8655.0 - Cafes and Restaurants, Australia, 1998-99  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 15/09/2000   
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INTRODUCTION

This publication presents results in respect of the 1998-99 financial year, from an Australian Bureau of Statistics (ABS) survey of employing businesses in the cafes and restaurants industry. Businesses in this industry are classified to Class 5730 (Cafes and Restaurants) of the Australian and New Zealand Standard Industrial Classification (ANZSIC) which includes businesses mainly engaged in operating cafes and restaurants for consumption of meals on the premises and businesses mainly engaged in catering services. Businesses mainly engaged in selling take-away food were excluded from the survey but details for take-away food businesses will be released later this year as part of Retail Industry, Australia, 1998-99 (Cat. no. 8622.0).

TYPE OF BUSINESS

At the end of June 1999, there were 12,845 employing businesses in the cafes and restaurants industry. These businesses operated at 14,199 locations, comprising 4,552 licensed cafes and restaurants, 1,891 licensed and BYO cafes and restaurants, 2,748 BYO cafes and restaurants and 3,291 unlicensed cafes and restaurants. In addition, there were 1,716 locations operated by catering businesses, which represented 12% of locations in the industry. Excluding caterers, 52% of cafes and restaurants were licensed to sell alcohol.

At the end of June 1999, the cafes and restaurants in the industry had 1,057,083 seats available for consuming food on the premises. This represented 85 seats per cafe and restaurant location which varied from an average of 110 available seats for licensed cafes and restaurants to 62 available seats for BYO cafes and restaurants.

1 ACCOMMODATION BUSINESSES AND ESTABLISHMENTS


Type of business

Businesses (no.)

Locations (no.)

Available seating (no.)
Licensed cafes and restaurants
4,197
4,552
499,414
Licensed and BYO cafes and restaurants
1,801
1,891
171,996
BYO cafes and restaurants
2,668
2,748
169,052
Unlicensed cafes and restaurants
2,861
3,291
216,621
Subtotal
11,527
12,483
1,057,083
Catering
1,318
1,716
. .
Total
12,845
14,199
. .

. . not applicable

BUSINESS SIZE

The cafes and restaurants industry was dominated by small businesses during 1998-99 with 11,730 businesses (91% of all businesses) having employment of less than 20 persons. These small businesses accounted for 55% of industry employment and 52% of industry income. In contrast, there were 61 businesses in the industry which employed 100 persons or more. While large businesses represented less than 1% of the businesses by number, they accounted for 22% of industry employment and 27% of industry income.

EMPLOYMENT

At the end of June 1999, the total employment in the cafes and restaurants industry was 152,107 persons, of whom 63,093 (41%) were waiters and waitresses.

Just over half (51%) of persons working in the industry were casuals, which was reflected in the average labour cost per employee of $15,000.

INCOME

During 1998-99, businesses in the cafes and restaurants industry generated $7,174 million in income. Over half of this income (55%) was generated from sales of meals consumed on the premises. Sales of beverages accounted for a further $1,117 million (16%) while catering services generated $1,265 million (18%) of total income.

EXPENSES

Total expenses of businesses in the industry during 1998–99 were $6,805 million. The two largest expense items were purchases ($2,917 million) and labour costs ($2,109 million) which represented 43% and 31% respectively of total expenses.

PROFITABILITY

During 1998-99, the industry recorded an operating profit before tax of $334 million, which represented an operating profit margin of 4.8%. The operating profit margin varied by type of cafe and restaurant with the highest operating profit margin being recorded by BYO cafes and restaurants (6.6%), followed by licensed and BYO cafes and restaurants (5.7%) and unlicensed cafes and restaurants (5.6%). The operating profit margin for catering businesses and licensed cafes and restaurants was 4.6% and 3.9% respectively.

For 1998-99, the operating profit before tax (excluding caterers) represented an annual return per available seat of $251.

STATE AND TERRITORY DATA

Cafes and restaurant industry businesses in 1998-99 were concentrated in the eastern mainland States, with 79% operating in New South Wales, Victoria and Queensland.

Businesses operating in New South Wales accounted for 33% of industry employment and 37% of industry income which was slightly above the New South Wales share of the Australian population of 34%. Businesses operating in Victoria accounted for 25% of industry employment and 23% of industry income compared to its share of the Australian population of 25%.

2 KEY FIGURES



Total

Businesses at end June 1999 (no.)

12,845
Employment at end June 1999 (no.)152,107
Income
Takings from meals consumed on the premises ($m)3,947.7
Takings from take-away food ($m)444.6
Takings from catering services ($m)1,264.7
Takings from beverages ($m)1,117.2
Other income ($m)400.0
Total income ($m)7,174.3
Expenses
Labour costs ($m)2,109.4
Purchases ($m)2,917.2
Other expenses ($m)1,778.6
Total expenses ($m)6,805.2
Operating profit before tax ($m)334.2
Operating profit margin4.8%
Operating profit before tax per seat (excluding caterers) ($)
251.4

For further information about these and related statistics, contact Paull Hoffmann on Brisbane 07 3222 6201, or any ABS office.


EXPLANATORY NOTES

INTRODUCTION

1 This publication presents results, in respect of 1998–99, from an Australian Bureau of Statistics (ABS) survey of 2,300 employing businesses in the cafes and restaurants industry.


SCOPE

2 The scope of the survey was all employing businesses recorded on the ABS business register and classified to Class 5730, Cafes and Restaurants, of the AUSTRALIAN AND NEW ZEALAND STANDARD INDUSTRIAL CLASSIFICATION (ANZSIC). This class comprises businesses mainly engaged in operating cafes and restaurants for consumption of meals on the premises and businesses mainly engaged in catering services. Businesses mainly engaged in retailing ready to eat food for consumption off the premises are classified to takeaway food retailing (ANZSIC Class 51) and were excluded from the survey.


IMPROVEMENTS TO COVERAGE

3 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABS business register, and the omission of some businesses from the business register. The majority of businesses affected and to which the adjustments apply are small in size.

4 Adjustments have been made to include new businesses in the estimates in the periods in which they commenced operations, rather than when they were processed to the business register. Adjustments of this type will continue to be applied in future periods.

5 Further adjustments have been made for businesses which had been in existence for several years, but, for various reasons, were not previously added to the ABS register. The ABS is remedying these omissions.

6 For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (Cat.no.1357.0).


STATISTICAL UNIT

7 The unit for which statistics were reported in the survey was the management unit. The management unit is the highest-level accounting unit within a business or organisation, having regard for industry homogeneity, for which accounts are maintained. In nearly all cases it coincides with the legal entity owning the business (i.e. company, partnership, trust, sole operator, etc.). In the case of large diversified businesses, however, there may be more than one management unit, each coinciding with a 'division' or 'line of business'. A division or line of business is recognised where separate and comprehensive accounts are compiled for it.


REFERENCE PERIOD

8 Data contained in the tables of this publication relate to all cafe and restaurant businesses which operated in Australia at any time during the year ended 30 June 1999. Counts of businesses include only those businesses that were operating at 30 June 1999.


RELIABILITY OF ESTIMATES

9 The estimates presented in this publication are subject to sampling and non-sampling error.

10 The estimates in this publication are based on information obtained from a sample of businesses in the surveyed population. Consequently, the estimates in this publication are subject to sampling variability, that is, they may differ from figures that would have been obtained if all units had been included in the survey. One measure of the likely difference is given by the standard error (SE), which indicates the extent to which an estimate might have varied by chance because only a sample of units was included.

11 There are about two chances in three that a sample estimate will differ by less than one SE from the figure that would have been obtained if a census had been conducted, and approximately 19 chances in 20 that the difference will be less than two SEs.

12 Sampling variability can be measured by the relative standard error (RSE) which is obtained by expressing the SE as a percentage of the estimate to which it refers. The RSE is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and this avoids the need to refer also to the size of the estimate.

13 The following table contains estimates of RSEs for a selection of the statistics presented in this publication.



RELATIVE STANDARD ERRORS FOR KEY DATA ITEMS

RSE
%

Businesses at end June 1998
2.1
Employment at end June 1999
2.6
Income
Takings from meals consumed on
the premises
3.2
Takings from takeaway food
5.5
Takings from catering services
4.2
Takings from beverages
4.6
Total
2.4
Expenses
Labour costs
2.5
Purchases
2.6
Total
2.5
Operating profit before tax
8.5
Operating profit margin
9.1
Operating profit before tax per seat
(excluding caterers)
10.3


14 As an example of the above, an estimate of total income for the cafe and restaurant industry is $7,174.3 million and the RSE is 2.4%, giving a SE of $172.2 million. Therefore, there would be two chances in three that, if all units had been included in the survey, a figure in the range of $7,002.1 million to $7,346.5 million would have been obtained, and 19 chances in 20 that the figure would have been within the range of $6,829.9 million to $7,518.7 million (i.e. a confidence interval of 95%).

15 Errors other than those due to sampling may occur because of deficiencies in the register of units from which the sample was selected, non-response and imperfections in reporting by respondents. Inaccuracies of this kind are referred to as non-sampling errors and they may occur in any collection, whether it be a census or a sample. Every effort has been made to reduce non-sampling error to a minimum by careful design and testing of questionnaires, and efficient operating procedures and systems used to compile the statistics.


BUSINESSES CEASED DURING THE YEAR

16 A number of businesses ceased operations during the 1998-99 reference period. It is normal ABS procedure to include the contributions of these businesses in the survey output.

ACKNOWLEDGMENT

17 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.