Restaurants face wage rise, energy costs and tighter margins in 2026, industry body warns

Wages were lifted by 4.75% from July 1, whilst electricity costs have grown 25% year-on-year.

Australia's restaurant, cafe and catering businesses are navigating a convergence of cost pressures in 2026, with wages, energy, insurance and rent all rising simultaneously against a backdrop of more cautious consumer spending, according to Restaurant & Catering Australia.

The industry body, which represents more than 57,000 businesses across the country, outlined ten pressures shaping the sector this year, warning that the gap between what hospitality looks like and what it actually takes to run has never been wider.

The Fair Work Commission's 2026 Annual Wage Review lifted award wages by 4.75% from 1 July, taking the national minimum wage to $1,004.90 a week. Electricity costs have risen more than 25% year on year following the end of government rebates, food costs remain around 7.5% higher than pre-pressure levels, and insurance premiums have climbed sharply as claims activity and risk loading increase across the sector.

Food service is also seeing a higher rate of business closures than most other sectors, R&CA noted, largely amongst venues without the property or capital buffer that pubs and larger groups carry.

Consumer behaviour has also shifted. Whilst Australians have not stopped dining out, around a third say they are being more careful with discretionary spending, with deal-led dining growing as a share of total visits.

On delivery platforms, R&CA noted that commission rates of 25% to 30% are now standard, with the real cost per order often running higher once additional fees are included. With one major platform having exited the market, the remaining players hold increased sway over how orders reach operators' kitchens.

Skilled labour shortages persist, with chefs remaining amongst the most consistently listed occupations on the national skills shortage list. Visa settings have also shifted the economics of sponsorship for smaller venues.

Technology adoption is accelerating in response to the pressures, with close to half of restaurants now using some form of AI or automation across booking systems, phone management and kitchen display tools.

R&CA said operators meeting these pressures with clear financial planning and data were weathering conditions more comfortably than those absorbing costs without a structured response.