The outlook for Australian foodservice businesses is not as bad as might be expected considering the economic downturn with half saying they expect the next six months to be steady, according to new research.

The latest American Express Dining Industry Research revealed that many restaurants, bars and cafes had increased their revenues over the past six months despite 83 per cent reporting the current economic climate is a major challenge.

The study conducted by Galaxy Research for American Express amongst 250 restaurateurs in Sydney and Melbourne in May found bars and cafes seemed to be prospering at the expense of restaurants with 28per cent and 27 per cent respectively reporting increased revenues compared with only 19 per cent of restaurants.

The research results follow the most recent Australian Bureau of Statistics retail trade figures that showed turnover for the cafes, restaurants and takeaway foodservices industry in April 2009 was $2.28m, up 5.7 per cent on the April 2008 figures.

According to the American Express research showed that looking ahead to the next six months half of the foodservice businesses said the outlook was steady while 22 per cent said the outlook was positive. Meanwhile, 26 per cent had a negative outlook.

Thirty-two per cent said they expected to be expanding in that period while six per cent said they would be selling out of their business.

While more than a third (34 per cent) said they would continue to invest in employees over the next six months, 26 per cent will try to employ fewer casuals, and 25 per cent will switch more to casual staff. Four per cent said they are likely to consider laying off permanent staff in the next six months.

American Express head of client management Geoff Begg said that as consumers and businesses had tightened their belts the nations it was the more “nimble” business operators that were able to do best.

“Downscaling is very much the current trend particularly among business people who still need to retain and cultivate client relationships while protecting the bottom line,” Begg said.

“Cafes and bars have been able to step in and meet this need much quicker and amd easier than some of the more upmarket establishments,” he said.