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While the New Year started with a modest overall rise in consumer spending at Core Retail merchants, spending in the Hospitality sector over the busy summer holiday period in January ran below year-ago levels.
Data released by Worldline NZ shows consumer spending through Core Retail merchants (excluding Hospitality) in its payments network was $3.07B in January 2024, up +3.9 per cent on January2023.
Meanwhile, consumer spending through Hospitality merchants in Worldline’s network reached$1.02B in January 2024, which is down -1.4 per cent on January 2023.
The Hospitality sector includes cafes and restaurants, bars and clubs, fast food outlets, and accommodation such as hotels and motels.
Worldline NZ chief sales officer Bruce Proffit says this may not have been the summer many of these merchants were hoping for, especially given the growing number of visitors to the country.
“While the spending through Core Retail stores is better than the +0.4 per cent annual growth rate reported for December 2023, it remains a very modest increase when considered alongside the trading disruptions that occurred in January 2023 and ongoing higher consumer prices.
“Spending through Hospitality merchants is typically high from November through to March, with the peak in December. December 2023 was the peak so far, but Hospitality spending through our network was down 0.1 per cent on year-ago levels in December and now is down again in January.”
Bruce says the lower January 2024 Hospitality spending occurred despite the disruption to trading activity that was caused by extreme weather events in late January 2023 – and that both summer months are down despite more visitors coming to New Zealand over this time.
“Some regions – Wellington, Marlborough and Otago – are even experiencing spending that is below the pre-COVID levels of January 2019, while spending growth in the South Island merchants remains lower than in the North Island,” says Bruce.
Spending at Hospitality merchants through Worldline NZ’s network was 9.3 per cent above January 2019 in the North Island but up only 3.8 per cent in the South Island.
A quick look at Hospitality throughout 2023 shows total spending through Worldline NZ’s network for these merchants was $11.7B over the 12 months, up +7.5 per cent on 2022 and +7.3 per cent on 2019. The annual growth rate was high in early 2023, due to the COVID-affected baseline, and ended negatively in December.
The regional growth for Core Retail merchants (excluding Hospitality) in January 2024 was highest in Whanganui (+8.0 per cent) and Waikato (+7.3 per cent) and lowest in Southland (-5.3 per cent).