KATE EMERY paid $7.80 for a coffee from Goanna Bush Cafe but there’s more to the story than cost complaining

This week I paid $7.80 for a coffee. Technically it was an oat-milk mocha.

You might find one or both of these things disgusting.

But behind that $7.80 coffee is the story of why WA cafes and restaurants are on the bones of their arse, even as business booms. And the cost of that coffee is just the canary coughing up coal dust.

The story starts in Quindalup, where I had brunch at Goanna Bush Cafe on WA Day. You can read my review in next Sunday’s STM, but the short version is this: Goanna Bush Cafe does the best brunch in the area. Go there.

Where things got interesting was when I ordered a takeaway for the drive to Perth. Upon hearing the words “that’ll be $7.80”, I paid with the nonchalance of someone who fears being perceived as a tight-arse, while silently wondering if my cup would be inlaid with opals or diamonds.

As a journalist who has written my fair share of “is this WA’s most expensive cup of coffee” stories over the years, I’ll admit I also felt a minor professional thrill. Could this, in fact, be WA’s most expensive cup of coffee? And, if so: why was it so?

The answer to that question gave me fresh appreciation of the razor-thin margins in WA hospitality right now. The industry faces the same challenges as over east, where Neil Perry and others are sufficiently concerned that they’ve formed the Australian Restaurant and Cafe Association to campaign for changes to migration, tax and industrial relations. Watch this space.

Goanna Bush Cafe is owned by husband and wife team Duncan and Ali Timmons. And when I asked Duncan about the need to take out a small bank loan to pay for my coffee, he very graciously talked me through the realities of running a cafe.

For starters, Monday was a public holiday and Goanna Bush Cafe applies a 20 per cent surcharge. That’s supposed to offset the higher wages paid to staff, but it really doesn’t. That surcharge brings in an extra $1700 or so, but the extra penalty rate cost of public holiday wages is closer to $2500, so they’re already about $800 behind.

That’s before you get into the cost-of-living crunch, which is pushing prices for everything from milk to electricity higher. Wages are also up: in two years the percentage of the cafe’s revenue that goes on wages has increased from 38 per cent to 43 per cent. On Duncan’s numbers, bearing in mind that no two businesses are the same, a sustainable cafe needs to keep wages to 38-40 per cent of revenue, with food costs accounting for 28-30 per cent and fixed costs, such as utilities, at 20 per cent.

The aim is to keep the cafe’s profit margins at 10-12 per cent to be sustainable long term and, frankly, make some money for the family pouring their blood, sweat and tears into it. Lately, Goanna Bush Cafe’s margins have been cut by as much as half.

“We feel very lucky that WA has not got to the point, like a lot of Eastern States small businesses in the hospitality industry, that are failing financially or voluntarily closing by the week, but I think we will see it happening,” Duncan told me, right about the time I was starting to wish I’d left a tip.

“We currently feel very exposed . . . having been in the business at Goanna for 15 years and having come from a degree in business studies and a dad who is an accountant, I am a realist in terms of the numbers needed to survive and I’m still terrified of increasing prices in this current climate for my customers, but probably worse is what is coming if I don’t.”

Back to that $7.80 coffee, which Duncan agrees is “just too much”.

Part of it is the surcharge, a $1 extra charge for oat milk and $1 extra for a 12oz (340g) takeaway, which isn’t a core part of Goanna’s business. Part of it is down to the fact Duncan admits he’s never sat down to work out just how easily those extra costs might add up. He’ll take a look at that.

By the way, while nobody wants to hear this: WA coffee prices are cheap by international standards.

This isn’t a “gotcha” story about one cafe charging a lot of money for one coffee: the kind of yarn that goes off on social media because everyone loves a whinge. It’s about how rising costs are hurting cafes and restaurants just as much as they’re hurting those of us who love to complain about the rising cost of going out to eat and drink — which can include myself. Although, having written 800 words on the subject, at least I can put that $7.80 through on expenses.