In the past few months, surging inflation in Sydney has hit home businesses hard, forcing local catering and tuition services to adapt with innovative solutions to survive the rising costs and shrinking budgets.
The inflation rate in Sydney has exceeded historical norms by a considerable margin. According to the statistics released by the Australian Bureau of Statistics, over the twelve months to the March 2024 quarter, the Consumer Price Index (CPI) rose 3.6%, primarily due to the mounting costs of fuel, housing, and food. This inflationary trend is placing strain on household budgets and influencing consumer spending patterns.
For home-based catering enterprises such as “Ponds Catering,” there has been a significant surge in the cost of primary resources. Key components like meat, dairy, and vegetables have experienced an escalation in prices ranging from 15 to 25 per cent. Moreover, these expenses are compounded by the escalation of fuel costs, which have a direct effect on the conveyance and distribution of products
Satya, owner of “Ponds Catering,” articulates, that she is in constant search for the groceries that are affordable and will allow her to break even. “The rising cost is making it harder for me to quote an appropriate price for my orders as it now depends on how much the groceries are for that day.”, Satya said.
As the phenomenon of inflation exerts its impact on disposable incomes, a trend is emerging where consumers are displaying an inclination towards more prudent financial habits. This shift in consumer behaviour is notably conspicuous within the realm of discretionary expenditure, encompassing areas such as dining outside the home, catering provisions, and individualised educational instruction.
Households are opting to allocate their resources towards indispensable outlays, consequently resulting in a contraction in the market demand for non-essential amenities.
Meena, owner of “Meena’s Tutoring,” mentioned that the increase in inflation has caused her clients to lose their jobs, causing them to either stop paying her for their children’s tuition or stop them from getting the tuition they need.
“They would call me and tell me that they can’t afford to pay for their child’s tuition expenses. I have been teaching these kids since they were in Year 5. With them being in their crucial Year 12 now, I can’t let them go. They still need help, so I just tell the parents that they can pay when they can. I continue to teach these students. I prioritise my students however the rise of inflation has made it harder for me”, she notes.
Despite the challenges, both Satya and Meena are finding ways to adapt. Satya has started to travel further away to markets that sell much affordable groceries. To curb the transportation cost that she will face due to the travel, she came up with a hitchhike plan with her friends in which she and her friends will share transportation costs to travel to the cheaper markets.
“This allows me to get cheaper materials for my orders, quote my clients a little more affordable prices and my friends that are struggling with the inflation get to also reduce their expenses by a little”, she explains.
Meena, on the other hand, has increased her group classes and online classes. She teaches some students out of pocket right now till their parents can pay her back for the classes.
“Increasing the number of group and online classes allows me to reduce the pricing of my classes for the students. This makes it a little more affordable for the parents. As mentioned I have been teaching some of my students for years now. With Their Year 12 exams coming, I refuse to let them go at such crucial times. The parents know that these times are important and will pay me back once they can financially”, she says.
Both entrepreneurs highlighted the significance of community backing and creativity during these challenging periods. Satya has utilised social networking platforms such as Instagram and Facebook to extend her reach to a wider demographic and interact with her customer base.
“Instagram has allowed me to meet more people who might be interested in my services. I have friends and previous clients who can support my business through Instagram and advocate for me. I have been getting more clients through Instagram,” she shares.
Meena turns to the community support she has gained throughout the years of her tutoring business to expand her reach even further.
“I have received immense support from the Ponds Community. We have a WhatsApp group, in which they always share about my business with others. They help with my chores in my daily life so I will be able to focus on my tutoring and students,” she mentions.
Economic analysts anticipate a prolonged presence of inflationary forces, propelled by continuous disruptions in supply chains, uncertainties in the global economy, and internal policy influences. The Reserve Bank of Australia has hinted at the possibility of increasing interest rates to alleviate inflation, which could also impact borrowing expenses and consumer purchasing capacity.
With inflation not slowing down anytime soon, home-based businesses like “Ponds Catering” and “Meena’s Tutoring” will continue to persevere to adapt and innovate to survive. The tenacity and innovation demonstrated by these business owners underscore the unyielding determination of small-scale entrepreneurs in Sydney.