Suburbs gain ground as favoured dining hotspot
Two in five diners visit the CBD less than once a month, and 20% avoid it altogether.
Australians are spending more at neighbourhood restaurants than in city centres, a trend that could push quick service restaurants (QSR) to rethink their growth strategies.
Repeat purchases are higher in suburban areas than in central business districts (CBD), according to data from payment technology provider Square Australia Pty Ltd. In Sydney, 4.5% of neighbourhood customers made three or more repeat purchases in the first half, compared with 4% in the CBD. In Melbourne, the difference was 4.6% in non-CBD areas versus 3.8% in the CBD.
Consumer sentiment reflects the pattern. Only 9% of respondents said they feel more connected to the CBD than they did five years ago, while 54% reported a stronger connection to their neighbourhoods. Two in five visit the CBD less than once a month, and 20% avoids it altogether.
Colin Birney, head of business development at Square, said these findings do not mean the end of CBD dining. “The CBD remains an important place for dining, whether it’s QSRs serving office workers on the go or high-end venues for special occasions,” he told QSR Media.
“What the data does suggest is that CBD dining tends to be more transient and convenience-led, whilst neighbourhood dining is about connection,” he said in an emailed reply to questions.
He noted that QSRs should build a “neighbourhood-style feel” using tools like tailored recommendations, loyalty programs, and small personal touches that bring local familiarity to busy city settings.
Square also found that customers spend more in suburban venues. In Melbourne, average food and beverage spending was $15.15 in non-CBDs compared with $13.53 in the CBD. In Sydney, suburban spending averaged $14.52 versus $12.87 in the CBD.
Birney said this shows that suburban outings are longer, more intentional and higher value, giving neighbourhood businesses opportunities to build more sustainable customer bases.
He added that neighbourhood restaurants tend to succeed when they create a personal and community-minded atmosphere. “Success will come from how you make customers feel when they walk in, how you reflect the local community, and how you use small touches of personalisation—even something as simple as remembering a favourite order,” Birney said.
In Melbourne, suburbs such as The Basin, Parkville, and Keilor Downs had some of the highest concentrations of repeat customers. In Sydney, Avalon, Dee Why, and Willoughby stood out. By contrast, areas like Potts Point and Surry Hills—near the CBD but outside its core—recorded some of the lowest repeat rates, while Melbourne’s CBD also lagged behind surrounding suburbs.
Vanessa Wilmot, managing director of Australia-based Geotech Information Services Pty Ltd., said the shift to suburban locations for businesses was accelerated by hybrid work models and pandemic-era consumer behaviour.
“Another change that we have seen as a result of the pandemic was a move away from CBD brick-and-mortar locations, focusing instead on suburban and local areas,” she said in an emailed reply to questions, citing work-from-home mandates and hybrid arrangements.
Wilmot noted that suburban sites often offer cheaper rents, appealing to QSR brands seeking expansion, but said location choice should align with the brand’s target market.
She added that suburban opportunities are not uniform, and lower socioeconomic and outer mortgage-belt areas face reduced consumer spending. Understanding each suburb’s demographic profile is crucial because it may require different pricing or special deals to meet local demand, she added.
Community attitudes toward QSR expansion can also vary. Some developments have drawn pushback from residents over traffic, environmental concerns, and market saturation. A fast-food project along the Pacific Highway in Kariong, for example, was approved in May after an appeal, despite 86 objections when it was first proposed in 2023.
Birney said that while large global chains sometimes face opposition, other QSRs succeed by embedding themselves in local culture. He cited Fishbowl, which started in Bondi and built its brand around community partnerships and healthy eating.
“While some communities may resist global chains, community-driven QSRs are often welcomed and can flourish by staying true to local values,” he said.
