Brisbane restaurant co-owner and chef Sebastiaan de Kort said he has had little choice but to pass on price rises of up to 20 per cent over the past year to his customers.
While overall inflation appears to be stabilising – recording 6 per cent in the year to June – inflation in the services sector is still running hot at a two-decade high of 6.3 per cent.
NOTA co-owner and chef Sebastiaan de Kort says prices have increased between 15 and 20 per cent over the past year. Jamila Toderas
Mr de Kort, the chef and co-owner at NOTA in Paddington and Allonda in Newstead, said the modern European restaurants have been hit by price rises of between 15 and 20 per cent for everything from utilities, food and beverages to delivery fees over the past 12 months.
“We have faced price increases everywhere, most definitely on the supply side of things. All aspects of our business have gone up,” Mr de Kort told The Australian Financial Review.
“We are on the front line of inflation, but it’s quite difficult because you can’t keep putting your prices up.
“People do understand and are willing to support, but we are also now out of some people’s price range.”
Mr de Kort said he had reduced staff numbers by 20 per cent in the past year to cut costs. He also personally shopped at the Rocklea Markets for fruit and vegetables to try to lower costs – buying what’s only in season to avoid more expensive imported items – but it was not enough.
The popular NOTA restaurant opened in Brisbane’s inner suburb of Paddington almost five years ago, with a second venture, Allonda, in the riverside suburb of Newstead started in October last year.
After enduring two years of the COVID-19 pandemic, Mr de Kort noticed an uptick in customers as restrictions were lifted.
But this has been negated over the past year with 12 consecutive interest rate rises hitting discretionary spending, as people either stay at home or eat and drink less when going out.
“People are still coming out to dine, but it’s nowhere near as many and the amount they spend has decreased. No week is the same. It’s a very confusing time to be in the hospitality sector,” Mr de Kort said.
While headline inflation eased last month, which homeowners and business operators are hoping will give the Reserve Bank of Australia less reason to increase interest rates next month, service providers have increased prices as they grapple with cost pressures like wages and utilities.
The cost of going to the vet rose by 7.7 per cent over the past 12 months, while the price of getting a haircut increased by 7.1 per cent and a restaurant meal went up by 6.5 per cent.
An acute shortage of properties has pushed rents 6.7 per cent higher over the year – the fastest pace of rent inflation since 2009.
Rents were 8.9 per cent higher in Brisbane, 5 per cent higher in Melbourne, and 7.3 per cent higher in Sydney, with further increases expected thanks in part to a strong rise in immigration.
Back at NOTA, Mr de Kort said he was trying to remain upbeat about the next six to 12 months.
“You have to be optimistic in small business. You have to be, otherwise you wouldn’t be doing it,” he said.
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