By Henry Johnstone
Publication Date: 2026-05-12 12:06:00
As the cost of living crisis deepens and Australians curb discretionary spending, dining out is increasingly struggling, putting new pressure on the already strained hospitality sector.
New research from ING shows almost three in 10 Australians plan to limit eating out in restaurants and cafes. At the same time, Australian Restaurant & Cafe Association (ARCA) data shows one in nine hospitality businesses became insolvent in 2025, while average restaurant profit margins shrank to just 2.8%.
Companies need to do more to control costs than just reduce portion sizes and increase prices. Image: Dan Gold / Unsplash
Against a backdrop of continued interest rate hikes and rising input costs – which have risen by 20-40% since the pandemic – food consultant Suzee Brain said venues are coming under pressure from both sides.
“Costs are going up and sales are going down, so companies are really in a bind right now,”…
