Kiwis and tourists still dining out despite inflationary pressures

Saturday, 20 May 2023

Punters pack Christchurch bar Moon Under Water, in the suburb of Beckenham, on Friday evening.

While experts urge spending restraint and the Reserve Bank attempts to enforce a spending slowdown, there’s no lull in Cantabrians’ desires to eat, drink and be merry.

Data from the Worldline electronic payments network shows Canterbury hospitality spend was $106 million in April – up 13% on April last year and 11% on April 2019.

Other regions had bigger increases, including Otago (up 29%), Southland (up 31%), the West Coast (up 20%), Auckland/Northland (up 13%), Marlborough (up 15%) and Whanganui (up 11%).

The Birdwood Eatery and Pizzeria just celebrated its 5th anniversary in Beckenham, and owner Sarah Freeman says a strong community connection will help assuage the impacts of a recession.

Only two regions saw drops in April spending: Gisborne (-3%) and Wairarapa (-2%).

Canterbury’s hospitality industry was already coming off a positive 2022, with new venues opening and a record annual spend.

The Birdwood Eatery and Pizzeria owner Sarah Freeman said hospitality always had “peaks and troughs”, but this year had been particularly busy.

Oxford Group owner Max Bremner says the impact of inflation and any potential recession varies depending on location and clientele. (File photo)

She hoped hospitality was “starting to thrive again”, after a tough couple of years due to Covid and cost of living increases. She described the time as operating in “survival mode”.

There had definitely been more international visitors in recent months, though Freeman said the Birdwood’s suburban locale meant it didn’t rely on tourists as much as eateries in the CBD.

Oxford Group owner Max Bremner said business had been “really, really solid” from late last year until about two weeks ago, especially for the company’s accomodation offerings.

“Obviously our businesses in the inner city have been boosted tremendously by cruise boats and things at Te Pae.”

The downturn in recent weeks was to be expected as colder weather set in, but upcoming accommodation bookings remained strong, he said.

Labour shortages were still “difficult”, but the Oxford Group – which includes several city bars and restaurants, as well as The Bealey Quarter and Craythorne’s Hotel in Halswell – had the advantage of being able to move employees around to meet demand, Brenmner said.

The impact of high interest rates and other inflationary pressures manifested differently depending on clientele and location, he said. For instance, business at the company’s Oxford Tce venues tended to be driven by younger people without mortgages.

Double Dribble Hospitality Group director Mia Zhao said business was improving but increasing costs are taking a toll (File photo).

“They’re kind of recession proof.”

Addington Coffee Co-op general manager Adrian Palmer said this year had been particularly busy, although he was not sure if it was a post-border-reopening bounce, or a last hurrah before recession kicked in.

“In Christchurch at least, there’s been a real buoyancy in hospitality, it feels like people are making up for lost time, or for what might come later in the year.”

The Curators House restaurant has attracted tourists and locals alike for more than 20 years, and owner Jackie Garcia-Knight says they’re not yet seeing much evidence of a looming recession. (File photo)

It had been a good summer with the welcome return of tourists, but inflation had led to wage increases just as price increases by suppliers also started to hit, Double Dribble director Mia Zhao said. The company runs several eateries across Christchurch, including Midnight Shanghai, Muy Muy and Sushi Soldier.

“While the business is going a little better, the money has stayed the same because all the costs have increased.”

Staffing pressures had let up though, with an influx of working holiday-makers and strong numbers of local jobseekers, she said.

Curator’s House owner Jackie Garcia-Knight said the restaurant had seen a definite “post-Covid bounce” with the return of tourists.

Restaurants, bars and cafes are helping each other out as the staffing shortage continues to upset rosters. Even friends and family are helping out. (Video first published August 5, 2022)

There was always a downturn at this time of year though, as the summer tourist boom ended and outdoor eating became less feasible, she said.

She had not heard customers voicing fears of a recession, but thought spending restraint and cost of living concerns could possibly “show as the year goes on”.

Moon Under Water owner Matt Kamstra said his Somerfield craft beer pub was faring well, but the impact of cost of living pressures varied depending on the type of venue.

The suburban pub relied more on locals than tourists, and had benefits from more people working from home.

“In many ways that advantaged us in the suburbs – people said look, it's three o'clock in the afternoon, I’ve done the work I need to do for the day, I’m going to the pub.”

His city venue, Twelve Bar, had seen “a bit of a downturn” in the amount people were spending though.

Last month, Restaurant Association chief executive Marisa Bidois warned restaurants were being hit by labour and food price increases. Menu prices and a reduction in the number of dishes offered were likely.

StatsNZ’s April food price index showed rises across all food categories.

Grocery food prices were up 14%, fruit and vegetables were up 22.5%, restaurant meals and ready-to-eat meals were up 9%, meat, poultry, and fish prices increased by 9.5% and non-alcoholic beverage prices were up 8%.