Christopher Adams

The Business Herald’s markets and banking reporter.

Kiwis starting to dine out again

Sails restaurant owner Bart Littlejohn says he is feeling positive about the future. Photo / Paul Estcourt
Sails restaurant owner Bart Littlejohn says he is feeling positive about the future. Photo / Paul Estcourt

Consumer spending figures released last week paint an improving picture of the hospitality sector, but industry groups say trading conditions remain tough and are likely to stay that way until a major improvement in the economy takes place.

Paymark, which processes about 75 per cent of electronic card transactions in this country, said spending at cafes and restaurants rose 9.3 per cent last month, compared with June 2011.

And figures released by Statistics New Zealand on Tuesday showed a 3.1 per cent lift in hospitality spending in June. It was the biggest rise of the four core retail sectors, including consumables and apparel, covered by Statistics NZ's electronic cards data.

ASB economist Christina Leung said the increased hospitality spending was "fairly encouraging" and suggested households were starting to eat out again.

"Overall, household discretionary spending looks to be undergoing a recovery," Leung said. "Nonetheless, we expect the recovery will remain gradual, reflecting the continued caution among households."

Hospitality New Zealand chief executive Bruce Robertson said there was not a widespread feeling within the industry that trading conditions were improving and many businesses would be surprised to see the rise in spending shown in the electronic cards data.

"I think the industry's view would be that the market's still pretty tight and people are still being careful about their spending," Robertson said. "[Consumers] are concerned about the future and they're concerned about what's going on in Europe. They are taking the Government's advice and paying down debt."

He said hospitality businesses needed to deliver what the market demanded and cafes offering budget meals were doing "reasonably well", as were some top-end restaurants where people went for special occasions.

"The industry is coming to terms with discerning customers that are careful about where they spend and what they get for it," Robertson said.

Auckland restaurateur Bart Littlejohn, owner of Sails restaurant in Westhaven marina, said revenue at his establishment did increase in June, but that was mainly due to a special offer on daily deal website GrabOne.

However, Littlejohn said there had been some underlying sales growth last month and he was feeling positive about the future.

"Overall, things are looking pretty good."

Restaurant Association of New Zealand chief executive Marisa Bidois said many of her organisation's members were "still struggling along".

"But we are getting reports of a bit more spending happening in the last couple of months."

She said a big improvement in the economy was needed for the sector to really get back on its feet.

Littlejohn said he was sure trading conditions would return to pre-global financial crisis levels at some point.

- NZ Herald

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