Cafe owner who sells one of Sydney’s ‘cheapest flat whites’ reveals the staggering $50k toll of refusing to raise prices on his struggling customers: ‘On our knees’

A Sydney cafe owner who sells some of the cheapest coffee in the city’s east – $4.50 for a small flat white or a latte – says he lays awake at night worrying about having to raise his prices. 

Dave Martin, who has run The Courtyard in Coogee for 15 years, said he is absorbing an extra $1,000 per week in costs on the likes of insurance premiums, wages, electricity, gas and supplier prices, as well as the recent card surcharge ban.

The businessman employs 14 people and said small businesses like his are ‘on their knees’, with owners forced to choose between passing rising costs on to customers who were already struggling or accepting shrinking profits.

‘You’d think after being here for 15 years, I’m well entrenched in the community, it’d be easier for me, but it’s not. It’s just getting harder and harder,’ he told the Daily Mail.

Dave said he now received emails from suppliers announcing price increases almost every week or fortnight, leaving him unable to adjust his menu quickly enough to cover the additional expenses.

‘If I put my prices up every time I got an email, then there’d be no one coming through my door,’ he said.

Dave explained that the problem was particularly difficult because his customers were also feeling the pressure of Australia’s cost-of-living crisis. 

While his own expenses were rising, he was increasingly conscious that many diners could no longer afford to spend as much on eating out.

‘To try and charge people who are also doing it tough, in accordance with the money that you should be making, it’s impossible,’ he said.

Rather than immediately passing on the latest increases, Dave has been absorbing approximately $1,000 a week in additional costs. 

He estimated the expense could amount to roughly $50,000 over a year if it continued.

‘I’m going to have to put my prices up eventually. I lay awake at night worried because I don’t want to lose customers.’

His concerns are particularly acute when it comes to coffee, with fierce competition between cafes in the area. Dave estimated there were 23 coffee shops operating within a kilometre of his business.

While he has gradually increased food prices, sometimes adding a dollar to menu items every six months, he has been reluctant to make similar changes to the beverages.

‘We basically just wear it. Our profit margins just get smaller and smaller,’ he said.

The financial pressure has also forced him to rethink the food he serves. Where customers once regularly ordered substantial breakfasts and larger lunch dishes, Dave said many were now choosing cheaper options. 

As a result, he has reduced the number of expensive dishes on the menu and introduced more affordable takeaway food.

But while customers can cut back on eating out, Dave said cafe owners have little control over many of their biggest expenses.

He claimed workers’ compensation insurance alone cost his business $700 a week, despite never having made a claim during his 15 years of operation.

Other insurance premiums, gas, electricity and delivery charges have also risen, with Dave saying additional fuel surcharges were appearing on supplier invoices.

‘You get your delivery, and there’s another surcharge on there. It’s just literally one thing after the other.’

He believes many customers underestimate how much it costs to keep a cafe operating because they only see the final price on the menu – not what’s going on behind the scenes.

Dave said the challenge was finding enough money to cover every obligation while keeping the business running.

‘Minimum wages have gone up, which I understand. I don’t begrudge paying anyone,’ he said.

However, he was concerned about the cash-flow implications of more frequent superannuation payments, which he said would leave less flexibility to manage other expenses.

‘Before it was quarterly, you could kind of work towards putting it aside for three months,’ he said.

‘Now, that has to go to the top of the list, so everything else suffers. Supplies, and my personal wage goes down, obviously.’

Under Australia’s Payday Super reforms, employers are required to pay superannuation alongside wages from July 1, 2026, replacing the previous quarterly payment arrangements.

Dave said the greatest irony was that while he was responsible for paying his employees, he could not always afford to put money aside for his own retirement.

When asked whether he contributed to his own superannuation, he replied: ‘No. A lot of small business owners don’t. We neglect ourselves first because we can’t afford it. We’re the last ones to get paid, last ones to get super.’

He explained that his financial priorities were straightforward: rent, staff and suppliers came first, with his own income being whatever remained.

He is also concerned about potential changes to disposable takeaway coffee cups, although he acknowledged he was unsure whether the proposals would proceed. (The NSW government backflipped on its plan a week after the legislation passed parliament). 

He said any requirement for cafes to provide reusable cups themselves could create further expenses and slow down service.

‘At the moment, we take keep cups gladly, obviously, like everyone else. But if we have to be supplying keep cups and handing them out, that’s just ludicrous.’

Dave believes governments have underestimated the cumulative effect of rising expenses and regulatory changes on small businesses.

‘I just feel like this government’s so out of touch with the way small businesses are being run,’ he said.

‘All small businesses are on their knees at the moment, and I feel like they’re just kicking us while we’re down.’

Despite his frustration, Dave was careful not to portray himself as a victim. He acknowledged that his cafe remained busy and that many other hospitality operators were in a far more precarious financial position.

He also stressed that he did not want customers to feel responsible for the difficulties facing hospitality businesses.

‘I don’t want anyone’s pity or anything,’ he said.

Instead, he hoped people would understand why cafes sometimes had little choice but to increase their prices.

After 15 years in business, Dave said the biggest change was how difficult it had become to make a reasonable living, even with loyal customers and an established reputation.

‘It’s just the fact that costs are so high. It’s just getting harder and harder,’ he said.