An industry report for Q2 of FY24 shows positive signs for pubs, with growth in the right departments and stability in the right places.
Hospitality services provider Quantaco issued its review of the second financial quarter, spanning October to December 2023, comparing results from a vast number of Australian businesses with those of the same quarter in 2022.
Data revealed weekly sales have increased by an average of three per cent.
Comparably, wages have increased by one per cent, which is consistent, and likely attributable to the Award increases for hospitality and restaurant workers implemented in July 2023.
Notably, wages are measured as a percentage of sales, but profitability, as measured by EBITDAR, also shows a positive increase of one per cent.
Gross Profit had seen declines in previous quarters, however this report found GP had risen three per cent, from 61 to 64 per cent.
This is deemed particularly noteworthy in the inflationary environment seen in Australia. It augers well with ABS data that showed inflation on a steady decline through 2023 and reporting suggesting inflation may have peaked in December 2022.
“The latest figures from the ABS show inflation at 4.1 per cent for the year to December 2023,” reports Mitch Stone, Quantaco executive director. “This is a substantial reduction from the 7.8 per cent recorded in the December 2023 quarter.”
Leading the charge were food and beverage sales. Dining continues to outperform, increasing by a very significant 17 per cent, which furthers the 10 per cent increase in the previous quarter.
It’s suggested the increase in weekly food sales may reflect an increase in patronage, but it likely also reflects the price increases that have come in response to inflationary pressures on the cost of goods.
While beverage sales had been ‘flat’ in the prior quarter, they made a resurgence in Q2 and increased overall by nine per cent. GP on beverages stayed static at 64 per cent, which the company notes is “encouraging” after prior declines, as they suggested promotions or discounts were being used to drive sales.
Gaming turnover is also up year-on-year, by 11 per cent, although gaming performance in FY24 has been inconsistent, producing both positive and negative months.
Quantaco advises that to optimize profitability it is crucial to maximize the return on your highest variable cost – wages – and the company finds genuine upside in the results.
“While our report captures the resultant sales increase, it is imperative to acknowledge that this growth is not solely indicative of price adjustments; there is tangible expansion in volume, particularly in food sales, when compared to the same quarter last year,” says Stone.