<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Australian households are deserting </span><a href="https://www.9news.com.au/cafes" rel="" target="_blank" title="cafes and restaurants"><span>cafes and restaurants</span></a><span> in favour of pubs and clubs, new data released today shows.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>An alarming 10.4 per cent of food service companies closed during the past year - the highest rate of any industry and double the economy-wide average - according to CreditWatch's January Business Risk Index.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But pubs, clubs and bars, buoyed by stronger cash flows and asset backing, were more resilient, with annual failure rates closer to 8 per cent.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/tax-relief-for-beer-lovers-but-spirits-drinkers-call-for-reform-of-broken-system/b582f1b3-3bca-4d84-924b-09aaf5f63023" rel="" target="_blank" title="Tax relief for beer lovers but Nationals call for reform of 'broken' system"><strong><span>Tax relief for beer lovers but Nationals call for reform of 'broken' system</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The commercial credit monitoring firm says its report shows the hospitality industry is splitting between winners and losers.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In the food service sector, the share of business-to-business invoices overdue by more than 60 days has climbed to 12.4 per cent, compared with a national average of 5.9 per cent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>By contrast, pubs and clubs have recorded levels of 3.1 per cent, reflecting stronger balance sheets and greater ability to absorb rising costs.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/australian-cafes-and-restaurants-hit-crisis-point/4a254438-9ed0-456d-bd6d-add45dc7ff8b" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>CreditorWatch chief executive Patrick Coghlan says the figures show a clear divergence in the hospitality industry.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Asset‑backed pubs and clubs are holding firm, but cafes and restaurants are operating on razor‑thin margins with very little room for error.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/australian-sushi-chain-sushi-sushi-bought-by-japanese-empire/b5d79609-e29a-4824-883e-6ebc4d2a92bd" rel="" target="_blank" title="Australian food court chain Sushi Sushi sells to Japanese dining empire in estimated $160 million deal"><strong><span>Australian food court chain Sushi Sushi sells to Japanese dining empire in estimated $160 million deal</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"When overdue invoices in food service are running at more than double the national average, that's not cyclical noise – it's sustained financial stress."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Balance sheets of cafes, restaurants and takeaway outlets have been hit hard by steeper operating costs and weakening consumer demand.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>CreditorWatch says successive minimum wage increases, steep rent hikes in commercial property, food inflation, higher power bills and existing high debt levels have pushed many businesses to the brink.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Smaller food service operators - typically run on slim profit margins and at risk of losing customers if they pass on cost rises - are particularly vulnerable.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Retail data shows cafe and restaurant turnover has remained largely flat since early 2023, with cost-of-living pressures and high interest rates causing consumers to shun dining out and spend less when they do.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Businesses without pricing power, diversified revenue or cash reserves are being exposed, and the pressure has been building for months," said Coghlan.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><strong><span>NEVER MISS A STORY:</span></strong></em><span> </span><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><em><strong><span>Download the 9NEWS App here via</span></strong></em><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="" title=""><em><strong><span>Apple</span></strong></em></a><span> </span><em><strong><span>and</span></strong></em><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="" title=""><em><strong><span>Google Play</span></strong></em></a></li><li><em><strong><span>Make 9News your preferred source on Google by</span></strong></em><span> </span><a href="https://9.nine.com.au/8x987w" target="" title=""><em><strong><span>ticking this box here</span></strong></em></a></li><li><em><strong><span>Sign up to</span></strong></em><span> </span><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="" title=""><em><strong><span>our breaking newsletter here</span></strong></em></a></li></ul></div></div>