Hospitality industry at the mercy of delivery services to keep business alive

Deliveroo Australia chief executive Ed McManus has spoken out about the struggles hammering the hospitality industry, revealing restaurants are relying on food delivery to stay afloat now more than ever.

Deliveroo, a global food delivery service operating Australia-wide, has released the Hospitality Index Report, a survey of 300 restaurants across the country to determine the impacts of inflation on the hospitality sector.

The popular service found the cost of living crisis and rising interest rates are “putting pressure” on restaurant owners across the country as they struggle with the ongoing effects.

Mr McManus said the hospitality industry was optimistic coming out of lockdown periods nationwide, but that it is now feeling the impacts of inflation surges and supply chain shortages “far and wide”.

He praised those in the hospitality industry for their innovative measures taken to increase business, as 60 percent of those surveyed said delivery services play an even more important role than ever.

“Restaurants have already demonstrated their ability to innovate and adapt through challenging periods, and it’s incredible to see how they’re responding to these current pressures by localizing their supply chain and some even growing their own produce,” Mr McManus said.

“It is clear this innovation has not slowed down.”

“Australia is home to some of the world’s finest and most diverse restaurants and cuisines, and we will continue to work hand in glove with the industry to support it through another challenging period,” he said.

The report found 31 percent of owners were no longer taking income from their own businesses, with a further third reporting feelings of financial risk.

Across the eastern states in particular, there has been an increase in the rates of access to financial services by restaurant owners, especially in Victoria, which has experienced more lockdowns than any other state.

One business owner told the survey they are no longer making their own wages, as customers are not eating out as much anymore.

“I’m no longer taking a salary and am having to take money out of the till to pay for my own petrol,” they said.

Supply chain shortages are also taking their toll on owners, with one telling the reported items are so regularly out of stock, they don’t know where to start.

“So many items are so regularly out of stock with suppliers,” a restaurant owner said.

“The prices of produce that I as an owner have noticed significantly increased are oil and meat,” they said.

“These are the main products we use for our business; you add increased costs for labor, too and everything has become very difficult.”

The hospitality industry is now calling on the new Labor government to further support business owners, asking for wage subsidies to employ more people and incentives to strengthen local supply chains.

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