A 27% sushi premium: Will ‘lunchflation’ keep workers out of Aussie CBDs?

As the price of sushi and sangas soar, cost-of-living pressures raise new questions around whether workers will be likely to return to Australia’s CBDs.

Data from technology business Square has found that prices are rising at restaurants and cafes across Australia, with some lunchtime staples seeing the biggest increases.

Between March 2021 and March 2022, for example, the average price of sushi has increased by 27%. Kebabs are 15% more expensive.

In the major cities, the average price of a sandwich is up 28%, the data suggests.

The price of the average budget in a CBD is up 14%, while dumplings will set you back 6% more and wraps are about 5% more expensive than they were a year ago.

On the other hand, it pays to choose a healthy option, with soups and salads down in price by 4% and 3%, respectively.

Between supply chain challenges and increasing staffing costs, it’s perhaps unsurprising that hospitality businesses are passing costs on to consumers to make ends meet.

However more expensive lunches in Australia’s CBDs — which the Square report dubs ‘lunchflation’ — raises yet another question around the future of work, and whether heading back into the office is worth it for workers.

Speaking to SmartCompany, Hareta McMullen, people coach and founder of Third Space People, says the cost of living is undoubtedly increasing, and everyone feeling the pinch.

This is something business owners and HR managers should be aware of, she says.

For employees, traveling into the office means spending on public transport, coffees and lunch, as well as losing out on a few dollars of work-from-home tax benefits, and the time it takes to get to their desk and home again.

Reports have also suggested that coffee prices are on the up, with a cappuccino set to cost as much as $7.

That’s before factoring in the risk of actually contracting COVID-19.

“It comes back to the overall value proposition that you’re providing to your employees,” McMullen explains.

Some companies have been subsidising energy bills for employees, or providing an allowance for home offices. If they want to entice people back into the office, they could be looking at equivalent benefits — free breakfasts or a travel allowance, for example.

It’s not necessarily the responsibility of an employer to cover these costs, she adds.

“However it comes back to what you want from your employees, and how that is going to impact your business?

“If you want employees to come in and they’re telling you it’s difficult because of the cost of living … how can you help facilitate that?”

Of course, the shifting narrative around hybrid work also presents a conundrum for CBD businesses. After a devastating two years of on-again-off-again lockdowns — and unofficial lockdowns — footfall is finally starting to increase.

Rising prices may well drive people to consider staying at home, and to be more mindful of their lunch options when they’re in the city.

Speaking to SmartCompany, Square’s head of business development in Australia Colin Birney notes that employees want the choice of working from home or in the office.

“After two years at home, working from an office has become a bit of a novelty for many,” he suggests.

“It gives people the chance to catch up and socialise with their workmates in real life, rather than through a screen — and with their favourite coffee or sandwich, rather than their homemade version. It’s a treat.”

Equally, Birney says Aussies tend to try to support local businesses — they’re aware of how difficult the past two years have been, and they’re willing to put their hands in their pockets.

“With people working from home, we’ve seen that suburban cafes and restaurants have actually done pretty well over the past couple of years,” he observes.