Cafe prices tipped to increase

Lincoln Tan

Be prepared to pay more for food and coffee as many hospitality businesses struggle to afford increasing costs, the Restaurant Association warns.

Lack of skilled employees was ranked as the top challenge and managing wage costs was second for respondents to an association survey.

The association, which represents more then 2200 Kiwi hospitality businesses, asked members what they thought would be the biggest challenge facing the industry this year.

“With changes to employment law including the reversal of rules around 90-day trial periods and more prescriptive rest and meal breaks, hospitality owners are having to be increasingly creative to keep their businesses afloat,” said Marisa Bidois, the association’s chief executive.

“Skilled employees play a crucial role in supporting the shortfall of workers in the industry, so it is important that the industry can continue to employ migrant workers where no suitable New Zealand candidates can be found.”

About 40 per cent said legislation was a key challenge, she said.

“The Government plans to lift the minimum wage by around 6 per cent per annum over the next three years which will leave New Zealand with the highest minimum wage relative to average income in the OECD.”

Bidois said the survey indicated that many businesses would simply not be able to afford the increased cost.

“The obvious losers are the customers who will ultimately pay the price for increased prices on menus.”