Pub prices set to increase as cost of living crisis hits distributors

Pub goers could soon pay up to $15 a beer as inflation and the cost of living crisis forces businesses to jack up their prices.

Owners are struggling with the flow on effects of distributor price increases and balancing the fine line of paying the essential operating costs.

Simone Douglas, owner of The Duke of Brunswick in Adelaide told NCA NewsWire, pub favourites would likely spike due to the ongoing cost of living pressures.

“There will be a lot more businesses introducing a surcharge on Saturdays and Sundays. The labour cost is significant, so there are also flow on effects from that,” Ms Douglas said.

“It’s not just prices increasing on menu items.”

She said the household budgetary pressures people are experiencing are no different to the budgetary pressures businesses are also facing.

Camera IconDuke of Brunswick Hotel publican Simone Douglas, Brenton Edwards Credit: News Corp Australia

“We have prices increasing day to day, particularly fruit veg and meat,” Ms Douglas said.

“Chinese cabbage prices have gone up by $3.40 per cabbage. A box of tomatoes is around $50 and a 10L bucket of mayonnaise now costs us $146, so you’re left weighing up the benefits and the costs.”

“My gas bill went up by $2,000 a quarter. These are not insignificant amounts, it’s a big flow on impact.”

Suppliers are sending emails to their clients notifying them of significant price increases due to the price of fuel and demands, leaving pub owners in a tricky situation as they try and mitigate their cost balance.

She said owner operators are like the “piggy in the middle,” as they face similar issues seen in the middle of the pandemic.

“Generally, it’s the hospitality operator in the middle that gets squeezed the hardest because we have to pay our suppliers, and there’s a limit on that cost we can pass down to the customers before we hit what they’re prepared to pay.”

Camera IconAlcohol and food prices on the rise. People enjoy a drink and food at a riverside bar. NCA NewsWire / David Crosling Credit: News Corp Australia

But pubs aren’t the only businesses being hit hard, with cafes and small groceries also feeling the pinch.

Cafe and grocery store owner Lara Brett said the purchase price of fruit and vegetables has gone up exponentially over the past few months.

“Our biggest challenge is balancing our margins without scaring the customers away,” Ms Brett said.

“We’ve seen a 30-40% increase in prices for fruit and vegetables already.”

She said while there has been some pushback on the flow on price increases, there are less people around to actually spend money in small stores.

“We’re just not seeing the traffic through the door as much.”

“I have been compromising my own margin to keep customers happy, but there’ll come a point where that’s not viable or managable anymore,” Ms Brett said.

“A lot of business owners at the moment are probably looking at the future feeling quite scared.”

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