SKOPE Funding Market Update April 2023
SKOPE Funding Market Update April 2023
Australia and New Zealand are currently in the midst of a cost-of-living crisis, with prices increasing across many industries, including food supply, housing and transport with consumers and businesses alike feeling the pinch.
These price increases are causing some turbulent activity in the food and hospitality market, affecting many customers. In New Zealand, we’ve had reports of the humble cheese scone has risen up to $7.50 each (and even $10 in some cases!) due to ingredient price increases, through to reports of hospitality businesses being forced to close due to costs becoming too high for them to maintain, like the popular Pukeko Junction café just outside of Christchurch.
While we are seeing similar activity happening in Australia, we’re also seeing positive trends where consumers’ dining habits haven’t dropped off. However, the types of establishments they frequent are changing with a move away from fine dining and opting for cheaper options instead.
The latest data released by CreditorWatch shows "the pressure on discretionary spending in Australian households is approaching its peak, as a large proportion of fixed rate home loans move to variable rate loans over the next few months... the food and beverage sector is particularly exposed, and it is just a matter of time before Australians begin to spend less (per capita) at restaurants and cafes than they did in 2022." - read more here.
As a result of this activity, the market is currently both price-driven and price-conscious; consumers are looking to get the best price and value they can possibly get and - in turn - we are seeing that consumers are not necessarily wanting to spend or borrow large quantities – in fact, the latest Centrix data shows that new B2B lending in the hospitality sector is down by -7%.
We are also seeing evidence that while consumers are wary about paying too much, they are also very focused on ensuring they get the most value out of the products and services they are spending money on. An example of this behaviour that we see at SKOPE is that consumers sometimes opt to finance an upgraded ActiveCore fridge rather than the more standard spec EziCore, showing an appetite to pay that bit more for something that has an extended life projection and will save them money day-to-day.
As a hospitality business can be expensive to run, another key consideration for your customers to take into account is the cost of energy, and how much products actually cost to run now and over the coming years – a good tool to compare energy costs for refrigeration is this Energy Comparison Tool developed by SKOPE.
Some Key Resources that might help
Here are some key resources that our team often find to be good sources of information.
How SKOPE can help
In this market where consumers are feeling wary about making big purchases and wanting to find value in the purchases that they do make, here are a few reminders of what solutions we can offer at SKOPE that may help your customers:
- Competitive SKOPE Funding Own Me Plans with rates that have not changed in the last three years (despite OCR increases), and a term for every budget (1-5 years)
- Larger deposits can be made to bring down the total cost of funding – if businesses have some budget that can still be used this financial year.
- If an outright purchase is preferred but cash reserves are tight, our Clearance website offers up to 50% discount off near-new SKOPE cabinets.
- Our Short Term Rental solutions can be a useful way to bridge cash flow shortages and mitigate risks for the customer.
If an even more cost-effective solution is needed, do ask the SKOPE Funding team if we can help as we often have a fleet of ex-lease upright display fridges that need to be moved.
Contact Us
In conclusion, in these current market conditions where consumers are understandably very price-driven and price-conscious, we have a variety of solutions that can help - in particular - through our SKOPE Funding team.
If you would like to reach out and speak to the team about finding a solution for your customers, you can either complete the form or contact us on the details on this page.