More Australians are skipping their pre-work takeaway coffee and breakfast roll so they can splurge on a meal on the weekend, as the rise of hybrid work and high living costs upend spending habits.
Transactions data from digital payments platform Square shows the number of purchases at food and drink businesses between 7am and 11am on weekdays has dropped to below pre-pandemic levels, led by falls in Melbourne, Sydney and Brisbane.
At the same time, transaction volumes have increased during weekend brunch hours, with the findings pointing to a new normal for how Australians prioritise their spending.
On one hand, consumers are cutting back on nonessential purchases amid a cost-of-living crisis. But they are still using some of those savings to splash out on things that are important to them, like a Taylor Swift concert ticket or brunch with friends and family.
It’s a trend noticed by Michel Dubois, the owner of Melbourne-based French creperie and cafe businesses Roule Galette and Croque Monsieur.
“During the week, we now work less,” says Dubois, adding that sales are down on some weekdays by as much as a fifth from a year ago.
“But if you come on Saturday, there’s a queue before we even open. People are saying they are not buying as much during the week because of living costs, but they still want something nice on the weekend, like our confit de canard.”
Dubois says business costs have increased drastically, with energy bills more than double pre-pandemic prices, but he is reluctant to pass on any more costs to customers.
“I don’t think this year I can raise my menu prices because people cannot pay.”
Weekday breakfast transactions are down by more than 5% in Melbourne while weekend brunch volumes are up 4%, compared with 2019 levels, according to Square’s analysis of millions of transactions at restaurants and cafes.
In Sydney, weekday breakfast transaction volumes are down 2.4%, but up 1.6% during weekend brunch hours.
The trend is part of a wider change in consumption in post-pandemic Australia that includes a “trading down” culture, with many households seeking out cheaper supermarket brands, or shifting spending away from mid-tier restaurants to fast food.
More employees are working from home and packing their own lunches when they do go to the office.
Even relatively affluent workers are now dramatically changing their spending, as elevated interest rates and inflation-fuelled living costs plunge some into severe mortgage stress.
Adapting to changing habits
Venues catering for professional workers are trying to adjust.
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“We’ve heard of cafes starting an evening service to grab some of the afterwork economy, others that are opting for an extra day closed, and some are selling groceries and other goods as a way to bring in more revenue,” says Colin Birney, head of business development at Square in Australia.
“We’re often told that making your coffee at home or having cereal at the office are some of the easiest ways to save a bit of cash, and that seems to be playing out as demand for weekday breakfasts decreases.”
Transactions data from payments processor Lightspeed shows there is an increasing number of orders placed at off-peak times, including between 5pm and 6pm, which is when bars and food businesses commonly offer cut-price deals.
Andrew Fraser, managing director at Lightspeed for Asia Pacific, says the trend towards making the most of happy hours is gaining momentum.
“Ultimately, people want the most bang for their buck. Venues understand that, and we know many are adopting tactics like happy hours, weeknight specials and early bird prices to incentivise patronage during traditionally slower periods,” Fraser says.
“People still want to get out, spend time with friends and family and support their favourite venues, they’re just doing so at times that they can derive more value from.”
Australians dropped their overall spend on cafes and casual dining restaurants over the past year, according to a report from CommBank iQ, which noted that customers may be switching to more affordable eating options, such as fast food.
Brunches are also often a cheaper alternative to restaurant dinners, making them a popular weekend option.
Interestingly, spending on fine dining increased over that period, according to the report. This could show that people are still saving up to mark occasions, or it could be a sign of the increasing wealth of older generations which have tended to benefit from interest rate rises and increased their discretionary spending.
Lola Chatainier, manager at Croque Monsieur and Roule Galette, says she’s noticed weekday numbers are decreasing, with those coming in often looking for quick, affordable meals.
“But on the weekend we have long lines, and a steady stream of customers.
“Those who come with lots of family or friends are prepared to wait for a big table, because they are here for a good time.”