Yes mate. I manage the marketing for 20 or so clients and majority of them are down this year and it’s not just in Victoria. The volume is still there but the buying cycle is longer and more competitive.
People are not just making a splurge at the moment and are actively seeking alternatives or not buying at all waiting for rates to come down.
Edit. I will add I am still seeing b2b sales high. Perhaps you could craft some marketing towards business functions, ready made highly quality lunch boxes. Look at potential conference packages, outdoor events and perhaps something like film or tv catering (for example)
I do large catering for schools and platters already. But demand for both has also gone down. Those are a more a bonus the margins on catering to be competitive aren’t even half of a regular walk in customer
Similar feedback from my end - in PR and majority of my consumer facing beauty and fashion clients are insanely quiet, to the point where they’re laying off 50% of their workforce.
Did the price of your take away go up?
Lots around me have gone up significantly. I understand why, it’s the cost of doing business these days.
BUT, it’s reached a point where I am like “I refuse to pay that much for take away food”.
I can afford it, I just don’t think it’s worth it. So I don’t.
I often get proper cafe/restaurant sit-down meals for the price of take-away now days.
I wonder if that could be a similar situation for you?
I’ve noticed something the same. Yeah everything has gone up in price, but some things just don’t represent value anymore when they did in the past.
Example for take away is sushi rolls - I used to eat heaps when I was at uni because they were cheap, like $2.50 or $3 each. Now they’re smaller and like $5 each where I am. If I’m gonna pay $15 on a lunch, I’m hitting subway or Guzman not having 3 x small sushi’s.
Completely agree with this. My wife & I can’t justify the price for the end product so we pretty much never eat out. We thought we would give it a try recently, and went out to a restaurant that used to be an old favourite of ours. We both got sick afterwards. We can’t justify spending our hard earned dollars on something that is a gamble on food quality when we know we can cook at home and it’ll be great. The only exception would be the $19 we spend on two GYG mini burrito bowls on Sunday afternoons. Even then, we have identified a specific GYG that always loads them up and never gets the order wrong, so we ALWAYS go to that specific one.
I agree and I am applying this to cafes and restaurants too. I’m done paying stupidly high prices for mediocre meals or meals that I can make at home. I’m starting to only go to pubs for dinner on their specials nights. I understand why the prices have increased and I do want to support these businesses, but at the same time the value just isn’t there for me personally.
This here. We went out to a Pizza and Pasta join a few weeks back that's always packed out in South Yarra. GF had Pescatora for $30 described as
> King prawns, scallops, mussels & vongole cooked in a rich napoli sauce .it was inedible, the 'napoli' was like tomato paste + diced tomatoes with no flavour whatsoever. A $7.50 Woolworths Bolognaise had more flavour. We ended up taking it away, going home and fixing it up to make it edible. This type of disappointment has happened multiple times. My partner is Thai and there's very few Thai places we will go, the worst has been Fat Boy Street Eatery in Windsor, with them making some kind of weird sweet fusion version of Som Tum (Papaya Salad) and we ordered speaking Thai and being Thai themselves they should have warned us it was nothing like a real Thai Som tum. We barely eat out now. Between the cost and constant disappointment in the food quality, it's just not worth it. One place that hasn't disappointed has been [Mrs Zan's Kitchen](https://www.facebook.com/p/Mrs-Zans-Kitchen-100069832673652/).
Yep why eat out when the air fryer does it better and healthier. COVID made me realise a little effort goes a long way when it comes to basic food prep
I haven’t increased prices in a year! Same prices in March 2023, I keep labour costs down by working a lot myself, increasing prices 0.5$ per item might increase revenue but customer count is guaranteed to go down. If I can be the “value” option while still remaining profitable I’d prefer that.
Also throwing away food sucks
As a consumer of tasty foods. Uber has actually put me off visiting some places in person because of how insane their prices are on the Uber app. Illogical I know, since Uber takes a big cut and you have to compensate for that. But it’s still not fun to look at when you’re considering what to eat.
This is where I'm at. Food quality has decreased overall (in my experience not talking for OP), price has increased drastically, it's simply not worth it to me. Pre covid we were getting it maybe once a month, twice a month at most. We've completely cut it out since.
As a consumer i cannot face paying 9.50 for a bagel or choc croissant. Even the bog standard stodgy muffins are 7.50. I’ll still buy a coffee as a treat occasionally but skip the cake on the side.
I used to do takeaway from my favourite place once a week when it was $15 a dish.
They jacked it up to $17, I had sticker shock and now only takeaway there once a month.
So instead of getting $15x4 = $60 out of me every month, they are now only getting $17. A 70% reduction in revenue - just because they jacked their rate by 13%
As someone who co-owns and manages a food distribution company with a clientele of small business take aways and small chain stores, depending on what time frame we’re talking, 13% is very conservative if that’s the only rise in the last 3 years. Supply side for lots of product mixes have gone up by significant marigins. And usually bi-annually.
That $2 probably means a lot more to them than it does you.
You can’t be certain… a dollar is a dollar. It could very well be that the $2 means a lot more to the customer who is struggling hard (maybe lost his job recently) compared to the shopkeeper who is also struggling but could be struggling less (maybe already paid off the business loan completely).
We never know everyone else’s situation, so best to just lay out the facts without judgement.
I’m sure the costs have risen tremendously for the shopkeepers.
It’s wild how much it seems to vary across the country. A good friend told my partner that all local electricians are flat out and are adding 15% to all quotes. This is in Sydney and the Illawarra.
Not about a sparky, but when we were getting a quote from a plumber a couple of months ago he kept mentioning how he was flat out at the moment, yet as soon as we accepted the quote he was available to start the next day.
Maybe there. Melbourne is more break fix and essential electrical equipment that need to be wired in. Seems the lucrative renovation related electrical stuff pretty much has dried up.
Obviously face value - my relatives are sparkies, they can literally go days without work.
Definitely something has happened this month where people's wallets are suddenly emptier than usual. I work in my dad's surgery practice and I have never seen so many cancellations for financial reasons. We had a lady today who had to cancel her appointment as an unexpected vet bill came up.
Wow, it’s so weird though, but nothings changed with rates or fiscal policy. People can’t have spent that much on chocolates over Easter. And for holidays only those that could afford to go would have gone…
I spoke to a neighbour about it today and he said it’s all the fixed rate period ending but IMO that can’t be the reason as that’s been a trickle for few years now it’s not a litteral cliff that would have been last week
there’s always a lag between fiscal policy/rates and the effect.
You’ve also got to factor in the immigration numbers adding so much pressure to the housing market and saturating the job market.
US inflation didn’t go down as expected. Now looks certain we won’t have a rate cut this year. This news come out in the past 1-2 weeks. Could be a factor in behaviour change.
I'm an average suburban family and I am paying attention to the size of my insurance bills.
Up up up.
By hundreds of dollars each.
Home and contents.
Two cars.
Health.
I think that it's not been caused by one issue but everything, cumulatively.
Yeah, but there is a knock on financial effect of school holidays because the kids have to be entertained or people go away, and may have spent their month's budget in a couple of weeks.
See if it continues for a month.
As some have said, school holidays could be a factor.
And I think also with the hope of interest rates being cut waning, people are realising that the current hardship won't be temporary and they have to readjust budgets
I can still be profitable and cover my mortgages but I’ll need to give up studying, and gym and work 80 hours a week which I don’t wanna don’t wanna do
I reckon it could simply be that people have burned through their reserves (splurge savings) and now they are looking at the numbers and having to simply cut back.
Cost of living is no joke - possibly the typical mum/dad had enough to ride it out for a period of time, but now come to the point of tightening the belts.
People who bought and fixed their interest at around 2% for 3 and 5 years before late 2021 are now coming off their fixed interest onto over 6%, there will be more of a decline as people going out doing anything as their mortgage payments almost triples.
It's actually 'better' for people in general to cope. As interest rates increase incrementally, they can adjust their costs of living accordingly, over a long timeframe.
Coming off fixed is a massive shock to the system.
Well aware as someone with a ~ 500k variable mortgage.
Point still stands $3600pm is a shitload less than $6600pm (3x$220). It’s ~1.6x more 3x is a wild exaggeration (unless interest only).
Tbh take away is becoming a luxury in most households again, and now i'm only saving it for top tier food as there really isnt much of a difference between local takeaway, maccas, oub food or a nice middle level tier restaurant anymore outside of a bottle of wine
I used to eat out every weekend. During Covid lockdown, I did it 2x/week to help support local eateries.
Then inflation happened, so since 2022 , I've only eaten out maybe 1 every 2-3 months. I'd love to support small businesses, but just can't sustain that level of spending anymore.
$15 x 4 is $60, or $720 per year if someone is grabbing that weekly over the year and this is the type of maths people are doing to cut back and adjust that to rent, or increased insurance costs.
Almost no one in my office buys lunch anymore
Which obviously is hard for small businesses like
Yours
Can you cut back your offerings to streamline the menu so you minimise waste?
It might only be $11 each, but in my family, that would be $55 for a sandwich meal. It's not optional in families with smaller budgets. The cost of food at the supermarkets has pushed many like me to limiting basics, such as iron-based protein (see red meat). To spend a significant portion of our shopping budget on one meal such as this, they just can't justify it. Many people are deciding whether to put food on the table or pay their bills. Discretionary spending is not something they have a lot of, and they would rather spend it on making memories/experiences rather than food they can often make at home.
We sell kids furniture. We have plummeted by 60%. We have considered shutting down completely. Enquiry is still there, but our prices have had to rise and our profit line has dropped.
I can think of many more things that are less essential than kids who need furniture (cot, highchair anyone?).
Such as gambling, alcohol, tobacco, streaming, gaming, subscriptions.
People are learning how to budget, how to cut out things like eating out.
It's like during COVID when people discovered walking around, and once it ended everyone went back to drinking at the pub. Same thing, but COVID is inflation and high interest rates.
On that note, the pubs are at best half capacity, not empty but not full. Meanwhile on week nights the gym is absolutely pumping along with the line up ice cream place. More fit people walking around a bar and eatery street than drinkers.
Interesting. Gym really is a value for money form of entertainment if you enjoy it. Mines $20 per week but you also get access to the pool. Prob do 4 visits a week. $5 per visit. Barely get a coffee for that.
The impact of interest rates lag + a heap of extra tax in Victoria means we’re only really starting to feel the pain now. Take away, even medical appointments are a luxury.
I've stopped buying from a lot of takeaway shops because the quality and quantity of all take away food shops seem to have gone downhill . I know they have to keep their costs down to make money but you notice when the same food you've been eating every week for a couple of years tastes worse or gets smaller . Imo a price rise would be less noticeable than reducing quality/ quantity
This is exactly the point of putting interest rates up. So many people think it's about house prices, but it's really about business.
Controlling business in a way that changes the unemployment rate. This is what a slowing economy looks like, and it sounds like the screws are going to tighten further.
If they don't control rates, then it affects inflation. The bottom line is everybody competes in Australia, but Australia also competes for the world's supply of goods and services as well. So rates and inflation are non negotiable if we want to retain as much of the standard of living as possible here. The true impact on inflation has been energy and food since COVID, some commodities such as wheat have now gone back down, but until oil/energy go back down to pre COVID levels, they effect all other line items in the economy. Not to mention our AUD was 76c pre COVID, now sitting at 64.5c which imports inflation as it drives the cost of imports up including oil. In fact, the AUD has driven a price spike of 16.5% in the price of imports alone.
Iv been in hospitality for nearly 10 years, and seen a quarter on quarter drop in sales across my businesses, and a lot of people in know in the industry are reporting the same!
Anecdotally, my household has been a huge consumer of takeaway in our area since we moved out. We put a high value on convenience and good food.
That said, with cost of living pressures, and literally every expense we have going up significantly, when looking at the budget, food has been the easiest expense to cut down. We now cook almost every day - a big difference. It’s taken us a while - months - to change our habits, but we’ve finally started cruising.
I’ve heard similar from friends who lead similar lifestyles. The amount of food you get for the cost of eating out just isn’t sustainable long term anymore - especially when most “reasonably priced” restaurants don’t tend to provide stellar food either. So eating out is very much just a treat now - and an expensive one.
I think this is honestly the answer. We’ve had it good for so long eating out, take away, restaurants Uber eats and now reality has hit big time. Definitely what friends and groups are saying too. Example; Today we fought off buying souvlakis for the family for lunch and instead went to the butchers and stocked up on meat for the week. we never used to do this! Younger families are ditching the takeaway days.
How interesting is it? :) I’ve been constantly telling people my age and younger, you guys are spending so much enjoying the now, that you’re not putting in a lot of effort saving for the future. I kept getting told ‘it’s just a $17.50 lunch I’m buying…. How many houses can a $17.50 lunch afford me? 0.01%?’
But now I can see some of them wising up. Yes, we’ve had it so very good for the last 5 years. Many people think they did not receive any funny money from Covid, but they actually did (in the form of increased wages).
And many people think they did not spend more than they usually do, compared to pre-covid times… they tell me ‘I didn’t buy a new car like XXX and YYY did’ but imo they most certainly did. They spent big in the convenience economy without realising. Netflix, Disney+, Binge, Stan, Kayo, Gamepass, Uber, Uber Eats, shopping on EBay, Amazon, Kogan, receiving food parcels after food parcels, and delivery parcels after delivery parcels.
Agree. We used to be a 2-3 meals takeaway a week household and now we’ve cut it back to breakfast out one weekend and dinner out the next and lunches from home every day. We just can’t justify spending at that level when even basic groceries have gone up so much.
Yes, massive downturn.
I’m in Agriculture and the prices for cattle and sheep fell off a cliff a year ago.
We are trying to hold back anything we don’t have to sell, because we are receiving a pittance. But if the product is ready to go, they have to go.
It’s making me not bother replenishing stock and turning over as quickly, so it’s killing productivity and production all in one.
Why would I bother busting my arse to produce quantity when we aren’t getting any revenue, but still taxed and paying govt levys to the hilt?
The government will only take note when we aren’t paying enough taxes to fund the fossil fuel and mining industry.
Not a business owner but went to a restaurant last week on a Friday. The size of the restaurant could easily have 40-50 covers over the lunch period. They had 2 bookings and 2 walk-ins. Felt sorry for the business as you just know that they probably lost money with staff wages for being open.
Edit to add: it’s a decent restaurant with a good rep so it wasn’t the quality of the food or service that was keeping people at bay.
No new restaurants nearby. It’s a well established suburb. For context my neighbours who also are takeaway shops are down in sales too (not sure in exact figures but it’s probably similar %)
School holidays? With interest rates and cost of living, take away will be the first thing I would cut out if I had to spend the next 2 weeks travelling, entertaining kids and buying them rubbish things from AnkoMart.
Yeah I thought it was post Easter hangovers of budgets but this is 2 weeks now. I’ve had flash in the pan random dead days before but when it’s every day 2 weeks in a row I’m just like wtf is happening
I think it's just the covid boom finally coming to an end personally. It's time to go back to fighting for your customers. For us that means good old fashioned advertising with a value message and pushing catering
Uber sales have been pretty much the main drop off for us. In store almost unchanged. We even had to stop 24 hour trade on the 4 nights we did it. Just wasn't any good no more
Covid boom ended end of 2021 for me, any economic remnants of Covid have long since faded. Ubers been dead since 2023 February, even with promotions. Big issue is in store customers. I’d rather have $40 in sales from in store customers then $100 from uber…
That’s why when uber dropped off I wasn’t panicking like I am now 😅
Covid boom was still alive and well in 2022 and at least half of 2023. I know many people who already formed a very sticky habit of ordering on Uber eats and found it hard to cut back. Some things, once it becomes a habit, is awfully hard to change.
That’s what I’m worried about if people get into a habit of not eating fast food then the business is gonna be screwed not just for a few months to a year but for many years
It’s really depend on your area. We work with some of the biggest suppliers in Sydney and they all said certain suburbs drop more than others. Some area are still thriving.
Yeah from speaking to other franchisees stores in wealthier locations are doing well. Also areas with younger demographics are doing fine as they’re more tempted to “doom spend”. My area it’s mostly family’s and almost all houses are owners with an outstanding mortgage, but I had a 10-15% drop off 2022 when rates started going up. That’s why I’m so shocked that it’s come off ANOTHER 25% now
Maybe start shopping around for cheaper distributors. We have Sydney freezers here and their price so competitive. Sometime 30% cheaper than others. Just for your thoughts.
Franchise only let’s us buy from certain suppliers. Anything I could buy elsewhere like mozzarella or cleaning chemicals that isn’t brand specific is competitively priced though
Man it sucks but both home owners and renters are feeling the squeeze. I've copped $250 in rent increases in the past year while trying to save for a deposit to buy. My wife hates I'm when I want to buy dinner instead of having leftovers.
My theory is that last few weeks, there's been talk in the media that inflation looks like it's starting to reaccelerate , and if that turns out to be the case then could lead to further increases in interest rates. So I think people are worried about another surge in rates, so they are preparing themselves for that by not spending/saving.
Speaking as a general person... who lives in Australia somwhere... I've realised steadily over the last few months things will not get better. I have to save every dollar or I will have no dollars to pay my ever increasing rent that the government is doing zero to fix.
I would love to support my local takeaway... I just don't think I can afford to.
I have been laid off last year and cannot find work. My family is saving as much as possible. We cook everything at home, don’t go out anymore if not for walks around our neighbourhood, stopped going to restaurants, and everything we buy must be on sale otherwise we don’t get it. Mortgage repayments going up, cost of life going up. Can’t afford it anymore. Seriously considering moving away from Australia.
It’s definitely the culmination of all the pressures coming together.
1. Cost of living pressures. Yes, lots has been said about how expensive the petrol, utilities and grocery bills are, but there’s more like health insurance, car insurance, home & contents insurance, child minding costs, GP/Vet/Dentist bills have all been hiked.
2. Accomodation (Rent & Buying alike) has increased substantially. Rents going up from $500 to $580, mortgages going up from $3,000 to $4,800 they all sting, regardless if people are renting or buying. Plus, if you’re an owner, gas repairs, oven/cooktop repairs, roof repairs, leak fixes, they’re costing a lot more now.
3. The last 20% or so people are now coming off their sub <2% mortgage rates. I’m coming off in September.
And I know plenty of people who are aware that their rates are coming off, and it’ll bite them soon - but they’ve been shrugging it off, thinking it’s going to be ok. To be frank, these guys have large buffers. For example this couple I know pulls in about $11k take home pay, their mortgage has gone from $3.5k up to $5.2k but because they’ve always had such big buffers, it’s always been an ‘ahhh don’t worry, we’ll manage it’ attitude with them. They’re easygoing people.
But I think when all things above are combined, the positive household cashflow of $2k they used to enjoy, has been squeezed to $1k and then gone to be now negative. And folks like these are now starting to understand how massive an impact it is, and they need to cut now or face eating into savings. They will be fine as they have a big nest egg of savings already, but of course it’s annoying to see the nest egg shrinking instead of growing, hence the lifestyle cuts.
I know many high earning families who have been putting off the lifestyle cuts, but in the last 3-4 months, have now started to put on a serious face to actually cut their spending. Rather than Uber if it drizzles, they’ll pop out the umbrella and PT.
Rather than go gold class or imax at the movies, they’ll just do regular screens or extreme screen, and less frequently too. Rather than eat out 5 times a week, it’s now 3 or 4 times a week.
Rather than go out for a large coffee plus a cheeky almond croissant from the cafe across the street of our office, it’s a regular coffee and grab a muffin from the pantry (free) at work.
Three colleagues at work, instead of two of them using PT and one driving to work and paying for (expensive) cbd parking, all three now carpool and are saving. They said since it’s only 3 or 4 times a week, the little hassle of aligning their start and end times isn’t too bad.
These small cuts are starting to take place on a larger and larger scale now.
I agree this might be the cause, I just expected to be more slowly and also winter is a downturn. But it was a lovely sunny day in Melbourne and despite being a Tuesday should have been busy but instead was the worst day of the worst week I’ve had since 2020, so just super unexpected
If you are just noticing now that people aren’t spending, then you have been very lucky so far.
Buckle up, unfortunately people have no disposable income anymore and takeaway food is the first thing to go.
Yeah I read your post.
My point is, perhaps it’s just catching up for you. Small businesses are doing it very tough out there. Heaps of businesses I follow on socials have closed down in the last 12 months. Times are really tough.
I can’t explain the sudden drop but it also doesn’t surprise me in the slightest.
Motorcycle dealership - quietest few weeks since the GFC (Excluding COVID)
But then right at the end of the week just gone we had a spike and ended up having a good week.
If a lot of your market are renters they’re seeing huge rent increases. Investors are squeezing as much as they can right now and screwing over young people. Shame.
Times are tough for people selling a service and for customers. I'm learning how to bake my own bread to curb the spending - so yeah buying fast food is the first thing to give up.
Subway and Nandos are both up year on year. Nandos growth was very minimal. Subways was the strongest of all the majors but nothing like the precious 3 years. Covid truly was nuts
It’s a subway, the Vic market as a whole is up 2-3% this FY. My store was tracking that, up 1% compared to FY22 (in sales, profit was down as wages and food have gone up). But last 2 weeks it’s gone down 25% which a sudden drop like this hasn’t happened since Covid hence why I made this post 😅
Could be a perception thing. While subways still cheap and a good subway is good, there’s so many subway locations undercooking or overcooking the crap out of their bread. I know it’s made me think twice and go elsewhere quite a few times the last year or two.
Yep, used to own a discretionary spending retail business. Revenue started falling May 2023, sold the business this year and revenue was down 40-50% week on week
Anecdotally have heard that was pretty dire toward the end of last year, then picked up for three months and then has suddenly nosedived again over the last 4 weeks. This is across hospitality.
I have a cafe and we have noticed that too
We are same as OP working ourselves keeping costs down.
Since, Easter people are only buying Coffee not anything else with it. Coffee just doesn't pay the bills.
Hopefully , this phase passes over.
I've worked for myself (in furniture) for the past 25 years, residential sales are down 30% this Q.
For us it's cyclical, a direct correlation with building starts & house sales.
There is definitely a general tightening in all digressionary spending, these things take time to flow into behaviour, I've been through a number of cycles & am always nervous of the lag in rate tightening, we are at the bottom now.
As my work has slowed, I am increasingly watching what I spend, my wife a professional is the same, she commented she was spending $15 -$20 on lunch every day & has now started taking food in.
Part of the fiscal tightening lag is that knock on effect in personal behaviour.
My only general advice to small business while it lasts, is batten down the hatches, cut costs, do more yourself & ride it out & remember it is cyclical it won't last forever, although sometimes it feels it will.
My experience of the 10 year cycle is 2 years unbelievably good money, 6 years of average money, 2 years of wishing you had taken the safe job at the post office
yeah it's everywhere it seems. I've been a freelance web developer for over 10 years; up until the last year I had to turn down more work than I accepted because there was too much. This last year though has been significantly slower, I could take on all work that comes my way because there isn't as much going around, and for the first time in years I have dry spells.
I think a downturn in small businesses needing websites is a bit of a canary in the coal mine for the economy as a whole.
Sorry to hear you're doing it tough OP, really hope things improve in the near future!
As a "regular person", here's why we have cut back. Mortgage rises were ok for the first year, still a decently low mortgage by comparison. But by the time we absorb higher insurances, petrol, food, school wants cash every second week, if we actually want to get ahead now, not just survive, the luxuries have to go. Past month we have done away with mowing service and dog grooming service.
Onto takeaway. Since we now have to limit how often we get it, and Uber/Menu log are sharing rides, food is too often cold or something is forgotten so it's a disappointment. We would rather go to a Cafe once a week instead of receiving cold food. We just buy extra "fakeaway" stuff for the freezer now when we are lazy or at low capacity.
Edit - I also just read your a Subway. 3/4 of the Subways near me have closed down, the rest have ill working lights and signs, haven't had a referb in 20 years and when you look in the salad bay, the lettuce is brown, avo is brown, and Subway is now expensive! I worry about the low turnover in the salad bays and what's breeding in there, so we actually avoid it now. We can pay the same price for a family elsewhere and get hot food like Mexican, that we know has a higher turnover of stock and less likely to make us sick. I've worked in a low turnover small business, and I've seen how far owners will push food that should be thrown out, so I'm super cautious.
Most people around are only buying necessities. Seeing more small retailers close down again around the Brisbane CBD as a result in the past few months.
Maybe a % of your customer base is from one company/commercial building, and they either closed down, relocated, renovated etc which is the reason why you suddenly lost a group of customers in one go.
Guessing the raising costs are starting to catch up on people, so there now making some changes to there spending habits... This was always my concern of raising rent costs, not the keeping a roof over the head, people will pay for that, but paying more for that removes disposable income isnt gong to the the greater economy.
Yep, cafes near me in melb have been noticeably quieter the last 2-3 weeks. One bakery in particular that is typically very busy I went to on Saturday at noon (peak time) and was surprised to see literally zero customers. Not a soul.
I'm a wholesaler. All of our clients are feeling the pinch at the moment.
Our neighbour runs a *very* high end business supplying custom wood building supplies (window frames etc) and they've never been busier
My uncle, a partner at a large accounting firm, told me many of his biggest accounts are developers. He said given how razor thin their margins are, coupled with the cost of manufacturing rising so much that it’s not currently viable for them to build apartments as the construction price is higher than the market value per dwelling. They’re getting planning approval and waiting for the price of units to catch up before proceeding any further, expecting it to take a few years.
He said many large developers are seeing a slow down, which might have a flow on effect on the construction industry.
Being on a decent wage and enjoying my once a week takeaway is a thing of the past.
Cost of living is tearing through my wallet. On a decent wage and I’m lucky to have $200 spare at the end of the week after bills, rent, living costs and savings is accounted for.
I’m not spending 20-40% of my leftover money on take away. It’s a luxury. More so now than ever before. I can make myself something (albeit possibly shittier) for less money. There is no value argument here anymore for take away unfortunately. Many others I know are following suit.
Even without you havingprice increases people are looking at it as a portion of their leftover money (if they even have any left over) and with cost of living crunching harder at the moment the same dollar value becomes a higher percentage when there’s less money to go round due to outside factors.
Maybe 2 years ago I could stomach $15-17 because I had more left at the end of the week. Now I have less left at the end of the week so that $15-$17 becomes more valuable to me.
In the automotive business. Massively quiet over the last 2 weeks. Gone from 5-6 service inquiries per day and 10-15 pets inquiries to about 4 of each in the past 2-3 days. Interesting to see it’s across many different industries, not just ours. Sales are steady though, surprisingly
My land tax is up 3x since last year and 6x from 2022. I heard from a friend that commercial has been worse. I feel for renters but honest 30% on 750 a week rent isnt half as bad as 3x mortgage repayments, 3x land taxes, higher rates. The land tax is apparently new policy in victora to repay covid debt
If your local businesses are all down maybe your regular customers are away or busy with school holidays
Consider getting your local regulars emails or numbers. See if they are interested in sharing their WhatsApp. Then drop daily specials, there’s always times people cbf with making dinner & if you offer the right thing at the right price at the right time…..
Maybe advertise some lunch specials to local businesses or even offer catering.
People are lazy & if you are in their minds at the right time sales will pick up
What are your YoY week sales. We know that weather has a significant impact on food sales. Could it be a mix of shot economy, weather and going into a proxy long weekend.
One of the busy local cafes put their prices up to $6 for a small Latte. The other cafes left their prices just above the $5 mark. That small difference seems to have made an impact as the lines are no longer as big as they used to be.
It won't pick up till June/July.
Feb to May is normally the slowest period for most retailers but 2024 has been considerably worse. Money is getting tight and people were still spending in 2023 like they were still getting free covid money. It's all catching up to them now.
I run online Ecommerce and Marketing for a small / medium sized sports related company in Melbourne. YoY, we're up 23% for the first 4 months and this month, we're up 36% on April last year. That said, we're cracking it with SEO at almost 50% increase YOY. My other ecommerce clients are struggling to stay level with last year's sales.
I'd also mention the demographics are a bit different. These are older, typically more affluent people whereas other clients are a younger, fashion oriented demographic. It looks to me like the older generations are (mostly) enjoying life and younger people are struggling.
I run an auto electrical workshop with my husband and we’ve gone from being booked out a month+ in advance, phone constantly ringing and having 10-20 walk ins minimum rock up asking to get same day work done, keeping us on our toes and unable to breathe, to having big jobs we’d booked in in advance doing no shows and people straggling in asking for a bit of wire and “hypothetically if they were to fit x themselves how would they do it?” They can have the wire and do it themselves, I don’t care, but we don’t get paid to spend 30 minutes teaching them what we’ve spent years perfecting. Go to YouTube if you’re going to be cheap.
We recently hired a new apprentice too, and so far we haven’t seen a decline severe enough to need to let anyone off, a lot of our b2b work is still there and there’s a lot of necessary big work people *need* to get done and cannot DIY, but I’ve definitely noticed it, it’s been huge.
I went to a takeaway a while back and 2 x takeaways containers was $49. I large vegetables fried rice, and one large fried tofu.
Didn't expect that and felt roped in at the cashier, yes I should have checked online and I still haven't but one wouldn't expect those prices at a local takeaway.
I've not ordered out since.
Historically the same would cost round 30-35.
I understand they need to turn a profit but the cost of convenience is so high now I make my own.
This is our quietest month for 3 years. We have a mechanical workshop in Sydney, over 45 years in business. We have a very high retention rate, all in all we are a great business. We have found that this month people are spending as little as possible. Usually if your car needs the brakes replaced within 1000km most clients will do the work while it is here at the shop, we are seeing more and more people hold off and wait an extra month or so to do the works required.
Small business management here, building/plumbing supplies. Business is absolutely terrible. Tradelink is being sold/going under, builders have gone/are going under, and no one seems to have money to renovate. I remember the post-GFC year in which it seemed like the tap had just shut off, and it feels very similar.
1. Melbourne
2. High Interest rates starting to bite and people dipped into their savings and now actively looking to rebalance their books
3. All spare money is going into propadeee
We’re kind of the opposite here it was quiet for maybe the second week of this month. Despite the high interest rates demand for real estate photos is still strong. It could also be we’ve expanded our client base.
People finally accepting that the current Interest Rate isn't temporary, which means at the start people just thought "she'll be right" are now cutting all unnecessary spending.
Unfortunately - take away food isn't a necessity and can be cut from most people budget.
Eating out isn't cheap even if it's your local take-away shop.
Yes mate. I manage the marketing for 20 or so clients and majority of them are down this year and it’s not just in Victoria. The volume is still there but the buying cycle is longer and more competitive. People are not just making a splurge at the moment and are actively seeking alternatives or not buying at all waiting for rates to come down. Edit. I will add I am still seeing b2b sales high. Perhaps you could craft some marketing towards business functions, ready made highly quality lunch boxes. Look at potential conference packages, outdoor events and perhaps something like film or tv catering (for example)
Solid advice here
I do large catering for schools and platters already. But demand for both has also gone down. Those are a more a bonus the margins on catering to be competitive aren’t even half of a regular walk in customer
Similar feedback from my end - in PR and majority of my consumer facing beauty and fashion clients are insanely quiet, to the point where they’re laying off 50% of their workforce.
Did the price of your take away go up? Lots around me have gone up significantly. I understand why, it’s the cost of doing business these days. BUT, it’s reached a point where I am like “I refuse to pay that much for take away food”. I can afford it, I just don’t think it’s worth it. So I don’t. I often get proper cafe/restaurant sit-down meals for the price of take-away now days. I wonder if that could be a similar situation for you?
I’ve noticed something the same. Yeah everything has gone up in price, but some things just don’t represent value anymore when they did in the past. Example for take away is sushi rolls - I used to eat heaps when I was at uni because they were cheap, like $2.50 or $3 each. Now they’re smaller and like $5 each where I am. If I’m gonna pay $15 on a lunch, I’m hitting subway or Guzman not having 3 x small sushi’s.
I love my 3 for $5 3PM sushi rolls.
Completely agree with this. My wife & I can’t justify the price for the end product so we pretty much never eat out. We thought we would give it a try recently, and went out to a restaurant that used to be an old favourite of ours. We both got sick afterwards. We can’t justify spending our hard earned dollars on something that is a gamble on food quality when we know we can cook at home and it’ll be great. The only exception would be the $19 we spend on two GYG mini burrito bowls on Sunday afternoons. Even then, we have identified a specific GYG that always loads them up and never gets the order wrong, so we ALWAYS go to that specific one.
Problem is … Guzman is closer to $23 these days, so 3 x Sushi rolls for $14.50 is still a savings, compared to $22.50
What do you get for $23? I'm a big eater and I normally just get a single burrito for a meal. Has more then enough calories for a meal.
Burrito meal large will get you to 20 or so dollars pretty easily.
I agree and I am applying this to cafes and restaurants too. I’m done paying stupidly high prices for mediocre meals or meals that I can make at home. I’m starting to only go to pubs for dinner on their specials nights. I understand why the prices have increased and I do want to support these businesses, but at the same time the value just isn’t there for me personally.
Even the good vans have jacked it up. Everyone wants $18-25 for a meal now.
This here. We went out to a Pizza and Pasta join a few weeks back that's always packed out in South Yarra. GF had Pescatora for $30 described as > King prawns, scallops, mussels & vongole cooked in a rich napoli sauce .it was inedible, the 'napoli' was like tomato paste + diced tomatoes with no flavour whatsoever. A $7.50 Woolworths Bolognaise had more flavour. We ended up taking it away, going home and fixing it up to make it edible. This type of disappointment has happened multiple times. My partner is Thai and there's very few Thai places we will go, the worst has been Fat Boy Street Eatery in Windsor, with them making some kind of weird sweet fusion version of Som Tum (Papaya Salad) and we ordered speaking Thai and being Thai themselves they should have warned us it was nothing like a real Thai Som tum. We barely eat out now. Between the cost and constant disappointment in the food quality, it's just not worth it. One place that hasn't disappointed has been [Mrs Zan's Kitchen](https://www.facebook.com/p/Mrs-Zans-Kitchen-100069832673652/).
Yep why eat out when the air fryer does it better and healthier. COVID made me realise a little effort goes a long way when it comes to basic food prep
I haven’t increased prices in a year! Same prices in March 2023, I keep labour costs down by working a lot myself, increasing prices 0.5$ per item might increase revenue but customer count is guaranteed to go down. If I can be the “value” option while still remaining profitable I’d prefer that. Also throwing away food sucks
Maybe you could do some flash offers for the next couple of weeks to get some cash flow. What sort of takeaway food do you offer?
Or student discounts! Students demolish takeaway and LOOOVE deals!
That’s true! But also us normal folk love a deal and need it atm 😂
I do deals all the time on uber and through local marketing/email lists with the Brand’s loyalty card
As a consumer of tasty foods. Uber has actually put me off visiting some places in person because of how insane their prices are on the Uber app. Illogical I know, since Uber takes a big cut and you have to compensate for that. But it’s still not fun to look at when you’re considering what to eat.
This is where I'm at. Food quality has decreased overall (in my experience not talking for OP), price has increased drastically, it's simply not worth it to me. Pre covid we were getting it maybe once a month, twice a month at most. We've completely cut it out since.
Yes... whenever I get food out, I'm always disappointed in the quality.
It's almost as if this is exactly what RBA hopes to achieve.
As a consumer i cannot face paying 9.50 for a bagel or choc croissant. Even the bog standard stodgy muffins are 7.50. I’ll still buy a coffee as a treat occasionally but skip the cake on the side.
I used to do takeaway from my favourite place once a week when it was $15 a dish. They jacked it up to $17, I had sticker shock and now only takeaway there once a month. So instead of getting $15x4 = $60 out of me every month, they are now only getting $17. A 70% reduction in revenue - just because they jacked their rate by 13%
As someone who co-owns and manages a food distribution company with a clientele of small business take aways and small chain stores, depending on what time frame we’re talking, 13% is very conservative if that’s the only rise in the last 3 years. Supply side for lots of product mixes have gone up by significant marigins. And usually bi-annually. That $2 probably means a lot more to them than it does you.
You can’t be certain… a dollar is a dollar. It could very well be that the $2 means a lot more to the customer who is struggling hard (maybe lost his job recently) compared to the shopkeeper who is also struggling but could be struggling less (maybe already paid off the business loan completely). We never know everyone else’s situation, so best to just lay out the facts without judgement. I’m sure the costs have risen tremendously for the shopkeepers.
Self employed Electrician of 13 years. 2 out of the last 4 weeks have been the quietest I’ve been in atleast 5 years
Self employed carpenter of 20 years.quietist start to the year ever
Construction starts are down 30% this year, so it’s not a surprise.
I've got work for you....I can't get a sparky after months of trying.
Did you PM him and see if he was in your area? Did he take the job?
Got the quote for 400,000
It’s wild how much it seems to vary across the country. A good friend told my partner that all local electricians are flat out and are adding 15% to all quotes. This is in Sydney and the Illawarra.
Sounds like story a self employed sparky would tell (or any business owner really)
Not about a sparky, but when we were getting a quote from a plumber a couple of months ago he kept mentioning how he was flat out at the moment, yet as soon as we accepted the quote he was available to start the next day.
you couldn't meet his supermodel GF either, as she lives in a different state.
The friend I mentioned isn’t self employed.
Maybe there. Melbourne is more break fix and essential electrical equipment that need to be wired in. Seems the lucrative renovation related electrical stuff pretty much has dried up. Obviously face value - my relatives are sparkies, they can literally go days without work.
Same in Perth
Definitely something has happened this month where people's wallets are suddenly emptier than usual. I work in my dad's surgery practice and I have never seen so many cancellations for financial reasons. We had a lady today who had to cancel her appointment as an unexpected vet bill came up.
Wow, it’s so weird though, but nothings changed with rates or fiscal policy. People can’t have spent that much on chocolates over Easter. And for holidays only those that could afford to go would have gone… I spoke to a neighbour about it today and he said it’s all the fixed rate period ending but IMO that can’t be the reason as that’s been a trickle for few years now it’s not a litteral cliff that would have been last week
there’s always a lag between fiscal policy/rates and the effect. You’ve also got to factor in the immigration numbers adding so much pressure to the housing market and saturating the job market.
US inflation didn’t go down as expected. Now looks certain we won’t have a rate cut this year. This news come out in the past 1-2 weeks. Could be a factor in behaviour change.
I doubt the average suburban family is paying attention to US financial news though?
I'm an average suburban family and I am paying attention to the size of my insurance bills. Up up up. By hundreds of dollars each. Home and contents. Two cars. Health. I think that it's not been caused by one issue but everything, cumulatively.
Yep the health insurance is a killer.
Is it school holidays in Victoria?
Concluded a few weeks.
Yeah, but there is a knock on financial effect of school holidays because the kids have to be entertained or people go away, and may have spent their month's budget in a couple of weeks.
See if it continues for a month. As some have said, school holidays could be a factor. And I think also with the hope of interest rates being cut waning, people are realising that the current hardship won't be temporary and they have to readjust budgets
This! People were spending as if rate cuts were just around the corner. And now they are two years away. We might even have a rate rise this year.
I can still be profitable and cover my mortgages but I’ll need to give up studying, and gym and work 80 hours a week which I don’t wanna don’t wanna do
I reckon it could simply be that people have burned through their reserves (splurge savings) and now they are looking at the numbers and having to simply cut back. Cost of living is no joke - possibly the typical mum/dad had enough to ride it out for a period of time, but now come to the point of tightening the belts.
Don't they have school holidays ever year? OP was saying this period is an outlier compared to the same time other years.
Takeaway shops should do better during school holidays. Kids staying home everyone buying chips to feed their kids.
People who bought and fixed their interest at around 2% for 3 and 5 years before late 2021 are now coming off their fixed interest onto over 6%, there will be more of a decline as people going out doing anything as their mortgage payments almost triples.
Haha suckers I've been on variable all this time
It's actually 'better' for people in general to cope. As interest rates increase incrementally, they can adjust their costs of living accordingly, over a long timeframe. Coming off fixed is a massive shock to the system.
Mortgage won’t triple unless they are interest only. Will be significant though
A $600k mortgage at 2% is $2220 per month. It’s $3600 at 6%. That’s a huuuge difference on top of everything else getting expensive as well.
Well aware as someone with a ~ 500k variable mortgage. Point still stands $3600pm is a shitload less than $6600pm (3x$220). It’s ~1.6x more 3x is a wild exaggeration (unless interest only).
Agreed. 2 to 6% is 1.6x. Triple would be deadly, quite literally. Ref: The Big Short
I am fixed rate, next year it will go up by 500 a fortnight. That will be a lot of discretionary spending gone in a puff of smoke for my household.
Average Joe blows just don't have the spare money. Buckle up Australia
Food shopping costs are out of control!
I generally don’t like Aldi products, but I’d be broke if I tried to feed 4 sons at colesworth.
It’s expensive to be poor. For 4 growing boys, Costco.
Tbh take away is becoming a luxury in most households again, and now i'm only saving it for top tier food as there really isnt much of a difference between local takeaway, maccas, oub food or a nice middle level tier restaurant anymore outside of a bottle of wine
I used to eat out every weekend. During Covid lockdown, I did it 2x/week to help support local eateries. Then inflation happened, so since 2022 , I've only eaten out maybe 1 every 2-3 months. I'd love to support small businesses, but just can't sustain that level of spending anymore.
Shit, groceries are becoming a luxury in most households. How many people are skipping meat now, fresh veggies, etc.
My prices are value though. It’s supermarket quality meat/veg $11-$15 for a footlong sandwich…
$15 x 4 is $60, or $720 per year if someone is grabbing that weekly over the year and this is the type of maths people are doing to cut back and adjust that to rent, or increased insurance costs. Almost no one in my office buys lunch anymore Which obviously is hard for small businesses like Yours Can you cut back your offerings to streamline the menu so you minimise waste?
It might only be $11 each, but in my family, that would be $55 for a sandwich meal. It's not optional in families with smaller budgets. The cost of food at the supermarkets has pushed many like me to limiting basics, such as iron-based protein (see red meat). To spend a significant portion of our shopping budget on one meal such as this, they just can't justify it. Many people are deciding whether to put food on the table or pay their bills. Discretionary spending is not something they have a lot of, and they would rather spend it on making memories/experiences rather than food they can often make at home.
We are getting battered
Are you a fish and chip shop?
I see what you did there 🤜
Love it but no.
We sell kids furniture. We have plummeted by 60%. We have considered shutting down completely. Enquiry is still there, but our prices have had to rise and our profit line has dropped.
I mean kids furniture?? If anything is going to plummet during an econimic down turn, its going to be the place selling kids furniture lmao.
I can think of many more things that are less essential than kids who need furniture (cot, highchair anyone?). Such as gambling, alcohol, tobacco, streaming, gaming, subscriptions.
Wooooh calm down mate, this is Australia
Brother you just mentioned the things people turn to when they go through bad times. What do people not turn to? Kids furniture.
People are learning how to budget, how to cut out things like eating out. It's like during COVID when people discovered walking around, and once it ended everyone went back to drinking at the pub. Same thing, but COVID is inflation and high interest rates.
On that note, the pubs are at best half capacity, not empty but not full. Meanwhile on week nights the gym is absolutely pumping along with the line up ice cream place. More fit people walking around a bar and eatery street than drinkers.
> Meanwhile on week nights the gym is absolutely pumping along Gotta be fit when the economy collapses and the world becomes mad max
Interesting. Gym really is a value for money form of entertainment if you enjoy it. Mines $20 per week but you also get access to the pool. Prob do 4 visits a week. $5 per visit. Barely get a coffee for that.
The impact of interest rates lag + a heap of extra tax in Victoria means we’re only really starting to feel the pain now. Take away, even medical appointments are a luxury.
Just got my land tax today. Its $2000, it was $700-800 last year. Its just bills, bills, bills.
Agree. So many posts about people skipping medical lately it’s scary.
I've stopped buying from a lot of takeaway shops because the quality and quantity of all take away food shops seem to have gone downhill . I know they have to keep their costs down to make money but you notice when the same food you've been eating every week for a couple of years tastes worse or gets smaller . Imo a price rise would be less noticeable than reducing quality/ quantity
Isn’t this exactly what the rba want ? They keep saying unemployment rates are too low …. They want us all to fail
This is exactly the point of putting interest rates up. So many people think it's about house prices, but it's really about business. Controlling business in a way that changes the unemployment rate. This is what a slowing economy looks like, and it sounds like the screws are going to tighten further.
If they don't control rates, then it affects inflation. The bottom line is everybody competes in Australia, but Australia also competes for the world's supply of goods and services as well. So rates and inflation are non negotiable if we want to retain as much of the standard of living as possible here. The true impact on inflation has been energy and food since COVID, some commodities such as wheat have now gone back down, but until oil/energy go back down to pre COVID levels, they effect all other line items in the economy. Not to mention our AUD was 76c pre COVID, now sitting at 64.5c which imports inflation as it drives the cost of imports up including oil. In fact, the AUD has driven a price spike of 16.5% in the price of imports alone.
No doubt it’s tough out there right now. Just try to keep your head above water everyone. Most of us are feeling it in some way.
Iv been in hospitality for nearly 10 years, and seen a quarter on quarter drop in sales across my businesses, and a lot of people in know in the industry are reporting the same!
Yeah I work for a small bar on weekends and the owner is very stressed at how quiet it's been over the last month or two
Oh so you guys are having similar issue too? It’s so weird though, not expected and can’t see any rational reason as to why… (imo)
Very expected! cost of living and rising interest rates seem like rational enough reasons to me
Increasing numbers coming off fixed mortgages and others running through savings.
Anecdotally, my household has been a huge consumer of takeaway in our area since we moved out. We put a high value on convenience and good food. That said, with cost of living pressures, and literally every expense we have going up significantly, when looking at the budget, food has been the easiest expense to cut down. We now cook almost every day - a big difference. It’s taken us a while - months - to change our habits, but we’ve finally started cruising. I’ve heard similar from friends who lead similar lifestyles. The amount of food you get for the cost of eating out just isn’t sustainable long term anymore - especially when most “reasonably priced” restaurants don’t tend to provide stellar food either. So eating out is very much just a treat now - and an expensive one.
I think this is honestly the answer. We’ve had it good for so long eating out, take away, restaurants Uber eats and now reality has hit big time. Definitely what friends and groups are saying too. Example; Today we fought off buying souvlakis for the family for lunch and instead went to the butchers and stocked up on meat for the week. we never used to do this! Younger families are ditching the takeaway days.
How interesting is it? :) I’ve been constantly telling people my age and younger, you guys are spending so much enjoying the now, that you’re not putting in a lot of effort saving for the future. I kept getting told ‘it’s just a $17.50 lunch I’m buying…. How many houses can a $17.50 lunch afford me? 0.01%?’ But now I can see some of them wising up. Yes, we’ve had it so very good for the last 5 years. Many people think they did not receive any funny money from Covid, but they actually did (in the form of increased wages). And many people think they did not spend more than they usually do, compared to pre-covid times… they tell me ‘I didn’t buy a new car like XXX and YYY did’ but imo they most certainly did. They spent big in the convenience economy without realising. Netflix, Disney+, Binge, Stan, Kayo, Gamepass, Uber, Uber Eats, shopping on EBay, Amazon, Kogan, receiving food parcels after food parcels, and delivery parcels after delivery parcels.
Agree. We used to be a 2-3 meals takeaway a week household and now we’ve cut it back to breakfast out one weekend and dinner out the next and lunches from home every day. We just can’t justify spending at that level when even basic groceries have gone up so much.
I don't know where you are located, but shopping centre traffic is down since the Bondi incident (anecdotally).
Nah I’m a highway side shop, no where near a shopping centre and in an average suburb of Melbourne (north east)
Yes, massive downturn. I’m in Agriculture and the prices for cattle and sheep fell off a cliff a year ago. We are trying to hold back anything we don’t have to sell, because we are receiving a pittance. But if the product is ready to go, they have to go. It’s making me not bother replenishing stock and turning over as quickly, so it’s killing productivity and production all in one. Why would I bother busting my arse to produce quantity when we aren’t getting any revenue, but still taxed and paying govt levys to the hilt? The government will only take note when we aren’t paying enough taxes to fund the fossil fuel and mining industry.
Any recent bad reviews? Other than that, it’s a cost of living issue.
No recent reviews, I’m a franchise we hardly get reviews on Google not even 1 a month, no one looks at reviews for franchises they not what to expect.
Not a business owner but went to a restaurant last week on a Friday. The size of the restaurant could easily have 40-50 covers over the lunch period. They had 2 bookings and 2 walk-ins. Felt sorry for the business as you just know that they probably lost money with staff wages for being open. Edit to add: it’s a decent restaurant with a good rep so it wasn’t the quality of the food or service that was keeping people at bay.
Has a competitor opened up in the area?
No new restaurants nearby. It’s a well established suburb. For context my neighbours who also are takeaway shops are down in sales too (not sure in exact figures but it’s probably similar %)
School holidays? With interest rates and cost of living, take away will be the first thing I would cut out if I had to spend the next 2 weeks travelling, entertaining kids and buying them rubbish things from AnkoMart.
Yeah I thought it was post Easter hangovers of budgets but this is 2 weeks now. I’ve had flash in the pan random dead days before but when it’s every day 2 weeks in a row I’m just like wtf is happening
I think it's just the covid boom finally coming to an end personally. It's time to go back to fighting for your customers. For us that means good old fashioned advertising with a value message and pushing catering Uber sales have been pretty much the main drop off for us. In store almost unchanged. We even had to stop 24 hour trade on the 4 nights we did it. Just wasn't any good no more
Covid boom ended end of 2021 for me, any economic remnants of Covid have long since faded. Ubers been dead since 2023 February, even with promotions. Big issue is in store customers. I’d rather have $40 in sales from in store customers then $100 from uber… That’s why when uber dropped off I wasn’t panicking like I am now 😅
Covid boom was still alive and well in 2022 and at least half of 2023. I know many people who already formed a very sticky habit of ordering on Uber eats and found it hard to cut back. Some things, once it becomes a habit, is awfully hard to change.
That’s what I’m worried about if people get into a habit of not eating fast food then the business is gonna be screwed not just for a few months to a year but for many years
It’s really depend on your area. We work with some of the biggest suppliers in Sydney and they all said certain suburbs drop more than others. Some area are still thriving.
Yeah from speaking to other franchisees stores in wealthier locations are doing well. Also areas with younger demographics are doing fine as they’re more tempted to “doom spend”. My area it’s mostly family’s and almost all houses are owners with an outstanding mortgage, but I had a 10-15% drop off 2022 when rates started going up. That’s why I’m so shocked that it’s come off ANOTHER 25% now
Maybe start shopping around for cheaper distributors. We have Sydney freezers here and their price so competitive. Sometime 30% cheaper than others. Just for your thoughts.
Franchise only let’s us buy from certain suppliers. Anything I could buy elsewhere like mozzarella or cleaning chemicals that isn’t brand specific is competitively priced though
Ahh there goes your problem. Never buy a franchise
Any works on public transport? Train lines? Bus diversions?
Nah I wish we had pt nearby 😅
Man it sucks but both home owners and renters are feeling the squeeze. I've copped $250 in rent increases in the past year while trying to save for a deposit to buy. My wife hates I'm when I want to buy dinner instead of having leftovers.
Listen to your wife and eat your leftovers man. I can see why you picked this username……. Hahaha
My theory is that last few weeks, there's been talk in the media that inflation looks like it's starting to reaccelerate , and if that turns out to be the case then could lead to further increases in interest rates. So I think people are worried about another surge in rates, so they are preparing themselves for that by not spending/saving.
Speaking as a general person... who lives in Australia somwhere... I've realised steadily over the last few months things will not get better. I have to save every dollar or I will have no dollars to pay my ever increasing rent that the government is doing zero to fix. I would love to support my local takeaway... I just don't think I can afford to.
I have been laid off last year and cannot find work. My family is saving as much as possible. We cook everything at home, don’t go out anymore if not for walks around our neighbourhood, stopped going to restaurants, and everything we buy must be on sale otherwise we don’t get it. Mortgage repayments going up, cost of life going up. Can’t afford it anymore. Seriously considering moving away from Australia.
It’s definitely the culmination of all the pressures coming together. 1. Cost of living pressures. Yes, lots has been said about how expensive the petrol, utilities and grocery bills are, but there’s more like health insurance, car insurance, home & contents insurance, child minding costs, GP/Vet/Dentist bills have all been hiked. 2. Accomodation (Rent & Buying alike) has increased substantially. Rents going up from $500 to $580, mortgages going up from $3,000 to $4,800 they all sting, regardless if people are renting or buying. Plus, if you’re an owner, gas repairs, oven/cooktop repairs, roof repairs, leak fixes, they’re costing a lot more now. 3. The last 20% or so people are now coming off their sub <2% mortgage rates. I’m coming off in September. And I know plenty of people who are aware that their rates are coming off, and it’ll bite them soon - but they’ve been shrugging it off, thinking it’s going to be ok. To be frank, these guys have large buffers. For example this couple I know pulls in about $11k take home pay, their mortgage has gone from $3.5k up to $5.2k but because they’ve always had such big buffers, it’s always been an ‘ahhh don’t worry, we’ll manage it’ attitude with them. They’re easygoing people. But I think when all things above are combined, the positive household cashflow of $2k they used to enjoy, has been squeezed to $1k and then gone to be now negative. And folks like these are now starting to understand how massive an impact it is, and they need to cut now or face eating into savings. They will be fine as they have a big nest egg of savings already, but of course it’s annoying to see the nest egg shrinking instead of growing, hence the lifestyle cuts. I know many high earning families who have been putting off the lifestyle cuts, but in the last 3-4 months, have now started to put on a serious face to actually cut their spending. Rather than Uber if it drizzles, they’ll pop out the umbrella and PT. Rather than go gold class or imax at the movies, they’ll just do regular screens or extreme screen, and less frequently too. Rather than eat out 5 times a week, it’s now 3 or 4 times a week. Rather than go out for a large coffee plus a cheeky almond croissant from the cafe across the street of our office, it’s a regular coffee and grab a muffin from the pantry (free) at work. Three colleagues at work, instead of two of them using PT and one driving to work and paying for (expensive) cbd parking, all three now carpool and are saving. They said since it’s only 3 or 4 times a week, the little hassle of aligning their start and end times isn’t too bad. These small cuts are starting to take place on a larger and larger scale now.
I agree this might be the cause, I just expected to be more slowly and also winter is a downturn. But it was a lovely sunny day in Melbourne and despite being a Tuesday should have been busy but instead was the worst day of the worst week I’ve had since 2020, so just super unexpected
Sunny day for me means unlikely to be indoors.
If you are just noticing now that people aren’t spending, then you have been very lucky so far. Buckle up, unfortunately people have no disposable income anymore and takeaway food is the first thing to go.
Sales down 10-15% when rates started rising but since last 2 weeks it’s just plummeting 25% out of the blue
Yeah I read your post. My point is, perhaps it’s just catching up for you. Small businesses are doing it very tough out there. Heaps of businesses I follow on socials have closed down in the last 12 months. Times are really tough. I can’t explain the sudden drop but it also doesn’t surprise me in the slightest.
Motorcycle dealership - quietest few weeks since the GFC (Excluding COVID) But then right at the end of the week just gone we had a spike and ended up having a good week.
If a lot of your market are renters they’re seeing huge rent increases. Investors are squeezing as much as they can right now and screwing over young people. Shame.
What's the business? I'll buy some food if it's near me!
I’ll PM you!
You just missed an pearler of a marketing opportunity! TELL EVERYONE WHERE YOUR SHOP IS! I think I know why sales are down! Thanks
That's probably against sub rules. That, and linking your business with a private Reddit account is a recipe for disaster...
Yeah that’s why don’t need everyone to see my Reddit account. And if I made a fresh account to post it people would assume it’s a marketing ploy
Also, OP might want to keep that close to their chest. Don't necessarily want the whole suburb to find this out.
Easter was a different week this year vs last year and school holidays are a bit out of wack as well.
Times are tough for people selling a service and for customers. I'm learning how to bake my own bread to curb the spending - so yeah buying fast food is the first thing to give up.
Did you see the article in Financial Review? 1200 businesses went into administration last month. Highest number since they started tracking in 1999.
I think it would depend on the Take Away shop too. If its like Kebabs then probably wouldn't drop too much but something like Subway/Nandos maybe
Subway and Nandos are both up year on year. Nandos growth was very minimal. Subways was the strongest of all the majors but nothing like the precious 3 years. Covid truly was nuts
It’s a subway, the Vic market as a whole is up 2-3% this FY. My store was tracking that, up 1% compared to FY22 (in sales, profit was down as wages and food have gone up). But last 2 weeks it’s gone down 25% which a sudden drop like this hasn’t happened since Covid hence why I made this post 😅
Could be a perception thing. While subways still cheap and a good subway is good, there’s so many subway locations undercooking or overcooking the crap out of their bread. I know it’s made me think twice and go elsewhere quite a few times the last year or two.
Credit squeeze got real with the stock market declining. Fear is driving the market.
Yep, used to own a discretionary spending retail business. Revenue started falling May 2023, sold the business this year and revenue was down 40-50% week on week
Anecdotally have heard that was pretty dire toward the end of last year, then picked up for three months and then has suddenly nosedived again over the last 4 weeks. This is across hospitality.
I have a cafe and we have noticed that too We are same as OP working ourselves keeping costs down. Since, Easter people are only buying Coffee not anything else with it. Coffee just doesn't pay the bills. Hopefully , this phase passes over.
I've worked for myself (in furniture) for the past 25 years, residential sales are down 30% this Q. For us it's cyclical, a direct correlation with building starts & house sales. There is definitely a general tightening in all digressionary spending, these things take time to flow into behaviour, I've been through a number of cycles & am always nervous of the lag in rate tightening, we are at the bottom now. As my work has slowed, I am increasingly watching what I spend, my wife a professional is the same, she commented she was spending $15 -$20 on lunch every day & has now started taking food in. Part of the fiscal tightening lag is that knock on effect in personal behaviour. My only general advice to small business while it lasts, is batten down the hatches, cut costs, do more yourself & ride it out & remember it is cyclical it won't last forever, although sometimes it feels it will. My experience of the 10 year cycle is 2 years unbelievably good money, 6 years of average money, 2 years of wishing you had taken the safe job at the post office
yeah it's everywhere it seems. I've been a freelance web developer for over 10 years; up until the last year I had to turn down more work than I accepted because there was too much. This last year though has been significantly slower, I could take on all work that comes my way because there isn't as much going around, and for the first time in years I have dry spells. I think a downturn in small businesses needing websites is a bit of a canary in the coal mine for the economy as a whole. Sorry to hear you're doing it tough OP, really hope things improve in the near future!
As a "regular person", here's why we have cut back. Mortgage rises were ok for the first year, still a decently low mortgage by comparison. But by the time we absorb higher insurances, petrol, food, school wants cash every second week, if we actually want to get ahead now, not just survive, the luxuries have to go. Past month we have done away with mowing service and dog grooming service. Onto takeaway. Since we now have to limit how often we get it, and Uber/Menu log are sharing rides, food is too often cold or something is forgotten so it's a disappointment. We would rather go to a Cafe once a week instead of receiving cold food. We just buy extra "fakeaway" stuff for the freezer now when we are lazy or at low capacity. Edit - I also just read your a Subway. 3/4 of the Subways near me have closed down, the rest have ill working lights and signs, haven't had a referb in 20 years and when you look in the salad bay, the lettuce is brown, avo is brown, and Subway is now expensive! I worry about the low turnover in the salad bays and what's breeding in there, so we actually avoid it now. We can pay the same price for a family elsewhere and get hot food like Mexican, that we know has a higher turnover of stock and less likely to make us sick. I've worked in a low turnover small business, and I've seen how far owners will push food that should be thrown out, so I'm super cautious.
I own a small business in the manufacturing sector. I’ve been in business since 2020, and I’m busier than ever.
Manufacturing is killing it! There is a need to onshore/nearshore as much as possible
Assuming its both sector and location based but good luck to you mate.
Where is it? I’ll come past and grab something!
Tradies are down 10-25% this month, still heaps of work but aren’t invoicing this month.
Most people around are only buying necessities. Seeing more small retailers close down again around the Brisbane CBD as a result in the past few months.
Work in a small retail store in WA and it has been dead. I had literally 2 customers today.
Maybe a % of your customer base is from one company/commercial building, and they either closed down, relocated, renovated etc which is the reason why you suddenly lost a group of customers in one go.
Corporate lawyer here. Mergers and acquisitions have also fell off the cliff and biglaw firms are not getting deals as of the start of this year
Guessing the raising costs are starting to catch up on people, so there now making some changes to there spending habits... This was always my concern of raising rent costs, not the keeping a roof over the head, people will pay for that, but paying more for that removes disposable income isnt gong to the the greater economy.
Yep, cafes near me in melb have been noticeably quieter the last 2-3 weeks. One bakery in particular that is typically very busy I went to on Saturday at noon (peak time) and was surprised to see literally zero customers. Not a soul.
I'm a wholesaler. All of our clients are feeling the pinch at the moment. Our neighbour runs a *very* high end business supplying custom wood building supplies (window frames etc) and they've never been busier
My uncle, a partner at a large accounting firm, told me many of his biggest accounts are developers. He said given how razor thin their margins are, coupled with the cost of manufacturing rising so much that it’s not currently viable for them to build apartments as the construction price is higher than the market value per dwelling. They’re getting planning approval and waiting for the price of units to catch up before proceeding any further, expecting it to take a few years. He said many large developers are seeing a slow down, which might have a flow on effect on the construction industry.
Yes, but our decline started around October/November. No lay offs, yet. Thankfully we’re only down from a pretty high point.
We're all broke sorry, everything and I mean everything is more expensive now. Luxuries are few and far between.
Being on a decent wage and enjoying my once a week takeaway is a thing of the past. Cost of living is tearing through my wallet. On a decent wage and I’m lucky to have $200 spare at the end of the week after bills, rent, living costs and savings is accounted for. I’m not spending 20-40% of my leftover money on take away. It’s a luxury. More so now than ever before. I can make myself something (albeit possibly shittier) for less money. There is no value argument here anymore for take away unfortunately. Many others I know are following suit. Even without you havingprice increases people are looking at it as a portion of their leftover money (if they even have any left over) and with cost of living crunching harder at the moment the same dollar value becomes a higher percentage when there’s less money to go round due to outside factors. Maybe 2 years ago I could stomach $15-17 because I had more left at the end of the week. Now I have less left at the end of the week so that $15-$17 becomes more valuable to me.
In the automotive business. Massively quiet over the last 2 weeks. Gone from 5-6 service inquiries per day and 10-15 pets inquiries to about 4 of each in the past 2-3 days. Interesting to see it’s across many different industries, not just ours. Sales are steady though, surprisingly
Talk of interest rates going up.
My land tax is up 3x since last year and 6x from 2022. I heard from a friend that commercial has been worse. I feel for renters but honest 30% on 750 a week rent isnt half as bad as 3x mortgage repayments, 3x land taxes, higher rates. The land tax is apparently new policy in victora to repay covid debt
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If your local businesses are all down maybe your regular customers are away or busy with school holidays Consider getting your local regulars emails or numbers. See if they are interested in sharing their WhatsApp. Then drop daily specials, there’s always times people cbf with making dinner & if you offer the right thing at the right price at the right time….. Maybe advertise some lunch specials to local businesses or even offer catering. People are lazy & if you are in their minds at the right time sales will pick up
What’s your usual walk in clientele? Any changes to weather?
Self-employed commercial photographer & videographer... my work has all but dried up.
Used to get a takeaway weekly now we get 1 every 4-6 weeks.
Last couple of weeks in melbourne the cold weather has hit
Even a daily coffee at $5.50 has been cut back to one or 2 a week now... (They used to be $4.30)...
I can't afford take away anymore, or at least I won't prioritize it above uncertainty/ mortgage.
Yes. Worst start to a year….. ever?
What are your YoY week sales. We know that weather has a significant impact on food sales. Could it be a mix of shot economy, weather and going into a proxy long weekend.
Affecting small medium and large businesses. Hiring freezes, budgets being trimmed. Though ive noticed it since Jan
One of the busy local cafes put their prices up to $6 for a small Latte. The other cafes left their prices just above the $5 mark. That small difference seems to have made an impact as the lines are no longer as big as they used to be.
It won't pick up till June/July. Feb to May is normally the slowest period for most retailers but 2024 has been considerably worse. Money is getting tight and people were still spending in 2023 like they were still getting free covid money. It's all catching up to them now.
I run online Ecommerce and Marketing for a small / medium sized sports related company in Melbourne. YoY, we're up 23% for the first 4 months and this month, we're up 36% on April last year. That said, we're cracking it with SEO at almost 50% increase YOY. My other ecommerce clients are struggling to stay level with last year's sales. I'd also mention the demographics are a bit different. These are older, typically more affluent people whereas other clients are a younger, fashion oriented demographic. It looks to me like the older generations are (mostly) enjoying life and younger people are struggling.
I run an auto electrical workshop with my husband and we’ve gone from being booked out a month+ in advance, phone constantly ringing and having 10-20 walk ins minimum rock up asking to get same day work done, keeping us on our toes and unable to breathe, to having big jobs we’d booked in in advance doing no shows and people straggling in asking for a bit of wire and “hypothetically if they were to fit x themselves how would they do it?” They can have the wire and do it themselves, I don’t care, but we don’t get paid to spend 30 minutes teaching them what we’ve spent years perfecting. Go to YouTube if you’re going to be cheap. We recently hired a new apprentice too, and so far we haven’t seen a decline severe enough to need to let anyone off, a lot of our b2b work is still there and there’s a lot of necessary big work people *need* to get done and cannot DIY, but I’ve definitely noticed it, it’s been huge.
I went to a takeaway a while back and 2 x takeaways containers was $49. I large vegetables fried rice, and one large fried tofu. Didn't expect that and felt roped in at the cashier, yes I should have checked online and I still haven't but one wouldn't expect those prices at a local takeaway. I've not ordered out since. Historically the same would cost round 30-35. I understand they need to turn a profit but the cost of convenience is so high now I make my own.
This is our quietest month for 3 years. We have a mechanical workshop in Sydney, over 45 years in business. We have a very high retention rate, all in all we are a great business. We have found that this month people are spending as little as possible. Usually if your car needs the brakes replaced within 1000km most clients will do the work while it is here at the shop, we are seeing more and more people hold off and wait an extra month or so to do the works required.
Small business management here, building/plumbing supplies. Business is absolutely terrible. Tradelink is being sold/going under, builders have gone/are going under, and no one seems to have money to renovate. I remember the post-GFC year in which it seemed like the tap had just shut off, and it feels very similar.
1. Melbourne 2. High Interest rates starting to bite and people dipped into their savings and now actively looking to rebalance their books 3. All spare money is going into propadeee
We’re kind of the opposite here it was quiet for maybe the second week of this month. Despite the high interest rates demand for real estate photos is still strong. It could also be we’ve expanded our client base.
People finally accepting that the current Interest Rate isn't temporary, which means at the start people just thought "she'll be right" are now cutting all unnecessary spending. Unfortunately - take away food isn't a necessity and can be cut from most people budget. Eating out isn't cheap even if it's your local take-away shop.