Cafes are continuing to see their profits squeezed.

Sales in the hospitality sector have increased 1.4% in the past year according to just-released figures from the Restaurant Association.

But sales for cafes and restaurants only rose 0.3%.

Coffee Club Director Brad Jacobs told Ryan Bridge they're having to absorb rising costs to remain competitive.

He says the minimum wage has gone up much faster than the price of coffee over the past decade.

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