The Cheesecake Shop boss Scott Bush looks ahead at the challenges and trends facing Australian businesses in 2024.
1. Proven trends
It was a year of learning and change for many businesses in 2023 in response to economic pressure and uncertainty, and this ‘what works?’ mentality will continue into 2024. Things that have historically worked for established businesses, may not work anymore, and business leaders need to have the courage and creativity to test and learn, so they can innovate to best serve their franchisees and customers.
Businesses with large footprints will likely struggle the most as labour, land and product costs are predicted to remain high. Innovation in these areas will be critical to ensuring brands can maintain a growth mindset.
2. Expansion into regional areas
Australia is in the middle of a population boom with up to 900,000 migrants expected to enter the country by the end of 2024. Naturally, this means we’re going to see significant population growth in our regional towns and cities. This is an opportunity ripe for the picking for franchise businesses and it is something we are acting on. The Cheesecake Shop has a strategic plan to open more than 15 new stores by the end of 2024, with a particular focus on those regional areas and offering more local jobs within the regional communities.
3. Product diversification
Across the globe, in every industry, customers are seeking value. As the cost of living continues to increase this year, it’s critical that businesses stay focused on the perceived and actual value for their product or service. At The Cheesecake Shop, we’re seeing an increase in ‘everyday indulgence’. Consumers are spending smaller amounts more often on single or small serve treats and desserts, which gives us clear direction on product innovation going into 2024 and beyond.
4. Think global, act local
While there are plenty of benefits for start-ups and scale-ups including a small footprint and plenty of flexibility, the current economic climate tends to favour established businesses. The key ingredient to success is having a strong pipeline of talent, treating your people as your most important asset (because they are) and investing in their continued growth and development.
Franchising is in a unique position to be able to scale up and take risks, while still celebrating the added benefits of operating smaller, franchised models in local communities. Definitely all about thinking globally but acting locally.
5. Cost of living
Business owners face a challenging 2024 with interest rate increases, the rising cost of living and talk of a looming recession. Labour, consumables and ingredient costs remain high. Businesses are going to have to work harder than ever to earn and keep their customers as every product and service category fights for Australians’ discretionary spend – everyday basics through to luxury items.
Staying focused on brand image and value proposition, and providing a consistent and quality product, will go a long way to keep your business front of mind for consumers for those everyday indulges in an uncertain economic climate.
At The Cheesecake Shop we are excited to expand in the space of purpose and create more meaningful partnerships and causes into our brand because we understand that connection and community are more of a consideration to both our customers and our team members.
