Tipping in restaurants declines as cost of living bites
New research by Lightspeed Commerce shows tipping habits in Australia aren’t keeping pace with higher restaurant prices.
The average tip amount dropped in August to 8.1% of a total bill as diners grapple with cost-of-living pressures.
The report states this is the lowest amount in four years and the first time it has dropped below 9% since early 2021.
“At a time where the industry is still recovering from the pandemic, staffing shortages and economic pressures, tips are a way customers can show their gratitude and support to the industry,” Lightspeed’s managing director for Asia Pacific Andrew Fraser said.
“With inflation driving costs up, this is impacting the additional money that is able to go back to hospitality staff for their service.”
Restaurants, like consumers, are battling a 4.8% rise in food prices. Meanwhile, restaurant owners are paying higher rents, energy bills, insurance and general overheads.
These costs are being passed on in the form of service fees or surcharges and are certainly a reason why tipping has decreased.
Of course tipping was never mandatory, but Australians have generally tipped around 10% of the bill.
“Historically, our tipping culture is based on performance,” Tony Green, chief executive of the Australian Foodservice Advocacy Body, said.
Being prompted to tip by Eftops machines may also be off-putting for some diners, although Green said patrons can pay be card and tip in cash if they so choose.
Jonathan Jackson, 21st November 2023
