The state of the cafe industry

The State of the Cafe Industry

There are 6,701 cafes right now in Australia, helping to contribute toward $4.4bn in revenue. 35% of cafes are in NSW and 28% in VIC and the industry is in its growth stage.

What Does that All Mean?

Basically it is saying that the industry as a whole is in a pretty healthy place right now. Though many cafes do go out of business, the ones that survive are growing stronger and stronger as the Australian public feed their appetite for cafes in everyday life.

Household Income and Cafes

Real household discretionary income is the main determining factor of the overall health, as cafes are considered generally as not being a ‘need’, but more of a luxury. Hence, a drop in household income would see a decline in café revenues. Conversely, as is currently the case, Australians are becoming more wealthy and cafes are right in the path to benefit. Watching the basic economic indicators in house hold income is important as a cafe owner who knows the importance of forcasting into the future. 

It’s really easy to, you can simply google ‘household incomes australia this year, month, quarter’ and watch it every now and then.

Who are the Big Guys?

Well to be honest…no-one! One company does not dominate the Australian café industry, which is quite rare. Companies like Gloria Jeans, Michelle’s Patisserie and other chains have found it hard to establish a foothold, owing to the strong quality focus of many independent cafes and the market demand for that quality.

This is a fantastic opportunity for small cafes to flourish in their localised markets, have a strong carved out brand and consumer stickiness, which also means strong sticky revenue opposed to loosing customers to competitors.

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