Under pressure

It was my honour to again represent Australia at the Global Restaurant Association Summit this month, in Chicago. It is clear that much of the world, like Australia, is doing well—visits to restaurants are on the rise globally—although it seems that spend is also under pressure in most markets.

There is now pressure on labour costs almost everywhere, albeit from a different base than in Australia. This is driven not only by regulatory wage increases but the skills and labour shortage. This is a worldwide problem (with the possible exception of India). The Americans now express this as a ‘war for people’.

Against the scale of the US market, Australia looks small. In total, Australia is about the size (in population and industry terms) as Texas. Given Australia is eleven times the physical size of that state, this provides for a real challenge in labour market terms.

In one analysis by global restaurant economists AlixPartners, Australia was very close to the highest achievers in terms of consumer potential and opportunity. If Australia is to realise that potential and maintain the high-quality offering, both regulatory and market-driven labour constraints need to be fixed.

At least two operators I spoke to said they intended to come down to Australia to see how we managed in an environment that is much more like where the US is heading. I hope our high-performing businesses are still around to tell the tale!

John Hart, CEO
Restaurant & Catering Australia

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