The Restaurant Association’s latest Hospitality Dashboard for the second quarter of 2024 highlighted a worrying increase in negative mental health among its surveyed members. According to the report, 54% of respondents reported experiencing poor mental health, up from the previous quarter’s figure of 42%.
This concerning trend emphasizes the ongoing stresses faced by businesses in the hospitality sector. 76% of the members indicated that their profitability has declined compared to the previous year. The report said inflation and rising operational costs are negatively impacting profitability, even though revenue has risen during the same period.
Annual sales revenue increased by 5.8% to reach $15.7 billion for the year ending March 2024, in comparison to the previous year’s figures.
“However, these gains are overshadowed by the industry’s ongoing difficulties, particularly in Auckland, where Q2 sales revenue dropped by 0.7% from the previous quarter, signalling the persistent impact of economic pressures on the region,” the Restaurant Association said in the report.
Businesses have had to increase their menu prices by an average of 6.4% to adapt to current market conditions. Additionally, 52% of the surveyed businesses cited the decline in customer foot traffic as their main concern.
“While the industry is undoubtedly facing challenges, we continue to see extraordinary determination from our members,” Restaurant Association chief executive Marisa Bidois stated.
“We’ve weathered tough times before, and while the trading environment remains difficult, we are prepared to face these challenges head-on and are focused on surviving until 2025 and beyond,” she added.
The takeaway sector saw a 4.2% rise in year-over-year sales in the second quarter. Local eateries were also thriving by establishing loyal customer bases that appreciate the communal experience of dining in their area.
As a way to support the beleaguered hospitality sector, prominent food wholesaler Gilmours announced a price freeze on essential products for hospitality businesses, which includes grocery items, chilled and frozen goods, liquor, beverages, and general merchandise. This price freeze applies to a total of 59 products and aims to alleviate some of the financial burdens faced by restaurants and cafes during this challenging period.
