Auckland, Tuesday 4 July 2017
Spending through merchants providing food and liquor services increased even faster in June than the already fast growth experienced by this sector in previous months. The sector transacted $647.2 million through Paymark, up 11.6% on year-ago levels or 2.0% more than averaged in the previous three months, equivalent to an extra $12.0 million spending.
A large proportion of the additional hospitality spending occurred in the region of a Lions game, around the time of the game. Spending amongst merchants such as bars, pubs, clubs and cafes around games 3 to 8 of the tour, from the Christchurch game (10 June) to the first Wellington game (27 June), increased by $5.1 million or 10.0% over the three days centred on the game, relative to the hourly patterns averaged in May. Holiday effects and insufficient regional disaggregation meant spending effects for the first two games on tour are not readily available.
Subsequent to June, there has also been an extra $2.6 million through Wellington food and liquor services sector on the first two days of July, relative to May, also very likely associated with a Lions game (1 July).
Potentially also related to the tour, there was strong growth amongst Liquor retailing merchants, Specialised food merchants, taxis and the entertainment sector, including casinos. Combining the above food and liquor services with these other associated merchants, a grouping Food, Liquor and Entertainment merchants recorded payments of $904.0 million in June 2017, up 11.3% on June 2016 which is an annual growth rate 2.6% higher than averaged in the previous three months, equivalent to an extra $21.3 million spending.
In dollars terms, the largest extra spending was in Auckland/Northland (up $9.0 million) while in percentage terms the highest boost to growth was in Bay of Plenty (an annual growth rate of 16.6%, up 6.5% from 3-month average).
Elsewhere in the hospitality sector, annual growth was high amongst Accommodation merchants. National spending amounted to $103.8 million in June, up 15.4% annually, effectively extending the period of strong accommodation spending growth. The average of the previous three months was 15.2%.
The extra spending amongst these Food, Liquor and Entertainment merchants and amongst Accommodation merchants was by New Zealand and overseas card holders in June and, while not directly linked to the Lions tour, it is likely that the tour and the extra foreign tourist spending was a key factor behind the higher monthly spend amongst these merchants. There will be other payments also associated with the Lions tour that are not recorded in Paymark figures, including payments through other channels on the day of expenditure (e.g. cash) and payments made in previous months, including for match tickets and accommodation.
In other sectors during June, annual growth rates were generally modest to low. Noteworthy were Furniture, Hardware etc (+3.6%) and Clothing and Footwear (-1.1%).
Across all spending, annual growth rates were highest in West Coast (11.5%) and Bay of Plenty (11.0%) and low in Canterbury (3.3%).
Underlying spending through Paymark increased 0.2% in seasonally adjusted terms during June. On an annual basis, underlying spending was up 6.5%, similar to the average 6.7% achieved in the first 5 months of the year but both figures down on the 8.4% average of 2016.
Key influences on growth patterns include the Lions tour and changing petrol prices. Lower petrol prices were a major influence on spending amongst Fuel retailers being 4.0% lower than in June 2016. The effect of the Lions tour was less clear-cut.
* Large clients moving to or from Paymark within last 12 months excluded from change calculation
With insights that will help you be more profitable and productive, Market Reporting benchmarks your business against the broader industry in which you compete. See why it's used by firms ranging from small owner/operators right through to chains with nation-wide stores.