A Sydney cafe owner selling one of the cheapest coffees in the city’s eastern suburbs—$4.50 for a small flat white or latte—says the prospect of increasing prices has left him lying awake at night.
Dave Martin, who has run The Courtyard in Coogee for 15 years, said he is absorbing an extra $1,000 per week in costs on the likes of insurance premiums, wages, electricity, gas and supplier prices, as well as the recent card surcharge ban.
Dave employs 14 people and says small businesses like his are “on their knees,” forced to choose between passing mounting costs on to customers already battling financial pressure or accepting ever-smaller profits.
“You’d think after being here for 15 years, I’m well entrenched in the community, it’d be easier for me, but it’s not. It’s just getting harder and harder,” he told the Daily Mail.
The cafe operator said suppliers were now sending notices of price increases almost weekly or fortnightly, making it impossible to update his menu quickly enough to keep pace with rising costs.
“If I put my prices up every time I got an email, then there’d be no one coming through my door,” he said.
The challenge has been compounded by Australia’s cost-of-living crisis, with Dave acutely aware that his customers are under financial strain too.
As his operating expenses climb, he said more diners are being forced to limit how much they spend on meals and coffee when they eat out.
Dave Martin, owner of The Courtyard in Coogee, said soaring insurance premiums, wages, electricity, gas and supplier charges had made running a cafe increasingly challenging
“To try and charge people who are also doing it tough, in accordance with the money that you should be making, it’s impossible,” Dave said.
Instead of immediately passing each new increase on to customers, he has been absorbing about $1,000 in extra costs every week.
If that continues, he estimates the hit could reach approximately $50,000 over 12 months.
“I’m going to have to put my prices up eventually. I lay awake at night worried because I don’t want to lose customers.”
Coffee presents an especially difficult dilemma because cafes in the area are competing fiercely for customers. Dave estimates that 23 coffee shops operate within one kilometre of his business.
He has slowly increased food prices, occasionally adding $1 to menu items every six months, but has been far more hesitant to raise the cost of drinks.
“We basically just wear it. Our profit margins just get smaller and smaller,” he said.
The businessman employs 14 people and operates a busy cafe in one of Sydney’s best-known beachside suburbs, yet says even long-established businesses are struggling to keep up
The squeeze has also changed what he serves. Dave said customers who once routinely ordered generous breakfasts and larger lunch meals were increasingly opting for less expensive choices.
In response, he has cut back on pricier dishes and added more budget-friendly takeaway options.
However, while customers can reduce their spending on cafe meals, Dave said business owners have little influence over many of their largest bills.
He said workers’ compensation insurance alone costs the cafe $700 a week, even though the business has never lodged a claim during its 15 years of operation.
Other insurance premiums, gas, electricity and delivery charges have also risen, with Dave saying additional fuel surcharges were appearing on supplier invoices.
‘You get your delivery, and there’s another surcharge on there. It’s just literally one thing after the other.’
He believes many customers underestimate how much it costs to keep a cafe operating because they only see the final price on the menu – not what’s going on behind the scenes.
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Dave said the challenge was finding enough money to cover every obligation while keeping the business running.
‘Minimum wages have gone up, which I understand. I don’t begrudge paying anyone,’ he said.
However, he was concerned about the cash-flow implications of more frequent superannuation payments, which he said would leave less flexibility to manage other expenses.
‘Before it was quarterly, you could kind of work towards putting it aside for three months,’ he said.
‘Now, that has to go to the top of the list, so everything else suffers. Supplies, and my personal wage goes down, obviously.’
Under Australia’s Payday Super reforms, employers are required to pay superannuation alongside wages from July 1, 2026, replacing the previous quarterly payment arrangements.
Dave said the greatest irony was that while he was responsible for paying his employees, he could not always afford to put money aside for his own retirement.
When asked whether he contributed to his own superannuation, he replied: ‘No. A lot of small business owners don’t. We neglect ourselves first because we can’t afford it. We’re the last ones to get paid, last ones to get super.’
He explained that his financial priorities were straightforward: rent, staff and suppliers came first, with his own income being whatever remained.
He is also concerned about potential changes to disposable takeaway coffee cups, although he acknowledged he was unsure whether the proposals would proceed. (The NSW government backflipped on its plan a week after the legislation passed parliament).
After 15 years in business, Dave said the biggest change was how difficult it had become to make a reasonable living
He said any requirement for cafes to provide reusable cups themselves could create further expenses and slow down service.
‘At the moment, we take keep cups gladly, obviously, like everyone else. But if we have to be supplying keep cups and handing them out, that’s just ludicrous.’
Dave believes governments have underestimated the cumulative effect of rising expenses and regulatory changes on small businesses.
‘I just feel like this government’s so out of touch with the way small businesses are being run,’ he said.
‘All small businesses are on their knees at the moment, and I feel like they’re just kicking us while we’re down.’
Despite his frustration, Dave was careful not to portray himself as a victim. He acknowledged that his cafe remained busy and that many other hospitality operators were in a far more precarious financial position.
He also stressed that he did not want customers to feel responsible for the difficulties facing hospitality businesses.
‘I don’t want anyone’s pity or anything,’ he said.
Instead, he hoped people would understand why cafes sometimes had little choice but to increase their prices.
After 15 years in business, Dave said the biggest change was how difficult it had become to make a reasonable living, even with loyal customers and an established reputation.
‘It’s just the fact that costs are so high. It’s just getting harder and harder,’ he said.