The Silver Chef 2018 Hospitality Industry Success Index report has revealed that almost 10 per cent of Australian cafés, 9.9 per cent, have been in business for less than a year.
Of those new cafés, a large number opened in regional centres, with a 16.5 per cent increase is the number of cafés opening in non-urban areas.
The report says only 8.9 per cent of cafés have been in business for longer than four years.
Almost two thirds of cafés were classified as small businesses, with 65.5 per cent reporting less than $500,000 in annual turnover.
The majority of venues, 76 per cent, pay between $25 and $34 per kilogram of coffee, with 44.3 per cent going through between six and 15 kilograms of coffee beans per week.
Simple staffing structures are becoming more popular, with over half of venues, 59.8 per cent, employing six staff members or less. This increased 11.3 per cent when compared to financial year 2017.
Almost a quarter, 24.1 per cent, of respondents say their business performed about the same this financial yearcompared to the previous year.
Surprising trends respondents noticed in their business included the popularity of raw desserts and foods, gluten free alternatives, and alternative milks.
The report suggests the main challenges café owners can expect to face in the next 12 months include competition, finding ways to reduce wage costs, and increasing customer base.
In order to combat these challenges, 69 per cent of cafés say they intend to increase their focus on marketing. Sixty-two per cent intend to do so via social media.
Nearly one fifth of cafés, 19.5 per cent, were found to offer three types of coffee to customers, up 12.1 per cent from the last financial year.
“This is a major opportunity for businesses to diversify into offering coffee if they don’t already sell it,” the report says.
“The other opportunity is to expand your coffee offering – such as from a house blend to single origins – as customers are loving the choice and boutique offering.”