<?xml version="1.0" encoding="ISO-8859-1"?> <docID>328952</docID> <postdate>2024-09-12 15:45:26</postdate> <headline>Cafe, pub splurge short-lived as consumer pain persists</headline> <body><p><img class="size-full wp-image-328953" src="https://citynews.com.au/wp-content/uploads/2024/09/20200413001463254771-original-resized.jpg" alt="" width="900" height="600" /></p> <caption>Household goods spending jumped in August as people splashed out on tools for Father's Day gifts. (Dave Hunt/AAP PHOTOS)</caption> <p><span class="kicker-line">By <strong>Poppy Johnston</strong> in Canberra</span></p> <p><strong>Pubs, restaurants and cafes reaped the benefits of early Father's Day celebrations but the boost was likely temporary as financial pressures keep a lid on consumer spending.</strong></p> <p>Hospitality spending jumped 5.2 per cent in August, based on Commonwealth Bank transaction data.</p> <p>The bank chalked that up to dads being treated to meals out, with money also funnelled into hardware stores and men's clothing outlets as adult children picked up gifts.</p> <p>Australian Restaurant & Cafe Association chief executive officer Wes Lambert agreed the spending increase was probably a blip and weak consumer demand would likely return.</p> <p>Rising prices and larger mortgage repayments have taken a toll on household budgets and kept spending contained.</p> <p>Spending at hospitality venues had been trending weak, with Australian Bureau of Statistics retail sales figures virtually flat for cafes, restaurants and takeaway food services in July.</p> <p>Mr Lambert said hospitality venues still faced a "perfect storm" of weak consumer demand and higher costs of doing business, especially for rent, utilities, insurance and labour.</p> <p>"Many are unable to lift menu prices to cover costs due to soft consumer demand," he told AAP.</p> <p>Deteriorating conditions for consumers and outlets have left one in 11 hospitality businesses facing failure, credit reporting bureau CreditorWatch predicted in July.</p> <p>Mr Lambert expected conditions for hospitality would be tough for the rest of 2024 and would "hopefully" improve in 2025 as inflation moderated and interest rate cuts began.</p> <p>CBA chief economist Stephen Halmarick also expects spending and the broader economy to remain weak.</p> <p>The bank forecasts the RBA to cut interest rates later in 2024, a departure from the remaining three big banks tipping a 2025 start.</p> <div class="wire-column__preview__text" id="preview-body"> <p>CBA expects inflation to moderate faster and the labour market to loosen more than the central bank thinks, hence the predicted earlier start to cuts.</p> <p>"However, there is a possibility of delays pushing this into early 2025," Mr Halmarick said.</p> <p>Thursday's spending indicator also captured the early impacts of government power bill rebates, with utilities expenditure down 0.3 per cent.</p> <p>"This, coupled with increased education spend, impacted spending across home ownership categories as we saw a jump in spending by renters likely due to university fees, while outright owners benefited from reduced spend on utilities as this is typically a larger share of their wallet," Mr Halmarick said.</p> </div> </body>