One in eight Australian restaurants closed in a year as profits collapsed
One in eight Australian restaurants and cafes closed in a year as profit margins collapsed.
Australia's restaurant industry is in crisis. One in eight cafes and restaurants shut down between July 2025 and July 2026, almost double the failure rate of other sectors.
Twenty years ago, a typical restaurant made around 10 per cent profit. By late 2025, that had fallen to 2.5 per cent.
Now, with rising wages and forced costs like card fees, many operators are left with almost no profit at all. Independent venues like Claret Club in Sydney struggle to fill seats as customers cut spending.
Owners face constant choices between quick fixes and long-term solutions just to keep the doors open.
- Around 10 per cent
- Average profit margin 20 years ago
- 2.5 per cent
- Average profit margin end of 2025
- Sydney CBD terrace edge
- Location of Claret Club
Why it mattersIndependent restaurants create community spaces and support local staff, but mass closures mean fewer affordable places to eat out and potential job losses.
AustraliaAustralians are losing access to neighbourhood restaurants and bars, while hospitality workers face tighter job markets and ongoing cost-of-living pressure.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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