Restaurants are under pressure; some are even closing down. STATS SA numbers tell us that restaurant and coffee shop incomes have declined by almost 2% over the first half of this year. Meal prices in restaurants have increased sharply over the past few years.
Take a simple breakfast meal at your local Wimpy: a couple of years ago, it used to cost about R30. Now you’re lucky if you can get something under R60. Coffee shops that used to sell coffee for R20 are now selling them at R35 to R40, and they entice you with add-ons so they can get nearer to the R100 mark.
The same goes for chain restaurants like Spur, where burgers start from about R140 upwards. Plus, and this is not inconsequential, you have to drive to a restaurant, so there’s money for petrol, which has gone up considerably, and you have to give a gratuity, which increases because of the increased price of food and beverages. That’s why we see a decline in the number of people eating out at restaurants.
What are people doing instead? They’re eating at home.
For those with a meal ticket—people in hugely paying public jobs and those in private sector, big corporate jobs on expensive accounts—eating out means nothing. They can order what they want and be as lavish as they want, because someone else is paying for it.
For the ordinary person, going out to restaurants might only be for birthdays, special occasions. In some cases, they might think, “It costs a lot to eat out, but I’m just tired of cooking; I want something different.”
Behind all of this is the increase in prices of food and beverages. Beverage prices have also doubled, and in some cases, tripled at restaurants. But what is behind the prices or cost of food? If you look at it from the government, they would immediately blame farmers, but farmers are the ones who are least to blame. They have to keep prices in check, or nobody will buy their produce.
Then there are the food manufacturers, many of whom are listed on the stock exchange and need to make handsome profits. That leaves the restaurants. They have to buy food and beverages from the catering industry.
Now, we’re not talking about hotels because I saw something from the hotel industry where people were having a huge annual awards function, slapping themselves on the back, and chefs such as at the Seven Apostles were being celebrated, along with all sorts of food experts. That’s a whole different category—a category not for the ordinary person, but for the ultra-wealthy tourists, people who were born with a silver spoon, inherited money, or old money.
Then you have the government itself that rakes off 15% in VAT from all food and beverages, except for a small list of basic food items. So, the government takes a higher 15% as restaurants charge more and more.
We also need to look at the other costs for restaurants and coffee shops, and that’s rentals that have been spiked up as well as wages that have risen hugely.
It’s a pity and a crying shame in a country like South Africa that people have to eat less at restaurants, because the tradition was at least every Friday night going out to a restaurant, and on Saturdays eating at home, and Sundays having a roast at home.
It’s a pity to say that the simple solution is really to stop eating at restaurants and going to coffee shops. Some would rather do their work at home and make their own coffee.
Restaurants play a very important place, as do coffee shops, in people’s lives. But it’s getting harder for people to go eat out. And it’s getting crushingly hard to run a profitable restaurant or coffee shop.
The numbers behind the squeeze
The anecdotal pain matches the official data. In May 2026, income from restaurants and coffee shops was down 1.7% year-on-year in real terms, and they were the biggest drag on the broader food-and-beverage sector, which itself fell 0.3%. Over the three months to May, food-and-beverage income dropped 0.2%, again led by restaurants and coffee shops. June made things worse: month-on-month, total food-and-beverage income fell 1.7%, with restaurants and coffee shops recording the largest decrease at ?3.5%. Earlier in the year, in April, restaurant and fast-food income fell 3% month-on-month and 2.1% year-on-year for the whole food-and-beverage industry; restaurants and coffee shops were again the worst-hit segment, down around 2.2%.
This isn’t a one-month blip; it’s a sustained contraction through the first half of 2026. And it aligns with the closures we’ve seen: well-known Western Cape venues such as Root44 Restaurant and One Park, and award-winning city spots like ëlgr on Kloof Street. Not every closure is purely demand-driven, but the pattern fits the Stats SA income declines and operator commentary about “subdued consumer spending” and “tighter household budgets”.
Why fewer people are eating out
The drop isn’t just about “high food prices” at the till; it’s a squeeze from both sides: weaker consumer purchasing power and sharply higher operating costs for restaurants.
1. Consumers are under cost-of-living pressure
Analysts and Stats SA link the decline to weakening consumer spending as households prioritise essentials (housing, transport, education) and cut back on discretionary items like dining out. Key drivers:
- Stagnant wages vs inflation: Over the 2011–2022 period, median wages rose only about 0.2%, while inflation averaged around 5.13%, eroding real incomes.
- High food inflation: Food and non-alcoholic beverages inflation was still around 3.6% year-on-year in March 2026, with meat, fish, eggs, fresh produce and starchy foods making up most of household food costs.
- Higher utility and transport costs: Eskom’s 8.76% tariff hike for 2026/27 and sharp fuel price increases (e.g. 36% for some diesel grades, 8% for unleaded 93 in April 2026) feed into both grocery bills and restaurant prices, further squeezing disposable income.
The result: many consumers are switching to cheaper options, reducing meal sizes, or cutting back on eating out entirely.
2. Restaurants’ costs are rising faster than they can pass them on
Industry commentary highlights that restaurants now need 10–15% annual revenue growth just to maintain the same profitability, because their costs are rising so fast. Major cost pressures include:
- Electricity and municipal charges (Eskom tariffs, local authority rates)
- Food input costs (inflation in meat, produce, staples)
- Wages and compliance costs (minimum wage adjustments, regulatory requirements)
- Fuel and logistics (affecting deliveries and supply chains)
These increases have often outpaced consumer inflation, compressing margins and forcing some operators to raise menu prices, reduce portions, or close if they can’t cover costs.
3. Shift in how people eat out, not just whether they eat out
Stats SA and industry reports note a divergence within the sector:
- Takeaway and quick-service formats have held up relatively better.
- Traditional sit-down restaurants and coffee shops have seen the steepest declines.
This suggests some consumers still want “eating out” experiences but are opting for lower-cost, faster, or more value-oriented options.
So is it the high price of food?
Partly, yes—but more precisely:
- High and rising food prices (at home and in restaurants) are a major factor, driven by food inflation, electricity, fuel, and logistics.
- Weak real wage growth means those higher prices bite harder, so households cut discretionary spending like dining out.
- Restaurants’ own cost explosion makes it hard to keep prices attractive while staying profitable, leading to closures that further reduce supply and consumer confidence.
In short: fewer people are eating out in 2026 because real incomes are under pressure and eating out has become relatively more expensive, while restaurants themselves are struggling with costs that are rising faster than the revenue they can generate.
