Income Insurance Online :: News
SHARE

Share this news item!

R&CA Highlights Rising Costs as Primary Factor in Restaurant Closures

Industry Body Calls for Policy Reforms to Alleviate Financial Strain on Hospitality Businesses

R&CA Highlights Rising Costs as Primary Factor in Restaurant Closures?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Recent data reveals that cafés, restaurants, and takeaway businesses in Australia are experiencing the highest failure rates across all industries, with a 10.4% closure rate over the past year.
This alarming trend has prompted Restaurant & Catering Australia (R&CA) to investigate the underlying causes.

Contrary to assumptions that declining customer demand is to blame, R&CA's analysis indicates that consumer spending at hospitality venues remains robust. The primary issue lies in the escalating operational costs that have outpaced revenue growth, placing immense financial pressure on businesses operating with narrow profit margins.

Key cost drivers identified include rising wages, increased energy expenses, higher insurance premiums, elevated rent, and complex compliance requirements. These factors collectively contribute to an unsustainable cost structure for many hospitality operators, particularly small, family-run establishments in suburban and regional areas.

John Hart OAM, National President of R&CA, emphasised that the hospitality sector is not lacking customers but is struggling with viable margins. He highlighted the need for policy interventions to address these cost pressures and support the sustainability of the industry.

R&CA is advocating for several reforms, including streamlining compliance processes to reduce regulatory burdens, addressing insurance affordability, enhancing transparency in energy pricing, and ensuring workforce policies align with the realities of a seven-day trading industry. These measures aim to alleviate financial strain and create a more conducive environment for hospitality businesses to thrive.

For restaurant and café owners, understanding and managing operational costs is crucial. Exploring strategies such as negotiating better terms with suppliers, investing in energy-efficient equipment, and reviewing insurance policies for cost-effectiveness can help mitigate some of these pressures. Additionally, staying informed about industry developments and participating in advocacy efforts can contribute to shaping policies that support the hospitality sector's resilience and growth.

Published:Thursday, 7th May 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Key Challenges Facing Australian Insurers in 2026
Key Challenges Facing Australian Insurers in 2026
07 May 2026: Paige Estritori
As Australian insurers navigate the complexities of 2026, three primary challenges have emerged at the forefront: premium affordability and insurability, cyber and data security risks, and workforce attraction and retention. These insights stem from industry feedback highlighted in Gallagher Bassett's forthcoming report, 'The Carrier Perspective: 2026 Claims Insights'. - read more
ACCC Scrutinises IAG's Proposed Acquisition of RAC Insurance
ACCC Scrutinises IAG's Proposed Acquisition of RAC Insurance
07 May 2026: Paige Estritori
The Australian Competition and Consumer Commission (ACCC) has commenced a detailed Phase 2 review of Insurance Australia Group's (IAG) proposed acquisition of RAC Insurance. This move follows concerns that the merger could substantially lessen competition in Western Australia's insurance market, particularly in motor vehicle and home and contents insurance sectors. - read more
ASIC's Actions Following Shield Collapse Transform Insurance Compliance
ASIC's Actions Following Shield Collapse Transform Insurance Compliance
07 May 2026: Paige Estritori
The Australian Securities and Investments Commission (ASIC) has outlined a series of enforcement and surveillance measures in response to the collapse of Shield and First Guardian. These actions are set to significantly reshape the compliance and governance landscape for insurers, particularly in their roles as underwriters, superannuation partners, institutional investors, and Australian Financial Services (AFS) licensees. - read more
APRA Enforces Additional Capital Requirement on Sovereign Insurance Australia
APRA Enforces Additional Capital Requirement on Sovereign Insurance Australia
07 May 2026: Paige Estritori
The Australian Prudential Regulation Authority (APRA) has recently imposed an additional $2 million capital requirement on Sovereign Insurance Australia Pty Ltd (SIA). This decision stems from identified weaknesses in SIA's risk management framework and operational risk management practices. - read more
R&CA Highlights Rising Costs as Primary Factor in Restaurant Closures
R&CA Highlights Rising Costs as Primary Factor in Restaurant Closures
07 May 2026: Paige Estritori
Recent data reveals that cafés, restaurants, and takeaway businesses in Australia are experiencing the highest failure rates across all industries, with a 10.4% closure rate over the past year. This alarming trend has prompted Restaurant & Catering Australia (R&CA) to investigate the underlying causes. - read more


Life Insurance Articles

Navigating Pre-existing Conditions in Income Protection Insurance
Navigating Pre-existing Conditions in Income Protection Insurance
Income protection insurance is a safeguard that provides individuals with financial stability in the event they are unable to work due to illness or injury. This type of insurance typically replaces a significant percentage of the insured's income, ensuring that their financial commitments can still be met during periods when they cannot earn an income through employment. - read more
How to Compare Income Protection Policies When You Have a Medical History
How to Compare Income Protection Policies When You Have a Medical History
In today's ever-changing world, financial security is a cornerstone of peace of mind, particularly for Australians grappling with medical histories. Income protection insurance emerges as a pivotal solution, safeguarding not only the individual’s fiscal health but the well-being of their dependents. This introduction explores the nuances of income protection insurance and its particular significance for those with pre-existing medical conditions. - read more
Income Protection vs. Life Insurance: What's Best for You?
Income Protection vs. Life Insurance: What's Best for You?
Financial protection is an essential aspect of sound financial planning. It ensures that you and your family are safeguarded against unexpected events that could lead to financial hardship. Two common types of financial protection are income protection insurance and life insurance. - read more
Income Protection Insurance and Tax Benefits: What You Should Know
Income Protection Insurance and Tax Benefits: What You Should Know
Income protection insurance is a type of cover designed to provide you with a safety net if you are unable to work due to illness or injury. By offering regular payments that replace a portion of your income, it helps ensure that you can maintain your lifestyle and cover essential expenses during challenging times. - read more
How Accidental Income Protection Insurance Can Provide Peace of Mind
How Accidental Income Protection Insurance Can Provide Peace of Mind
Accidental income protection insurance is a type of policy that provides financial support if you are unable to work due to an accident. Unlike regular income protection insurance, which can cover illnesses and injuries, this specific insurance focuses solely on accidents. - read more

Knowledgebase
Whole Life Insurance:
A type of life insurance that provides coverage for the insured's entire lifetime, with a savings component that builds cash value.