The $11b splurge: Kiwis and tourists spending more on dining out, drinking and takeaways

Aucklanders and visitors to New Zealand's biggest city spent $4.33b on food, drink and takeaways during the year. Photo / Jason Oxenham.

Kiwis and tourists splurged a record $11 billion on dining out and takeaways over the last year and on average seven new hospitality businesses are opening every day.

Sales among these businesses were up by 3.6 per cent in the 12 months to March, according to a Restaurant Association report.

The data, crunched by Statistics New Zealand, showed that takeaway shops had enjoyed the best growth, with sales expanding by 5.7 per cent in the year.

That represented a jump of $148 million in sales, slightly ahead of the $138m which the restaurant and café sector grew its revenue by.

Finding skilled staff is the number one worry among Kiwi hospitality businesses, Restaurant Association chief executive Marisa Bidois says. Photo / Doug Sherring.

There are now more than 17,000 hospitality businesses in New Zealand and there are seven new outlets opening every day.

That was offset by businesses closing but 530 more outlets opened their doors for the first time than shut them for good in the year.

That growth is putting pressure on the industry – which employs 130,000 people in New Zealand – to find staff.

"Hospitality business owners rank their number-one challenge as the lack of skilled employees, followed by managing wage costs," Restaurant Association chief executive Marisa Bidois.

"This competition for skilled employees has the potential to drive wage rises in some regions … wages continue to rise beyond customers' expectations of price rises and that's a challenge and balancing act that hospitality business owners face," she said.

Bay of Plenty chalked up the highest spending growth, with consumers splashing out on $592.5m on hospitality in the year to March (up 6.8 per cent).

Aucklanders and visitors to New Zealand's biggest city spent $4.33b on food, drink and takeaways during the year.

That was up 5.1 per cent on the year before.

PAY PRESSURE

The association, in its report, says minimum wage rises was a major concern for many hospitality businesses.

The Government put up the minimum wage by to $16.50 an hour from April and is planning to increase it to $20 an hour by 2021.

This would leave New Zealand with one of the highest minimum wage rates relative to average income in the OECD," the association said.

"The main impact will be to improve New Zealand's lowest-paid workers, at the expense of business profits," it said.

"While other industries may be able to alleviate labour cost increases by further
automating their service, the personal connections made as part of the hospitality service offering come with a heavy reliability on labour. Many members are concerned that they will simply not be able to afford the roll-on effect of the increase," the report said.