20th May, 2014

Cafes and restaurants driving growth in retail sales

New data has found that food sales in cafes and restaurants are driving growth in Australia’s retail sector.

The research from the Australian Bureau of Statistics found that cafe and restaurant spending was up by 1.8 per cent in the March quarter, once adjusted for any seasonal variations.

This made cafes and restaurants the fastest-growing retail sector, ahead of areas like clothing and hardware which shrunk in the March quarter.

Cafes and restaurants also outperformed takeaways and supermarket sales, the main competitors within food and beverage retail sales. Takeaway sales remained unchanged while supermarket sales rose by half a per cent.

These latest figures will further add to the positive outlook of the cafe industry in Australia. Earlier this year a report by IBISWorld forecast 5.3 per cent growth in the cafe sector over five years, welcome news for the country’s 6,600 cafe owners.

Western Australia records drop in retail sales

While the latest figures will be a boost for cafe owners, they also showed that growth was not consistent across the country.

While New South Wales, Queensland, Tasmania and the Northern Territories all recorded positive retail growth, other states showed declining rates.

In Western Australia, retail spending fell by 0.9 per cent, the largest decrease of any state.

While decreasing retail sales will be a challenge for some within Western Australia, growth in the cafe and restaurant sector should insulate business owners from the challenges faced by other retailers.

Even though the cafe industry in Australia is recording steady growth, owners still need to ensure that they have comprehensive cafe insurance. Public liability, breakdown of equipment or employee fraud can all hurt the bottom line of your firm even as sales increase. The long-term success of the cafe industry in Western Australia will depend on owners being prepared for any eventuality.

Author: Murray Bruce