Spending lifts at cafes, restaurants as restrictions ease

Tuesday, 5 April 2022

Spending in the hospitality industry has risen, but is still down compared to this time last year.

Easing restrictions are prompting New Zealanders to spend more at their local cafes, restaurants and bars, new data shows.

Data released by Worldline, formerly Paymark, shows that spending through hospitality merchants increased steadily over the last four weeks of March.

But the monthly total of nearly $700 million was still down 16.3 per cent on March last year, when lockdowns were not in effect and Covid case numbers were low.

Worldline's head of data, George Putnam, said tough trading conditions still remained. Hospitality spending was still down on pre-Covid levels by 26 per cent in March, but the gap between 2019 and 2022 narrowed significantly during the month, with hospitality spending in the last week of the month narrowing to a 15 per cent decline.

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“There are encouraging pockets of recovery, and hospitality especially is one of these,” he said.

“As international travel rules continue to ease further in the months ahead, the yardstick will be how well businesses are doing relative to pre-Covid levels,” Putnam said.

Spending in the rest of the core retail sector reached $2.9B in March, which is up 2.5 per cent on last year, and up 10 per cent on pre-Covid levels.

On Monday, the hospitality sector called for more clarity on when the country would move to the orange setting.

Prime Minister Jacinda Ardern New Zealand said the country would remain in red for now but another review would happen on April 14.

At orange, there would be no limit on the number of people allowed at gatherings.

Meanwhile, spending in the rest of the core retail sector reached $2.9 billion in March, which is up 2.5 per cent on last year, and up 10 per cent on pre-Covid levels.

Putnam noted the patterns could be markedly different for groupings of merchants.

Shops selling hardware, appliances and furniture experienced 23 per cent more spending relative to March 2019, he said.

But spending was below 2019 levels at booksellers, and clothing and footwear merchants.

In the regions, spending in Otago was below pre-Covid levels, down 1.9 per cent, but Taranaki had three-year spending growth of 25.4 per cent.

Managing director for First Retail Group Chris Wilkinson said consumer confidence had grown as people came to terms with the Omicron outbreak.

“In the past few weeks we've also seen increased activity in our main centres as corporates and Government departments begin to encourage people back to the office.'

Half-price public transport fares had also helped encourage people back out.

“Hospitality is also seeing some 'feel good' spending and communities rally around their favourite cafes and bars - recognising that supporting local is especially important.”