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Category: News

Cafe’s under pressure

New data highlighted by the Australian Restaurant & Cafe Association (ARCA) shows 10.4 per cent of cafés and restaurants shut their doors in the past 12 months. By comparison, pubs, clubs and bars recorded failure rates of about eight per cent.

ARCA chief executive Wes Lambert said the sector was facing structural – not temporary – pressures. “This is not cyclical. This is policy-driven pressure layered on top of weak consumer confidence,” Mr Lambert said.

NSW’s Anzac Day long weekend plan: Small hospitality businesses urged to close

The decision will lift labour costs for hospitality venues to 75 and 100% of sales, Australian Restaurant & Cafe Association chief executive Wes Lambert warned.

“So we’ll be encouraging cafes and restaurants not to open,” Lambert told ABC TV.

“Hospitality businesses are on some of the lowest profit margins in history, below 3%, and they just cannot wear another public holiday in NSW.”

NSW to receive extra public holiday

Australian Restaurant and Cafe Association chief executive Wes Lambert cautioned small businesses against opening, saying, “Hospitality businesses are on some of the lowest profit margins in history, below 3%, and they just cannot wear another public holiday in NSW” (SBS).

A wave of restaurant closures looms—what three in 10 cutting back means for your favourite spots

The numbers paint a grim picture. According to the Australian Restaurant & Cafe Association (ARCA), one in nine hospitality businesses went insolvent in 2025.

Profit margins have shrunk to razor-thin levels: 2.8 per cent for restaurants and 2.6 per cent for cafes.

Wes Lambert, chief executive officer of ARCA, puts it bluntly:

‘Ultimately, when you have inflation at such a high level, consumers have to make a choice. They have to choose paying their mortgages and their bills or dining out.’

Aussie SMEs desperate for payroll tax reform, relief

The Australian Restaurant & Cafe Association (ARCA) also took the opportunity to oppose the current payroll tax regime, dubbing it a “hidden tax” on super contributions for small restaurants and cafes.

ARCA said working holiday makers (WHMs, international students and temporary migrants were an essential and longstanding labour source for Australia’s restaurant and cafe sector, yet the current income tax and super tax settings for temporary visa holders created additional labour costs, workforce uncertainty and administrative burden for small hospitality businesses already operating on thin margins under three per cent.

In terms of the “hidden payroll tax”, ARCA said this referred to superannuation contributions tax as employers paid 12 per cent superannuation for WHMs, international students and temporary migrants, but contributions were immediately taxed at 15 per cent.

Restaurants and cafes face wave of closures amid dire profit warnings

While the Creditor Watch business risk reports kept getting “worse and worse and worse”, one in nine hospitality businesses went insolvent in 2025, Australian Restaurant & Cafe Association (ARCA) CEO Wes Lambert told news.com.au.

Profit margins plummeted to just 2.8 per cent for restaurants, and a measly 2.6 per cent for cafes.

“Ultimately when you have inflation at such a high level, consumers have to make a choice,” Mr Lambert said.

“They have to choose paying their mortgages and their bills or dining out.”

NSW premier considering extra public holiday in April for Anzac Day

Australian Restaurant and Cafe Association CEO Wes Lambert criticised the plan, saying cash-strapped hospitality businesses would struggle to cover the public holiday penalty rates.

“This is a terrible idea,” he said.

“On public holidays, restaurants and cafes pay between 75 and 100 per cent of their revenue out in wages, so if the premier wants to add another public holiday, we’re going to advocate that restaurants and cafes around the state close.