Hospitality sector shows resilience with 7% sales growth
Quantaco has released its Hospitality Industry Update for the Q1 period, covering July to September 2024, revealing continued resilience in the sector amidst cost of living challenges.
The report from Quantaco indicates that the hospitality industry has witnessed a 7% increase in weekly sales, rising from AUD $153,000 in Q1 2024 to AUD $163,000 in Q1 2025. This growth suggests an additional AUD $10,000 in weekly revenue. Specific months like July and September demonstrated particularly strong performance, compared to August.
While both food and beverage sales showed growth, beverages led the way with a 4% increase, rising from AUD $49,000 to AUD $51,000 year-on-year. September exhibited a notable improvement with a 6% year-on-year surge in beverage sales. Meanwhile, food sales increased from AUD $38,000 to AUD $39,000, marking a 3% year-over-year growth, though this was relatively slower than in previous quarters. The report notes that September was crucial in boosting food and beverage sales for the quarter.
Conversely, bottle shops experienced a downturn, recording a 15% decrease in sales compared to the previous year. Gaming operations continue to be a major revenue contributor, with pokie machine turnover in Australian pubs increasing by 12.9%, up from AUD $782,000 to AUD $883,000 weekly.
In terms of operational efficiencies, venues have succeeded in controlling labour costs, with wages as a percentage of sales showing minimal movement. This indicates that operators are managing labour effectively amid fluctuating revenues. However, costs in other areas have seen a rise. Utility expenses surged by 17%, primarily due to a 24% hike in electricity costs. Marketing expenditure also saw a significant jump of 44%, reflecting an increased effort by operators to attract customers in a competitive environment.
Overall, EBITDAR witnessed a mere 1% improvement year-on-year. The report suggests that the increasing costs of goods and utilisation of discounting to spur sales are squeezing profit margins, which could explain the limited improvement in profitability despite higher sales figures.
Quantaco's report provides key insights into the macroeconomic conditions impacting the hospitality industry each quarter. It underscores the necessity for industry operators to possess comprehensive data and insights to inform their decision-making processes.
Recently, Quantaco introduced "Q Insights," a new platform designed to assist hospitality venue owners and managers by moving beyond traditional profit and loss reporting. The platform offers dynamic, real-time financial analytics, allowing businesses to discern current sales and cost trends with greater transparency and foresight. This technology aims to equip venues across Australia with the data-driven insights needed to adapt to an environment heavily influenced by cost of living concerns.
