When we jointly tabled our first Restaurant Pulse Check report in July last year there was optimism across the sector.
The consensus was that after prolonged Coronavirus lockdowns, the prospects for restaurants was looking positive, as Australian diners sought to support their local favourites once again.
Happily that prediction materialised with Mastercard’s analysis of millions of transactions from restaurants right across the country depicting year on year growth of 18.4% from July 2022 to July 2023.
Unfortunately as the second iteration of our Restaurant Pulsecheck shows, after this period of double digit growth the outlook of the restaurant community for the next 12 months is less optimistic. And the uncertainty is more pronounced for small businesses (enterprises with fewer than 20 staff).
The key issues surfaced in this Pulse Check report and facing the entire restaurant ecosystem are rising energy and labour costs, inflation and supply chain disruptions. On average 7 in 10 restaurants are concerned about a drop in discretionary spending.
While concerns are present, so is innovation – with nearly every restaurant owner we surveyed revealing they had made a change to address these rising costs. In fact the majority of restaurant owners said they are turning towards creative, innovative and thoughtful practices (menu curation, extended hours, promotions, loyalty platforms, greener operating models and on demand e-commerce) to address the challenges. With restaurateurs who use the Uber Eats app at least twice as likely to be innovative than their peers not deploying on demand food delivery (OFD).
While it’s encouraging to see 74% of restaurants who partner with Uber Eats have a positive perception towards OFD services, there’s no doubt there’s more technology like ours – alongside partners like the Restaurant and Catering Association – can do to help restaurants reach more customers, drive more sales and use data to enhance their offering to customers.
One trend we’re already seeing play out is off-peak delivery windows for merchants – something 46% of restaurants are already promoting to capture a higher share of customer’s wallets. While nearly 4 in 10 are introducing new menu items and limited time promotions.
Another positive theme is unfolding beyond the city centres. With restaurant owners in regional or rural areas estimating that 49.0% of their revenue, on average, comes from online food delivery (compared to 30.4% of those in metropolitan areas). Our expansion into a dozen new regional centres earlier this year is going to help even more regional small business owners unlock dormant revenue.
While there are headwinds for the industry, they are being met head on with the kind of ingenuity that so many Australians have come to expect from our world class restaurants – including the 50 thousand businesses that are using Uber Eats to reach and connect with their local customers.
“The report shows restaurant owners are adopting an array of enterprising approaches to address challenges like the rising costs of goods and concerns about a possible dip in discretionary spending. It’s equally positive to see services like Uber Eats can play a role in helping restaurants with higher volume orders at more times throughout the day.
As well as providing additional avenues to build revenue in cities we’re also seeing an uptake of OFD use outside the metropolitan areas. Our regional expansions earlier this year will help more merchants across Australia harness the demand for e-commerce convenience in the months ahead,” said General Manager Uber Eats ANZ, Bec Nyst.
“In a period of economic uncertainty, consumers are still prioritising experiences and spending on the things they are passionate about. However, the way this looks is changing. While restaurant spend has continued to be one of the most resilient categories, Mastercard’s SpendingPulse data shows that online food delivery is growing at a faster pace than in-store dining, demonstrating the hospitality industry’s continuing innovation and a shift in consumer preferences in a post-pandemic environment,” said Chief Economist, Asia Pacific at Mastercard, David Mann.
“Our sector has demonstrated a high level of resilience and innovation, despite the significant changes to the business operating environment. That said, the industry faces a number of challenges such as an overhaul of Australia’s industrial relations infrastructure, the ongoing skills shortage crisis and the economic aftereffects of inflation. The R&CA is here to advocate and assist members in navigating these challenges,” said Restaurant and Catering Association CEO, Suresh Manickam.
You can read the full Pulse Check Restaurant Report 2023 here.