Inflation is making everything in our lives more expensive, but it doesn’t seem to have slowed spending at pubs across the country.
Consumer spending data tracked by CommBank shows spending at hospitality venues rose by 2 per cent in July, and is up 2 per cent annually.
Data from approximately 300 payment terminals operated by Zeller shows the average spend across a month at pubs is $31.20, a figure that’s held steady all year.
But the average volume of transactions steadily increased from 3,220 in January to a peak of 4,058 in April. Since then they’ve fluctuated month by month, dropping to 3,575 in May, rising in June to 3,912, and dropping again in July to 3,614.
It makes sense then that during the week, a pub meal special would be an attractive drawcard for punters, but data collected by this reporter shows that even the humble chicken parmigiana is more expensive than it used to be.
Parma specials, steak night, burger deals and pizzas have all steadily increased in price, as publicans pass on the rising costs of ingredients, energy, wages and salaries.
Parmaflation
In 2019, across 15 pubs in Melbourne’s inner north, the average price of a parma special was $14.40. By July 2023, across 19 pubs, the price had risen 37 per cent to just shy of $20.
Higher grain, labour and energy prices have seen retail chicken prices lift 11 per cent since 2019, with much of the increase taking place since January 2022, according to data from Meat and Livestock Australia.
After an 8.5 per cent price rise in the second half of 2022, one of Australia’s leading suppliers, Inghams, signalled in February that its prices would continue to rise through this year, as the company passed on rising production costs.
Ingham’s, which controls about 40 per cent of the Australian chicken market, has lifted prices by 13 per cent over the year to July, from $5.31/kg to $6.00/kg.
“The price increases were necessitated by the significant increase in feed costs, and growth in other key input costs, with market demand for poultry that continues to outpace supply,” Inghams chief executive Andrew Reeves told investors on Thursday.
Steak night has followed a similar trend, rising from $16.60 in 2019 to $23.70 this year.
Cattle prices at saleyards across the country have eased back to 2018 levels, although retail prices remain stubbornly high due to high energy, labour, packaging and transport costs along the supply chain.
The latest Consumer Price Index data shows an overall rise in the cost of dining out and takeaway meals, which are up nearly 8 per cent when compared with the same period last year.
Beyond the kitchen, recent hikes in the federal government’s alcohol excise are making drinks more expensive too.
The excise on sprits now sits at $100 a litre, while publicans are paying about $80 more for a keg of standard strength beer.
The perfect parma price
In Collingwood, just north of Melbourne’s CBD, co-owner of The Fox Hotel Clodagh Harris describes trying to price a weekly parma special as a “guessing game”.
“It’s a difficult recipe,” she said.
“We’ve got to take into account all sorts of things like the staff wages, breakages, cost of the parma.
“And to be quite honest, we just entice people with the lowest price we can on our parma nights, but that doesn’t quite cover the costs.
“So, you’ve got to entice people to have that second drink, and that hopefully improves our sales for the evening.”
Earlier this week, ASX-listed Endeavour Group reported strong sales growth in the 12 months to July at tills across its network of 354 pubs and hotels.
“Our hotels achieved record sales of $2 billion in FY23, representing growth of 31pc compared to the prior year, which we note was impacted by pandemic-related trading restrictions,” chief financial officer Kate Beattie said.
“Food and bar sales were strong, with both volume and average selling price in year-on-year growth.”
The company, which also owns Dan Murphys, BWS and the largest number of poker machines in the country, said it was passing higher labour and energy costs on to consumers, and its results were showing that, so far, they were happy to pay.
“What we’ve been able to do is pass through those cost increases that are affecting food and bars,” chief executive Steve Donoghue said.
“When you consider the price of a schooner of Toohey’s New is running at about $8.30 these days, it’s gone up a handful of cents because of the excise increases that are flowing through, and we’ve been able to pass that on to customers.
“And we do it begrudgingly because we want everybody to enjoy a great value drink meal, but we’ve been able to.”
