Hospitality

• The Russia-Ukraine conflict us causing price increases among many stable foods, hitting Australian food service providers. As fuel prices and fertiliser costs soar, the hospitality sector is struggling to compete, and is often being forced to pass these price increases onto consumers. Eastern state floods have also contributed to supply-side pressures.
• Rising menu prices are expected to reflect this demand until alternative supply solutions are found, or the Russia-Ukraine conflict deescalates significantly. Additionally, low unemployment increases labour costs and shortages for employers. The unemployment rate increased slightly to 3.5% in August 2022 but remains close to the lowest official rate since 1974. This low unemployment rate indicates a tightened labour market for employers due to a strong pressure to attract and retain employees, while labour has been scarce. Rising food and beverage prices are also squeezing profit margins.
• According to ABS, food and non-alcoholic beverages’ price inflation reached 5.9% over the year through June 2022. Therefore, consumers will most likely feel the pinch of rising living costs, with low-to-medium income families expected to shift spending towards cheaper alternatives, such as fast-food and takeaway food services.

Media

• Media consolidation in Australia has resulted in just a few large media groups. Over the past 10 years we have seen the move from old media to new media with the closure print media as consumers look to digital content for news and gossip.
• Streaming and playback TV services have changed the delivery of advertising to more targeted consumer audiences away from free to air broadcast networks. This can be seen in Australia in the growth of Foxtel’s Binge and Nine Entertainment’s Stan.
• The industry is forecast to return to growth over the next five years. Industry revenue is projected to increase at an annualised 3.2% over the five years through 2027-28, to $2.3 billion. Government funding is also forecast to grow over the period as growth in Australia’s population drives demand for music and performing arts services. However, the new National Performing Arts Partnership Framework is likely to affect government funding allocated to music and theatre production companies over the next five years.