With consumer sentiment so touchy, beware the pitfalls of talking down the economy. And tell your friends: we’re still going strong.
It’s official—we are now a two-speed economy! For restaurants, the overall picture is still of modest growth (of just over 4 per cent), but the true picture shows that some states are growing strongly, while others are going backwards.
It’s the first time in nearly two years that we have seen negative growth. The Association believes that the reduction in expenditure is the result of ‘talking the economy down’—not a direct result of interest rate rises themselves.
We have supported the need for fiscal restraint by the Government, but cautioned against this talking down of the economy.
Once again, the situation proves that the restaurant industry is the first to feel any dampening of consumer sentiment. Whenever tax cuts have been announced in in the past, restaurant revenues begin to bounce long before the cuts are delivered. Similarly, we see a fall as soon as consumers are exposed to any negative aspects of the economy. We could even have the worst of two worlds—a worsening skills shortage in growth areas, and a slowing of demand across the rest of the nation.
The Association will keep promoting the vibrancy of the industry and its positive performance over the past 12 months. It is only by doing this publicly that we can respond to the negativity of the economic chatter.
President, Restaurant & Catering Australia