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Inflation woes? Cafes and restaurants are spending 20% more on supplies

New data proves cafes and restaurants are feeling the cost of living pinch, but digitisation of hospitality industry key to getting through.

New data reveals 20% increase in supplier prices and 13% increase in payment failures across the board due to inflation and rising cost of living.

Australia’s largest wholesale online order management platform for food and beverage, Ordermentum has mined data to reveal how the cost of living crisis is affecting the hospitality industry, and the economy as a whole.

The data comes from analysing the spending habits of 36,000 Australian cafes, bars and restaurants, and the 650 suppliers that use Ordermentum to purchase and sell baked goods, coffee, fruit and vegetables, seafood, poultry, packaging and more.

It revealed that supplier prices for goods have increased by 20% since 2020 – a figure that has increased due to inflation and rising interest rates. The data also showed that we are not yet back to pre-pandemic trading levels, however, there was a substantial increase in spending in the last few months.


“As the largest food and beverage platform in Australia, our data can be seen as a key indicator of the current Australian economy. We’ve sifted through $2 billion worth of transactions to understand the economy’s fundamental signs,” said Adam Theobald, Founder of Ordermentum.

“It shows that even though we’re not at our pre-pandemic trading levels, the amount owners are spending on goods for their venues have increased by 20% across the board. That’s looking at the average increase across all categories – coffee, baked goods, dairy, poultry, seafood, packaging, everything.”

Ordermentum’s figures also revealed that failed payment attempts between venues and suppliers had increased by 13% since January this year – something that could be attributed to the rising cost of living and current economic conditions.

The majority of increased payment failures occurred during the months of August, September and October of 2022. In a state by state comparison, failed payments in VIC and NSW have steadily climbed followed by QLD and SA.

“There are a few reasons these failed payments could be happening – one of them being, venue owners are just not able to make their payments due to the rising cost of living,” said Adam.

While a 20% increase in the cost of goods and this figure of failed payments show the rising cost of living and its pressures, Ordermentum’s platform has been fundamental in keeping venues and suppliers afloat.

One of Ordermentum’s key drivers of business and venue/supplier signups is the digital payments function, which allows venues to control their spend, and suppliers get paid faster. This has dramatically helped to combat the cost of living crisis as credit checks are eliminated and payment can be taken on the spot.


“Despite this year’s increase in failed payments, it’s definitely not the norm – most venues and suppliers on our platform pay and receive payments in a quick and timely manner due to our digital payments function. Our research has shown that suppliers can get paid up to five times faster with Ordermentum,” said Adam.

“Many suppliers would not have been able to trade through these turbulent times without digital payments, access to cash flow, reduction of bad debt, and being able to take on new customers, which is what we have helped with.”

Ordermentum’s auto-reconciliation, accounting integration, and paperless invoicing features save business operators hours of admin weekly, which has alleviated the stress of labour shortages and operating costs.

An additional feature that has helped manage the increasing cost pressures include Real Time Insights, allowing suppliers to analyse customer behaviour and determine which customers are slowing down on their payments, and their overall business performance. For venues, it is an indicator of where their money is going.

“Implementing the right reporting and insights tools can turn business data into real actionable insights. Our Real Time Insights tool has been essential during this tough period – venues can quickly see where they are spending and their cost of goods, and suppliers can see at a glance how their business is performing, which customers are slow on payment or ordering, and how their product ranges are performing. Getting an instant snapshot of business performance through our platform is helping owners make informed decisions,” said Theobald.

Mark Lenga, General Manager at food and beverage wholesaler Satisfine Foods said: “This year has certainly been stressful for businesses of all sizes, as cost of living increases and the price of nearly everything has gone up.  But because we’ve been using Ordermentum for a while, we have robust reporting mechanisms in place which means we can easily and quickly understand what’s happening in terms of stock movement and fluctuations in customer behaviour. This means we can address things quickly which gives me peace of mind.

“The other thing that makes the current climate easier to deal with is cashflow. Back in the day, a large percentage of our customers used to pay us on terms, which is very common in the food service industry. But this meant that we weren’t getting paid for at least a month or more which meant it was hard to get ahead of feeling financially squeezed. Automatic payments on Ordermentum has been a game changer, and even when the economic forecast is grim, I feel a lot more secure knowing that as soon as stock is purchased, we’ll be getting the cash for it”.


Also read: Underlying inflation: a historic shift of income from workers to corporate profits


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