Looks like the CBD’s lost its shine. New research from Square has revealed Australians are spending less time (and money) in city centres and more in their own backyards. Good news for neighbourhood businesses.

According to Square’s latest report, the days of the city being the main drawcard for dining, shopping and hanging out are behind us. Instead, Aussies are embracing what Square calls a ‘Neighbourhood Nation’ where suburban spots are now the go-to for eating, drinking, socialising and shopping.

The shift away from the CBD

The numbers tell the story. Only nine per cent of Aussies say they feel more connected to the CBD than five years ago, while a whopping 54 per cent feel more connected to their local neighbourhoods.

Two in five people admit they visit the CBD less than once a month, and almost one in five avoid it completely. That’s not great news for city landlords, but it’s a win for small businesses closer to home.

Working from home has played a big role in the shift. With around a third of Australians regularly logging in from their kitchen tables, local cafés, bakeries, gyms and cinemas have become the new hubs of daily life.

Loyalty lives local

The data shows customers are not only choosing their local businesses more often – they’re also sticking around.

In Sydney, 4.5 per cent of neighbourhood customers made three or more repeat purchases in the first half of 2025, compared to 4 per cent in the CBD. Melbourne locals were even more loyal, with 4.6 per cent returning to suburban spots versus just 3.8 per cent in the city.

It might not sound like a huge difference, but those repeat visits add up.

“You become part of people’s weekly rhythm when you are their go-to barista, baker or neighbourhood favourite,” said Square’s Head of Business Development, Colin Birney.

It’s not just driving loyalty; locals are spending more, too. In Melbourne, the average food and drink spend was $15.15 in non-CBD areas compared to $13.53 in the city. In Sydney, suburban spend came in at $14.52 versus $12.87 in the CBD.

So while a CBD worker might dash in for a quick sandwich, your neighbourhood customers are more likely to linger, order the extra coffee or grab dessert.

 The shift to local

This move towards local life is your chance to make your business your suburb’s MVP.

Make people feel like regulars. Remember names, personalise offers, and give them reasons to keep coming back.

Weekends are when the suburbs really buzz, so think menus, specials or events that make locals linger longer than a quick lunch. Aussies love a place with heart, so flaunt your local roots and show you’re part of the community.

Don’t forget to use your data. Your payment system can spill the beans on who’s coming back, what they’re buying, and how to turn casual visitors into loyal locals who wouldn’t dream of going anywhere else.

Suburbs to watch

Some neighbourhoods are already standing out for repeat custom. In Melbourne, The Basin, Parkville and Keilor Downs topped the charts. In Sydney, Avalon, Dee Why, and Willoughby were the ones to watch.

Meanwhile, inner-city hotspots like Potts Point and Surry Hills recorded some of the lowest repeat business, highlighting just how much the pendulum has swung to the suburbs.

The CBD might still have the bright lights, but the suburbs are where Aussies are putting their wallets. For small business owners, that’s a chance to thrive closer to home and to become the kind of local favourite people don’t just visit, but return to week after week.

“The sellers building the strongest businesses today are those investing in long-term, local relationships,” concludes Birney.

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