Hospitality business advisory firm Quantaco has published its quarterly Hospitality Industry Update for January to March 2024, and it highlights increased weekly sales in food, beverage and gaming, but also inconsistency in trading.

The report’s industry performance metrics are based on the median aggregator and not the average, Quantaco says the median is a better midpoint measure for cases where a small number of outliers could drastically skew the average.

Quantaco says that total weekly sales increased by one per cent, in comparison to the same quarter last year, while weekly sales in food, beverage and gaming increased by 10, nine and 17 per cent respectively.

Quantaco’s Executive Director Mitch Stone said: “The report highlights a positive trend throughout the quarter, showing significant growth in sales, beverage, and gaming turnover compared to the previous year.

 “However, the trends become less clear when looking at the individual months. Food sales started the quarter strong but slowed down in March, while beverage sales had a slow start to the year but picked up significantly in March.

“Gaming turnover also had an erratic trend with a slower start to the quarter but ended on a high note. However, gaming turnover and net profit are not aligned, with a higher payout ratio this quarter leading to less revenue flowing into total sales.”

While food, beverage and gaming are all showing higher growth than the aggregate total sales growth, Quantaco says this would suggest “we are seeing declines in bottleshop sales and delayed rebate payments, all of which contribute to total sales. These factors will also be influencing the overall profitability, hence the decline in EBITDAR of one per cent.”

The report focuses on each category, and looking at food, the report states: “Food sales have continued to surpass beverage sales, resulting in an overall increase of 10 per cent for the quarter when compared to the same period last year.

“This trend has been consistent for the past two quarters, as pubs have invested more in their food options to attract customers from restaurants. Additionally, more diners are seeking value for money, and they are opting for more affordable food options. This shift in consumer behaviour is a result of a decrease in disposable income.”

Beverage sales also increased in the quarter, which was the same in the previous quarter, and the report says: “Despite a softening in household spending and, as detailed in the CommBank Household Spending Insights, Australians are prioritising experiences, including going out, which will be flowing through to an increase in beverage spending.

“Beverage Gross Profit has increased by four per cent, which could be derived from a focus on selling higher-margin products or a reduced need for discounting given an increase in venue patronage.”

When it comes to the 17 per cent increase in gaming seen in the quarter, the report states: “There has been a significant increase in turnover this quarter. However, upon analysing the data on a monthly basis, we can observe that January and February remained flat compared to the previous year, and only March exhibited a steep increase.

“Despite such increases in turnover, net profit has not increased to the same proportion, and given this feed’s total sales, we can start to understand why total sales aren’t higher than one per cent.”

Stone added: “We’re seeing wage costs reduce, but as with the rest of the report, the devil is in the detail with wage percentage for food rising four per cent, which is the sharpest increase we have seen all year.

 “The report underscores the industry’s ongoing high degree of uncertainty, underscoring the need for operators to have access to comprehensive information to make informed decisions. In this context, Quantaco, with its extensive data set, innovative technology-driven solutions, and seasoned professionals, stands ready to assist operators in navigating these uncertain times, instilling a sense of confidence and reassurance.”

To see the full quarterly report, head to the Quantaco website.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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