Australia's food industry faces a grim future as people spend less on dining out.

The Australian hospitality industry is facing tough times ahead, with one in 11 businesses expected to close within the next year. This comes as no surprise, as customers are cutting back on non-essentials and tightening their belts amidst financial uncertainty. It's a trend that has been reflected in recent statistics, with a significant drop in the average value of business invoices.

According to credit reporting bureau CreditorWatch, the average value of business invoices has fallen by almost 50% in the past year. This is a clear indication of the challenging economic climate, with businesses struggling to maintain their sales and profits. As a result, many are reducing their inventory and scaling back their operations in response to higher prices and lower demand.

Unfortunately, the hospitality industry is expected to be hit the hardest, with a forecasted failure rate of 9.1% in the coming year. This is significantly higher than other industries such as arts and recreation services, and transport, postal and warehousing. In fact, the average failure forecast across all industries is 5.1%, making the hospitality sector a cause for concern.

CreditorWatch CEO Patrick Coghlan explains that the high failure rate in the hospitality industry is due to its heavy reliance on discretionary spending from customers. However, with Australians facing rising costs in essentials like mortgages, rent, and utility bills, there is less spare cash to spend on dining out and other leisure activities. This has created a challenging environment for businesses in the hospitality sector.

Coghlan warns that the situation is becoming increasingly dire for Australian businesses, with declining order values and increasing payment defaults being major concerns. He predicts that these metrics will only worsen if interest rates continue to rise, putting even more pressure on struggling businesses.

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