Dire outlook for cafes as Aussies cut back

Exclusive: Australia has long prided itself on being the coffee capital of the world but an exclusive new reader survey suggests our cafe culture is facing a crisis as the cost of living tightens.

An exclusive nine.com.au survey of 537 readers has revealed 45 per cent of participants have cut back on buying coffee from a cafe.

A further 24 per cent said they have not changed their habits while 31 per cent were undecided.

READ MORE: Failure forecast for hospitality businesses spikes as belts tighten

The findings indicate Australians are cutting down on non-essentials as the inflation rate sits at 3.6 per cent, despite the Reserve Bank's efforts to reign it into the two to three per cent target.

Consequently, the cost of a coffee, like most items, have risen and reached up to $8 at some cafes.

When readers were earlier asked if they were willing to pay the exorbitant new prices, 93 per cent said no.

With rates not expected to fall anytime soon and Australians continuing to tighten their discretionary spending, CreditorWatch forecasts the hospitality sector to face even more difficult conditions ahead.

READ MORE: Unemployment rate creeps up despite 'tight' labour market

More businesses in the industry, which are already prone to high insolvencies, are expected to go under in the coming months.

"The combination of declining order values and increasing payment defaults is a major concern as it indicates more businesses are experiencing both cost and demand pressures," CreditorWatch chief executive Patrick Coghlan said.

"With another rate increase becoming increasingly likely, we expect both metrics to deteriorate even further."

*The nine.com.au poll, which runs once a fortnight, canvases the views of the nine audience on 9Nation, which is an online community of our readers and viewers.