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Inflationary surges, rising costs and interest rates putting pressure on hospitality industry recovery

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Inflationary surges, rising costs and interest rates putting pressure on hospitality industry recovery

Deliveroo HospoVitality Index Report

Inflationary surges, rising costs and interest rates putting pressure on hospitality industry recovery 

  • Hospitality sector confidence has fallen to +11, from +32 in January 2022, which is comparable to sentiment in the midst of 2020 COVID lockdowns (+9 August 2020)
  • 40% of restaurant owners said they felt positive about the future of the hospitality sector, which is down from 52% at the start of the year
  • At the core of the decrease in optimism is rising produce prices, inflation,  increasing salaries, rental costs, state of the economy and reduction in consumer spending.
  • 62% of restaurants say food delivery will play a greater role in their business operations moving forward
  • 60% are asking for government to provide wage subsidies, 51% want visa processing times fast tracked, 51% want a special hospitality sector visa established for international workers, and 48% are asking for investment to be increased to strengthen local food supply chains

MEDIA RELEASE

[26] JULY 2022

Impacts of inflation, rising interest rates and supply chain issues are putting marked pressure on the hospitality sector, with a 21 point drop in the net confidence score to +11, only six months after recording +32. There are signs of optimism returning over the next 12 months, with two thirds (66%) feeling positive about their business prospects in 12 months’ time, according to the latest Deliveroo HospoVitality Index Report.

The survey conducted by YouGov of more than 300 restaurant owners across Australia seeks to understand the level of confidence in their own business prospects, their views on how the industry is faring, the challenges they’re facing and the measures being put in place to help manage these, as well as getting a pulse check for their outlook of the next 12 months.

The July HospoVitality Index Report revealed that restaurant owners are making both necessary business decisions and demonstrating strong innovation and resourcefulness that will enable them to navigate – and prosper – through the business pressures over the next 12 months.

Three in ten owners are temporarily no longer taking an income (31%). A further third (34%) of owners reported feeling at financial risk and some have had to put business improvement plans on hold (31%). However, many are demonstrating the resourcefulness they showed during periods of lockdowns, by hyperlocalising their food and beverage supply chain (44%), many are offering promotions to attract customers (45%), relying more on delivery platforms (42%), along with making changes to their menu (40%)and some are even growing their own produce (8%).

There was a strong correlation between those impacted by inflationary pressures and the need to access finance. Over a third(38%) of those who said they were significantly impacted by inflation have sought out financing. Perhaps an indication of the continued impacts of lockdowns in Victoria, the data found there were more restaurant owners in Victoria who sought access to finance (41%), compared to NSW (32%) and QLD (28%).

As restaurants look to offset rising overhead costs, delivery has become a core part of managing these challenges, with more than six in ten (62%) saying delivery platforms would play an even bigger role than before – the highest score since the HospoVitality Index Report was established. This was higher amongst takeaway restaurants, with 68% saying delivery will be even more important. This is  a solid increase from January 2022, which recorded 49%.

In light of these challenges, the industry is calling for government support in its first six months, with 60% wanting wage subsidies to employ more staff, 51% want visa processing times fast tracked, 51% said they’d like a special hospitality sector visa established for international workers, and 48% are asking for incentives to strengthen local food supply chains.

Ed McManus, CEO Deliveroo Australia: “We saw great optimism across the Australian hospitality industry at the beginning of this year as the country moved forward post lockdowns. However, despite the unwavering resilience amongst restaurant owners, the impacts of rising costs and inflationary pressures, and difficulties with supply chain are being felt far and wide.

“Restaurants have already demonstrated their ability to innovate and adapt through challenging periods, and it’s incredible to see how they’re responding to these current pressures by localising their supply chain – and some even growing their own produce – it is clear this innovation has not slowed.

“The hospitality industry is at the heart of all that we do at Deliveroo, and we’re proud to be a partner in supporting restaurants in whatever way makes the most sense for them.  Australia is home to some of the world’s finest and most diverse restaurants and cuisines, and we will continue to work hand in glove with the industry to support it through another challenging period.”

Notes to Editor:

The prices of produce that I as an owner have noticed has significantly increased is oil and meat. These are the main products we use for our business, you add increased costs for labour too and everything has become very difficult” 

“So many items are regularly out of stock with suppliers that I don’t know where to start.”

“I’m no longer taking a salary and am having to take money out of the till to pay for my own petrol. Price increases has meant consumers are not eating out as much anymore.”

Methodology:

The data cited in this report was collected via an online survey administered by YouGov, the international research and data analytics group. The online survey was conducted between 23rd May until 16th June 2022.

The online survey was distributed to 13,000 Deliveroo restaurant partners across Australia. Emails were sent to partners to invite them to take part in the survey and provided each with a unique survey link.

Reminder emails were sent weekly. The final sample for the survey included 226 Deliveroo restaurant partners.

About Deliveroo 

Deliveroo is an award-winning delivery service founded in 2013 by William Shu and Greg Orlowski. Deliveroo works with over 170,000 best-loved restaurants and grocery partners, as well as over 190,000 riders to provide the best food delivery experience in the world.

Deliveroo is headquartered in London, with offices around the globe. Deliveroo operates across 11 markets, including Australia, Belgium, France, Hong Kong, Italy, Ireland, Netherlands, Singapore, United Arab Emirates, Kuwait and the United Kingdom.

Key Facts:

  • Hospitality sector confidence has fallen to +11, from +32 in January 2022, which is comparable to sentiment in the midst of 2020 COVID lockdowns (+9 August 2020)
  • 40% of restaurant owners said they felt positive about the future of the hospitality sector, which is down from 52% at the start of the year
  • At the core of the decrease in optimism is rising produce prices, inflation,  increasing salaries, rental costs, state of the economy and reduction in consumer spending.
  • 62% of restaurants say food delivery will play a greater role in their business operations moving forward
  • 60% are asking for government to provide wage subsidies, 51% want visa processing times fast tracked, 51% want a special hospitality sector visa established for international workers, and 48% are asking for investment to be increased to strengthen local food supply chains

 

 

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Lismore’s 76% occupancy rate a sign of positive recovery

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Lismore’s 76% occupancy rate a sign of positive recovery

 

By Samantha Elley

Lismore’s business districts are slowly gaining momentum as they get on with flood recovery.

The latest shop to open, Trident Fish & Grill, in Keen Street was celebrated last week and was symbolic of the city’s recovery and rebirth of the CBD.

“As a council, we are very focused on economic recovery,” said Mayor Steve Krieg.

“It’s not just about the CBD, it’s about the South Lismore industrial estate and North Lismore and all the areas so badly affected.

“But a really optimistic sign is we are back up to 76 per cent occupancy in the CBD across the block.

“That varies from street to street… and that’s a real positive sign in only two and a half years.”

Cr Krieg said it was also a call out to anyone looking to invest in the Lismore CBD.

“Chris and the Trident group started in Ballina,” he said.

“Then up to Alstonville and now they have expanded their network into the Lismore CBD.

“Any other businesses that are looking at relocating or expanding, Lismore is well and truly open for business.”

The mayor is encouraging any new business to hurry up and set up in Lismore before it’s too late.

“I say to many potential investors, if you don’t have a footprint in Lismore over the next 12-18 months you are going to regret it,” he said.

“Because you won’t get one and the prices are going to skyrocket.

“Talk to Lismore City Council …we are really proactive in everything we are doing to trying to get people back into the CBD and get our industrial estate up to full occupancy.

“We want you here, we will do everything we can to help you get here.”

An audit held by Lismore City Council in the week of June 17, of shopfront and upstairs premises in the CBD, showed the positive growth of businesses, despite the increased cost of living pressures.

“It was always going to be slow increases once we hit 70 per cent occupancy but to reach an impressive 76.8 per cent by June 2024 is great news,” said Cr Krieg.

“And with the Worker’s Club soon to reopen, it really is the time to invest in Lismore.”

Recent SpendMapp data has also signalled growth in the number of people visiting the business centres.

Total spend was up 10 per cent in the CBD in May, compared to the same time last year. This included a 20.9 per cent increase in dining and entertainment, a 9.6 per cent jump in professional services, 1.8 per cent increase in general retail and 2.3 per cent increase in food retail.

Occupancy rates across Lismore CBD

  • Keen Street – 82.4 per cent, up from 81.1 per cent
  • Magellan Street – 81.7 per cent up from 76.3 per cent
  • Conway Street – 77.3 per cent up from 72.1 per cent
  • Carrington Street – 77.3 per cent up from 73.1 per cent
  • Molesworth Street – 77 per cent up from 74 per cent
  • Woodlark Street – 65 per cent up from 60.7 per cent

 

For more local Lismore news, click here.

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NSW Government Allocates $500,000 to Boost Women-Led Social Enterprises

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NSW Government Allocates $500,000 to Boost Women-Led Social Enterprises

 

The NSW Government has allocated $500,000 to the Social Enterprise Council of NSW and ACT (SECNA) for a two-year initiative to support women-led social enterprises. This effort is part of the Women in Business Networks (WIBN) grant program, launched in 2023 to empower women economically by backing women-led businesses.

Under the WIBN program, $2 million has been earmarked over four years to help women in small businesses build capacity and leverage formal networks. The 2024 WIBN grant focuses on assisting women in starting or expanding social enterprises in NSW.

SECNA’s Role in Empowering Women

This year’s grant recipient, SECNA, will support 500 women, including those with disabilities and from culturally and racially marginalised communities. The Women in Social Enterprise project aims to connect these women with other social entrepreneurs, fostering robust networks across key sectors and industries. These networks will enable women to share experiences, access resources, and support each other’s success.

Building a Supportive Network

The project will establish a network of champions across NSW, serving as key contacts for women looking to start or build their social enterprises. These champions will host local face-to-face networking events and connect women to necessary resources and support. Participants will also have access to advice through an online community for peer support and virtual webinars. Expert advice and collaboration opportunities will help women overcome challenges and set up their social enterprises for success.

For more information about the WIBN grant program, visit the NSW Women in Business Networks website. Women interested in starting or growing their social enterprises can register for SECNA’s program on the SECNA website.

Government and SECNA Statements

Minister for Women Jodie Harrison emphasised the importance of empowering women in business:

“Our government is committed to empowering women in business to seize opportunities to succeed financially and independently, as well as making it easier for like-minded women to connect and share their knowledge and expertise. The Women in Business Networks grant is designed to support women who are on an exciting path of entrepreneurship and are set to flourish with a little extra support. This grant ensures that women-led businesses can continue to go from strength to strength, not only achieving their own goals but inspiring others to begin their own business journeys.”

 

For more business news, click here.

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Ballina gets ‘beefed’ up with new pie shop in town

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Ballina gets ‘beefed’ up with new pie shop in town

 

By Samantha Elley

If you’ve been wondering about the new store on River Street in Ballina, wonder no further.

Beefy’s Pies have made their way down from the Sunshine Coast ready to fill the bellies of Northern Rivers locals.

These award winning pies have crossed the border, opening its first NSW store at 166-172 River Street, Ballina.

“We’re excited to receive a warm welcome from the Ballina and Northern Rivers community so far and can’t wait to have everyone in store to taste the Beefy’s difference,” says Jason Lyons, General Manager – Operations at Beefy’s.

“Beefy’s will bring its full range of award-wining pies, sausage rolls, sweets and coffee to the Northern Rivers community, making it a go-to destination for travellers and locals alike.

“Our new Ballina team can’t wait to get to know everyone by name, pie and coffee order. Our opening weekend is the best way to kick this off, but we’ll be teaming up with the local community to support businesses, events and groups in the future with our Pie Drives and fundraising events.”

While the store opened its doors on Friday, 28th June, the official Beefy’s Ballina community launch is Friday 12th to Sunday 14th July with one-weekend only deals and children’s entertainment on offer.

Ballina is Beefy’s 10th store and the first in in New South Wales. It joins locations across South-East Queensland including Gympie, Traveston, Maroochydore, Buderim, Kawana, Aussie World, Glasshouse, Mango Hill and Ningi.

 

For more local Ballina news, click here.

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