Sydney Cafe Owner Absorbs $1,000 Weekly Cost Increase to Avoid Raising Prices

A Sydney cafe owner is absorbing an extra $1,000 in weekly operating costs to avoid passing price increases onto his customers, a decision that is significantly impacting his business.

Dave Martin, who has owned The Courtyard cafe in Coogee for 15 years, is currently selling small flat whites and lattes for $4.50, among the lowest prices in the city's eastern suburbs. He is facing rising expenses for insurance, wages, electricity, gas, and supplier costs. Martin estimates that if these increases continue, the total cost to his business could reach approximately $50,000 over the year.

"If I put my prices up every time I got an email, then there'd be no one coming through my door," Martin told the Daily Mail. He is particularly concerned about this issue given the cost-of-living pressures faced by his clientele.

"To try and charge people who are also doing it tough, in accordance with the money that you should be making, it's impossible," he said. Instead, he is absorbing the extra costs, which shrinks his profit margins.

While Martin has incrementally increased food prices, sometimes by a dollar every six months, he has been hesitant to raise beverage prices due to intense competition. He noted there are 23 coffee shops within a kilometer of his business.

The financial strain has also led him to adjust his menu. He has reduced the number of more expensive dishes and introduced more affordable takeaway options, as customers are increasingly opting for cheaper choices.

Beyond the rising cost of goods, Martin highlighted other significant expenses. He stated that workers' compensation insurance alone costs his business $700 per week, despite no claims being made in 15 years. Additional fuel surcharges on supplier invoices are also becoming more frequent.

Martin expressed concern about upcoming changes to superannuation payments. Previously paid quarterly, employers will be required to pay superannuation alongside wages from July 1, 2026. "Now, that has to go to the top of the list, so everything else suffers," he explained, referring to supplies and his own wages.

He admitted that many small business owners, himself included, often neglect their own retirement savings to prioritize rent, staff, and suppliers. "We neglect ourselves first because we can't afford it. We're the last ones to get paid, last ones to get super," Martin said.

Martin also voiced concerns about potential regulations regarding disposable coffee cups, although he acknowledged uncertainty about their future implementation. He believes that governments underestimate the cumulative effect of rising expenses and regulatory changes on small businesses.

Despite his frustrations, Martin emphasized that his cafe remains busy and acknowledged that many other hospitality operators are in more difficult situations. He hopes customers will understand the reasons behind potential future price increases.

"It's just the fact that costs are so high. It's just getting harder and harder," he concluded.