 per cent annual growth in constant prices over the next five years and has noted that its Foodservice Confidence Index remains quite high.
Despite this high index, there are still pockets of the market that are feeling the pinch. For example, foodservice operators in Northern Queensland, which are usually bustling in the peak tourist season, are reporting disappointing sales.
“It seems the peak tropical tourism season has not eventuated this year,” explains Rosengren. “There has been a sharp decline in international and domestic tourists to the Northern Queensland region and local customers are spending less.”
Foodservice operators around the country are reporting high food costs and a lack of skilled staff as their main concerns. BIS Shrapnel notes that these were the same concerns 12 months ago and will continue to be an issue in the coming 12 months.
Foodservice in Australia 2008 found that the cost of many foodstuffs has risen by 45 to 50 per cent over the last year. Basic and low-cost food ingredients including flour and many dairy products are now expensive and while operators can move to cheaper cuts of meat there is no substitute for flour and basic cheeses.
“Margins are being squeezed tighter and since operators are trying to curb menu price rises, they are seeking ways to limit food costs,” says Rosengren.
