Australian Cafes Raise Prices Significantly Following Surcharge Ban
What happened
Following a ban on credit card surcharges implemented on October 1, businesses are reportedly using this change to pass along larger price increases to customers. A survey of over 1,500 cafes found that 17% raised prices, with the average increase being 50c, which is more than the typical 1.5% surcharge fee. The Australian Competition and Consumer Commission has warned businesses against misleading consumers regarding the reason for price hikes.
From theguardian.com
Why it matters
An economist at UBS stated that resilient consumer demand and a high inflation environment may be allowing merchants to use the surcharge ban as cover to pass through broader cost pressures. This suggests that price increases may exceed the original surcharge amount due to overall cost pressures.
From theguardian.com
Who's involved
- UBSEconomist at UBS who commented on consumer acceptance of price rises
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- UBSSpeculative
Businesses in the hospitality sector might face increased operating costs as they struggle with climbing costs and rising interest rates.