Published on 03/09/2015 by Punchmedia

Our Coffee Craving Boosts Cafe Cash

Cafe and Coffee Shop revenue in Australia is expected to grow by an annualised 7.4% over the five years through to FY 15-16. According to a recent IBISWorld report, this projected increase includes a large spike recorded in FY13-14 caused by rising consumer sentiment and growing incomes and also includes a forecast rise of 3.2% in FY15-16 to $5.3 billion in total revenue. Much of the industry’s success is due to the country's love for quality coffee and a vibrant cafe culture which is especially evident in Melbourne and Sydney. Australia's coffee culture and the growing number of small speciality cafes and coffee shops however, has resulted in a high level of competition with lower profitability in individual businesses the end result. According to IBISWorld an establishment's success is determined by its customer service, the price and quality of produce and the overall cafe experience. As a result, operators are expected to focus on premium ingredients and gourmet cafe style meals in an effort to boost sales of higher margin products. Strengthening economic conditions and ongoing interest in health and ethical consumerism should also provide some support for profit margins, however high fragmentation in the industry could fuel intense competition, causing profitability to decline further over the next five years, according to the report. Industry revenue is forecast to increase by an annualised 2.5% over the five years through to 2020-21, expected to reach $6.0 billion in total revenue Australia wide.

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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