New Zealanders spend up on eating out as economy recovers

Tuesday, 10 November 2020

New Zealanders spent more dining out in October then they did during the same period last year, Stats NZ said.

Spending at restaurants, cafes and takeaways in October was up $79 million, or 8.8 per cent, compared to the same month last year.

The monthly spending data from Stats NZ revealed the second-highest monthly spend for food and beverage services in over 20 years, almost as high as the Christmas peak last December.

But the October card spending picture was not completely positive.

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**

Stats NZ business statistics manager Sue Chapman said spending on hotels, motels, and other accommodation was down $46m, or 22 per cent, compared with October last year.

“The lack of international visitors is still hampering the accommodation industry, despite a small recovery in October, coinciding with the return to alert level 1,” Chapman said.

Despite warnings that the post-lockdown sugar rush would wane, card spending on long-lasting goods (durables) had the largest retail industry rise, up $244m, or 17 per cent from the same time last year.

The rise in durables was mainly driven by furniture, electrical, and hardware retailing, up $138m, or 20 per cent, over the year to the highest October month value since the series began, Chapman said.

“Long-lasting goods businesses saw sales increases in items such as gardening and outdoor furniture as well as camping and sporting goods,” Chapman said.

“People are setting up their homes, gearing up for fun summer activities and domestic travel, using money that may have been spent on overseas travel.”

Total retail card spending for the January to October period was $54.4 billion in 2020, down 0.9 per cent compared with $54.9b last year.

Comparatively, from 2018 to 2019, there was a 2.5 per cent increase in spending.

“Several months of higher retail spending have almost made up for record low spending in April, though some industries have fared better than others,” Chapman said.

The only industries to see falls in October were fuel and non-retail.

Fuel was down $65m, or 11 per cent, over the year, mainly reflecting lower petrol prices.

Non-retail, excluding services, was down $244m, or 13 per cent.

This category includes travel and tour arrangement services heavily affected by international border restrictions, rental and hiring services, and gambling.

ASB senior economist Mark Smith said three factors underpinned the October spending numbers.

“One is that October was the first month since July that the alert level was level 1. So there was certainly pent-up demand being reflected in the October figures,” he said.

“The second one is that the school holidays took place during the October month and anecdotes were very strong that there was a lot of domestic tourism. The last thing is, the housing market has been robust. People are probably feeling confident, and they are turning that confidence into spending.”

But he was cautious about the ability of New Zealanders to continue to spend at record levels.

The continued closure of New Zealand’s borders had a significant impact on tourism, he said.

More significantly, while the labour market had held up, the unemployment rate was set to rise.

“That means consumers will probably be less willing to spend, and less able to spend as given income reductions.”