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Australia is a nation of coffee drinkers and café lovers. While the unrelenting cost-of-living crisis might suggest we’d be forced to give up our daily macchiato, our spending habits tell another story.
Despite household budgets feeling the pinch, new NAB data reveals Australians are still finding room for life's little pleasures. Spending at cafés, restaurants and pubs rose 7.6 per cent over the past year, with hospitality now accounting for one in every $10 spent nationwide.
It's welcome news for hospitality businesses navigating rising operating costs, and proof that even during tougher times, Australians support their local dining and drinking holes.
And it's not surprising. When eating out at a fancy-schmaltzy fine diner feels a little out of reach, it's often the smaller – more affordable – pleasures that Australians are willing to splurge on.
So, which states are leading Australia's dining-out boom?
Western Australia takes out the top spot, recording the strongest annual growth in café, restaurant and pub spending at 8.5 per cent. The Northern Territory follows closely behind at 7.8 per cent, while New South Wales and the ACT share third place with growth of 7.1 per cent.
The appetite for dining out shows no signs of slowing either. Café and restaurant spending rose 2.9 per cent in May 2026, outpacing overall consumer spending growth of 1.1 per cent.
NAB Head of Small Business Victoria Dario Medugorac says businesses that can adapt quickly while keeping costs under control are best placed to thrive. "Australians are still finding room for cafés and restaurants, even as budgets tighten," says Medugorac. "What we are seeing is more selective spending, and businesses that move quickly are the ones winning it."
That sentiment is echoed by Café Carlton owner Mert Sengul, who says social media trends are increasingly shaping what customers order. His café now sells five speciality drinks (think crème brûlée matcha or Earl Grey matcha) for every traditional coffee like a flat white.
"You have to move fast," he says. "We saw the New York Dot Cake take off online over a weekend, made it on Monday and were selling it by Tuesday. If you don't act, you miss out."
Australia's year-on-year growth in café and restaurant spending
- Western Australia: 8.5%
- Northern Territory: 7.8%
- New South Wales: 7.1%
- Australian Capital Territory: 7.1%
- Tasmania: 6.7%
- Queensland: 6.6%
- South Australia: 6.6%
- Victoria: 5.9%