Tough Times for Restaurants Down Under as Recessions Loom

Restaurants in Australia and New Zealand are struggling as consumers cut back on discretionary spending due to economic downturns and high inflation.

Many restaurants have had to scale back opening hours and menu offerings as patronage drops. Some dining booking services have even exited the Australian market.

Higher interest rates have reduced households' spending power, while higher rents and food costs compound the problem. Official recessions loom in both countries.

Hospitality staff shortages and input cost inflation, on top of the demand slump, create further margin pressure for restaurants.

Interest rate cuts expected in 6-9 months may provide relief, but the restaurant industry will likely continue to face headwinds for most of 2023.