hospitality report 2014 · 2020. 7. 6. · total new zealand 100,000 100,400 101,870 104,030...

!

HOSPITALITYREPORTEd

ition

4, 2

014

PHOTO: MISS CLAWDY, AUCKLAND

REPORTING ON NEW ZEALAND’S

HOSPITALITY INDUSTRY produced by the

Restaurant Association of New Zealand

!

�2

INSIDE: BY SECTIONIN

SIDE

: BY

SECT

ION

6 THE INDUSTRY AT A GLANCE A top line overview of key industry statistics for quick review. These facts and figures include industry sales growth - year on year and by sector, employment and outlet growth, industry sales revenue and a glance at regional statistics.

10 MARKETPLACE IMPACTS New Zealand’s economic recovery turned to full-blown expansion last year. This section analyses some of the economic impacts affecting hospitality and looks at other influences, like visitor numbers and international trends.

21 CHALLENGES | RESPONSES While the current economic environment is changing, there are still many challenges facing the hospitality industry. This section outlines the top hospitality challenges as identified by industry operators as well as the overall business confidence of the industry.

27 SALES ANALYSIS This section profiles national sales growth trends, national sales revenue per outlet and national sales revenue per employee. !!!!

32 HUMAN ECONOMIC CAPITAL The hospitality industry workforce is expected to grow by 7.7 per cent by 2016. This section tracks wage and salary trends and employee productivity in the current economic climate. !

47

AUT UNIVERSITY INDUSTRY INSIGHTS Articles contributed by AUT University School of Hospitality and Tourism provide some insights into the role of a restaurant reviewer, explore further aspects of the hospitality personality and analyse why do people work in hospitality.

Restaurant Association of New Zealand Hospitality Report 2014

!

56 OUTLET ANALYSIS This section profiles national outlet growth and profitability by outlet for each industry sector. It also outlines patterns of per capita spending per outlet and regional outlet analysis. !

67 REGIONAL BREAKOUTS For easy reference, this section pulls together some of the key statistics and commentary for Auckland, Waikato, Wellington, Bay of Plenty, Manawatu-Wanganui, Canterbury and Otago regions. !!

!!!!!!This report was prepared by the Restaurant Association of New Zealand, with supporting contribution from AUT University, School of Hospitality and Tourism in the “AUT University Industry Insights” section.!PO Box 8287, Symonds Street, Auckland09 638 8403 or 0800 737 [email protected] www.restaurantnz.co.nz

ISSN 2253-2366

PHO

TO TH

IS PAGE & FO

LLOW

ING

: Q TH

EATRE, AUC

KLAND

mailto:[email protected]

http://www.restaurantnz.co.nz

mailto:[email protected]

http://www.restaurantnz.co.nz

!

�3

TABLE OF CONTENTSTA

BLE

OF

CONT

ENTS

4

5

6

10

11

15

16

17

21

22

24

26

27

28

30

32

34

35

37

39

40

47

48

52

54

56

57

61

67

Reading Notes

Introduction and Welcome

SECTION ONE: THE INDUSTRY AT A GLANCE

SECTION TWO: MARKETPLACE IMPACTS

Economic outlook, Felix Delbruck, Westpac

Cost of goods comparison

International tourism market

Local and international trends

SECTION THREE: CHALLENGES | RESPONSES

2014 top challenges

Industry challenged by labour shortages

Business confidence

SECTION FOUR: SALES ANALYSIS

Sales growth data: 2009-2015

Sales revenue per outlet and employee

SECTION FIVE: HUMAN ECONOMIC CAPITAL

Remuneration data: average hourly wage growth 2009-2013

Remuneration data: average salary growth 2009-2013

Hospitality employment growth: national and regional 2009-2015

Getting to know Generation Y, Nicola Richards, Monsoon Poon

Employee productivity: sales and regional insights

SECTION SIX: AUT UNIVERSITY INDUSTRY INSIGHT

The restaurant critic, David Williamson, Lindsay Neil, Alan Brown, William Goodsir, AUT

The hospitality personality, Larry Powell, Auckland University & Lindsay Neil, AUT

Why do people work in hospitality, Shelagh Mooney, AUT

SECTION SEVEN: OUTLET ANALYSIS

Outlet growth data: 2009-2015

Sales per outlet; regional outlet growth and per capita spend

SECTION EIGHT: REGIONAL BREAKOUTS


!

�4

NO

TES

ON

REA

DING

THI

S DO

CUM

ENT

READING NOTES

The information in this report is presented to you in good faith. At the time of research/write-up and publishing the information contained within the report was accurate, and is presented as such. Any omission or error is accidental, and the authors caution readers that any statistical information is, by its nature, open to wider interpretation. Statistics sourced from Statistics New Zealand may have been updated since the 2013 edition, however for consistency the most recent data available is used in the current report. !Graphs and Tables !The graphs and tables provided in this report offer an opportunity to compare, contrast and discuss the different data sets presented throughout the document. Readers are encouraged to make their own analysis, comparisons and conclusions based on the report data. !Real Vs. Nominal Data !Nominal values relate to actual value recorded during the time period in which the data was collected. Real figures are adjusted for inflation. !The data is generally shown over a five year period. This allows for comparison over both dollar value and time.

Some graphs display both nominal and real values - in these instances the nominal values are the figures displayed in black font at the top of the graph, with real values displayed below the blue trend line. !Dates for Statistics !Please be aware of the following when reading statistical information: • Statistics New Zealand sales data is for years ended

March. • Statistics New Zealand annual employment and outlet

data are for years ended February. • Information presented is the most up-to-date available

at the time of press. • Longitudinal analysis has been compiled and

presented to display the largest amount of data available for all data sets. This may result in different growth rates for similar statistics when base years differ. !

Quotations !The report includes quotes from Restaurant Association members. The quotes not only reflect the theme under discussion but also the wider views of the industry. !


PHO

TOS: C

HARLEY N

OBLE RESTAU

RANT, W

ELLING

TON

�5

&INTRODUCTION WELCOMEIN

TRO

DUC

TORY

REM

ARKS Restaurant Association of New Zealand


OUR MISSION We motivate and inspire members to succeed, by providing them with the tools and resources that will help them build customer loyalty, rewarding careers and financial prosperity. !Now and in the future.

In our fourth annual Hospitality Report we are pleased to bear the news that New Zealand’s hospitality sector experienced very encouraging growth from 2013 - 2014 in what looks like the beginning of a stronger, more consistent, growth trend. Nationwide sales for 2014 increased by more than 6 per cent to reach $7.6 billion, with the café and restaurant sector up by nearly 10 per cent. A large number of new restaurants have opened and our members are telling us that trading, while still competitive, is better than it has been for some time. !This year’s report contains key information on the industry - sales growth, outlet performance, employee productivity, analysis on the industry’s top challenges and regional breakdowns. Remuneration trends and international and national trends are also part of the focus for this report. Valuable regional data also provides guidance and information on possible areas of opportunity within these key areas. !The 2014 Hospitality Report is also focused on the industry’s outlook, with projections on all key statistics through to 2015. !The statistics that were gathered reflect input from the Restaurant Association of New Zealand, Statistics New Zealand and various other statistical sources. We are also pleased to continue our collaboration with AUT University’s School of Hospitality and Tourism who have provided the ‘AUT University Industry Insights’ section in this year’s report.

Our annual outlook of the hospitality industry aims to assist the success of your business by arming you with valuable information that can save you time and money. !At the Restaurant Association we strive to produce effective business tools for our members and we believe the annual Hospitality Report is an important tool. With so much information at our finger tips finding relevant information can be difficult. We aim to make this easier for you by compiling the information you need to know in one place so you do not have to spend your valuable time searching for the answers – they are here. !There is a lot of information to digest in this comprehensive report, so this edition is divided into sections which you may review separately, or combine to provide a comprehensive overview of the industry. We hope your enjoy it, and remember, the Restaurant Association is here to assist you in your business so please feel free to contact us at any time for feedback or advice. !!!!!

Marisa Bidois Chief Executive Restaurant Association of New Zealand

!

PHOTO: MISS CLAWDY, AUCKLAND

THE INDUSTRY AT A GLANCE

!

�7

TOP-LINE DATA Photo: C

afe Hanoi, Auckland

!Key Industry Statistics At A Glance


1 TOTAL INDUSTRY SALES: NATIONAL

$ M

illio

ns

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2009 2010 2011 2012 2013 2014 2015

Real Nominal

7918.47606.57153.96978.1

6540.26465.96280.37720.4

7276.46930.66740.4

6249.46251.86280.36280.3 6251.8 6249.46740.4 6930.6

7276.47720.4

SALES GROWTH: NATIONALPe

rcen

tage

cha

nge

0

2

4

6

8

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 ‘13-’14 '14-'15

4.1

6.3

2.5

6.7

1.1

3

REGION 2009 ($ million)

2010 ($ million)

2011 ($ million)

2012 ($ million)

2013 ($ million)

2014 ($ million)

2015 Projected ($ million)

Cafes and Restaurants 3,294 3,318.6 3,299.4 3,485 3,513.5 3858.9 4030.5

Takeaway food services 1,224 1,321 1,368.4 1,492.3 1,576.1 1624.7 1702.5

Catering Services 529.7 646.2 612 668.4 648.7 636.5 649.3

Pubs, taverns and bars 899.9 872 967.1 1,048.9 1,132.1 1161.2 1203.6

Clubs 332.7 308.1 293.3 283.5 283.5 325.2 332.5

Total New Zealand 6,280.3 6,465.9 6,540.2 6,978.1 7,153.9 7606.5 7918.4

2 TOTAL INDUSTRY SALES: BY SECTOR

nominal

real

SOURCE: Statistics New

Zealand / Restaurant Association OF NZ

THE

INDU

STRY

AT

A G

LANC

E

4%15%

8%

22%

51%

(projected) (projected)

2015 PERCENTAGE MARKET SHARE

PHO

TO: M

ISS CLAW

DY, AU

CKLAN

D

!

�8

THE

INDU

STRY

AT

A G

LANC

E


3 TOTAL INDUSTRY SALES: BY REGION

EMPLOYMENT GROWTH: NATIONAL

5 NUMBER OF EMPLOYEES: BY SECTOR

0

20,000

40,000

60,000

80,000

100,000

120,000

2009 2010 2011 2012 2013 2014 2015

111000107000104700104030101870100400100000

Perc

enta

ge c

hang

e

0

2

4

6

8

10

‘09-‘10 ‘10- ‘11 ‘11-’12 ‘12-’13 ‘13-’14 '13-'14

3.7

2.2

0.6

2.11.5

0.5

4 TOTAL NUMBER OF EMPLOYEES: NATIONAL

TOP-LINE DATA National Figures Breakdown By Year


Zealand / Restaurant Association of NZ

SECTOR 2009 2010 2011 2012 2013 2014 Projected

2015 Projected

Cafes and Restaurants 54,930 54,070 55,000 56,040 57,010 58,850 61,050

Takeaway food services 17,080 17,230 17,690 18,320 19,100 19,260 19,980

Catering Services 9,180 10,800 11,030 11,420 10,980 10,700 11,100

Pubs, taverns and bars 14,580 14,210 14,110 14,270 13,850 13,910 14,430

Clubs 4,180 4,090 4,040 3,980 3,760 4,280 4,440

Total New Zealand 100,000 100,400 101,870 104,030 104,700 107,000 111,000

Auckland WaikatoBay of Plenty Manawatu-WanganuiWellington Rest of North Is.Canterbury OtagoRest of South Is



38%

7%5% 5%

12%

13%

7%

6%7%

55%18%

10%

13%4%

2015 PERCENTAGE WORKFORCE SHARE

REGION 2009 ($ million)

2010 ($ million)

2011 ($ million)

2012 ($ million)

2013 ($ million)

2014 ($ million)

2015 Projected ($ million)

Auckland Region 2,078 2,186 2,310.9 2,585.6 2702 2887.3 3016.9

Waikato Region 461.3 493.1 447.2 474.9 510.3 530.8 546.4

Bay of Plenty Region 255.8 303.4 298.4 344.4 355.3 351.3 364.2

Manawatu-Wanganui 360.3 377.3 384.5 371.8 358.4 399.7 411.8

Wellington Region 945 860.4 840.7 876.4 851.2 894.4 942.3

Rest of the North Is. 498.7 541 497.1 560 522.7 497.0 514.7

Canterbury Region 887.8 906.7 917.4 877.3 923.7 1023.8 1076.9

Otago Region 363.7 374.9 422.9 405.9 407.7 467.0 475.1

Rest of the South Is. 429.7 423.1 421.1 481.8 522.6 555.2 570.1

Total New Zealand 6,280.3 6,465.9 6,540.2 6,978.1 7,153.9 7606.5 7918.4

(projected)

!

�9

THE

INDU

STRY

AT

A G

LANC

E


6 TOTAL NUMBER OF OUTLETS: NATIONAL

8 SALES REVENUE PER OUTLET: NATIONAL

$

0

100,000

200,000

300,000

400,000

500,000

600,000

2009 2010 2011 2012 2013 2014 2015

515218507404485339478838449993451561435105 502338485385470187462529

429984436654435105435105 436654 429984462529 470187 485385 502338

OUTLET GROWTH: NATIONAL

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

2009 2010 2011 2012 2013 2014 2015

15366149911474014573145341431914434

TOP-LINE DATA National Figures Breakdown By Year

REVENUE GROWTH: NATIONAL

Perc

enta

ge c

hang

e

-3-2-101234567

‘09-‘10 ‘10- ‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.5

4.5

1.4

6.4

-0.4

3.8

Perc

enta

ge c

hang

e

-2

0

2

4

6

8

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 ‘13-’14 '14-'15

2.51.7

1.10.3

1.5

-0.8

nominal

real


Zealand / Restaurant Association Of NZ

7 NUMBER OF OUTLETS: BY SECTOR

SECTOR 2009 2010 2011 2012 2013 2014 Projected

2015 Projected

Cafes and Restaurants 6,963 6,952 7,101 7,092 7,210 7,346 7,529

Takeaway food services 4,484 4,559 4,584 4,670 4,766 4,797 4,917

Catering Services 912 746 783 773 765 750 768

Pubs, taverns and bars 1,666 1,652 1,645 1,620 1,578 1,649 1,690

Clubs 409 410 421 418 421 449 460

Total New Zealand 14,434 14,319 14,534 14,573 14,740 14,991 15,366

3%11%

5%

32%

49%




(projected)

(projected)

�10

MARKETPLACE IMPACTS

PHOTO: ANCESTRAL RESTAURANT, WELLINGTON

!

�11

ECONOMIC OUTLOOK

Remuneration Productivity & Labour Pool Indicators

MAR

KETP

LAC

E IM

PACT

S

From recovery to expansion !The economy grew 2.7% over 2013 - its fastest growth since 2007, and it would have been stronger still but for the short but severe drought that hobbled farm production in the first six months of the year. By mid-year, farm output was rebounding (especially in the dairy industry); export prices were at multi-decade highs; the Canterbury rebuild was in full swing; and the housing market was rampant in Auckland, tight as a drum in Christchurch, and warming up nicely in places like Hamilton and Palmerston North. !Unsurprisingly, business and consumer confidence have risen to multi-year – in some cases multi-decade – highs. And that confidence has had tangible effects going well beyond Auckland or Canterbury. Businesses are now hiring more staff, and unemployment is trending down. Fewer people are leaving New Zealand for Australia and more migrants are coming in. Consumers are slowly but steadily becoming more willing to spend. !There have also been signs of life in the tourism industry, albeit mostly in terms of stronger visitor numbers. Most of the increase in visitor arrivals over the past few years has come from Australia, typically a lower-spending category

(since a large chunk of Australians come to visit friends and family, rather than as tourists). !But last year also saw a notable upturn in visitor numbers from Europe and North America as those economies started to recover. And about 30,000 extra visitors came from China. Chinese visitor arrivals are still less than 10% of the total, but their number has doubled since 2010. !As a result, market conditions for the hospitality industry have improved. Adjusted for inflation, retail spending on food, beverage and accommodation services rose 4.9% over the year to March 2014, though the level of spending per person is still slightly below its 2007 peaks. The Westpac McDermott Miller Leisure Confidence Survey, a survey of about 1,500 households around New Zealand, tells a similar story. !For example: !• The number of households reporting higher spending on

entertainment and eating out, and saying it’s a good time to increase their spending further, has shot up over the past two years, to levels not seen since late 2007. The lift in spending appetites has crossed geographic and social lines, though it’s been most pronounced among Aucklanders and younger consumers.


New Zealand’s economic recovery turned to full-blown expansion last year. With a building boom and a dairy bonanza injecting billions of dollars into the economy, the consumer mood should should stay fairly buoyant this year, but there won’t be a spending spree like last decade, says Westpac Senior Economist, Felix Delbruck.

PHO

TO: AN

CESTRAL RESTAU

RANT, W

ELLING

TON

!

�12 Restaurant Association of New Zealand Hospitality Report 2014

• In the wake of the Global Financial Crisis a marked preference emerged for ‘staying in’ rather than ‘going out’. This has now virtually disappeared. !

• Over the past year there has been a modest lift in people’s willingness to travel within New Zealand, despite the high Kiwi dollar. !

2014 – the next step !Indications are that New Zealand’s economic growth performance will be even stronger over 2014. The Canterbury rebuild is set to take another leg higher this year, with demolition in the Christchurch CBD now more or less complete and the first anchor projects beginning. Construction is also likely to pick up further in Auckland. About 6,000 extra houses were built in Auckland last year – 20% more than in 2012, but still not enough to meet the new demand implied by current population trends. A backlog of building consents in the pipeline (particularly for apartments) and the strong market signal from high prices suggest that builders will continue to respond to that need. !Meanwhile, farmers are set to receive a major income boost this year. On current trends dairy production over the season will be up about 10% higher than last year. Add an expected record $8.65 Fonterra milk price, and the lift in dairy farmers’ incomes alone is likely to be on the order of $6bn, rivalling this year’s expected cash injection from the Canterbury rebuild. !All up, we are forecasting the economy to grow a little under 4% in 2014. Why not even faster? After all, the last time New Zealand emerged from a prolonged downturn, and the last time business confidence was at similarly high levels, was the early 1990s – when economic growth exceeded 6%. !Continued headwinds !One reason is the still fairly lacklustre global economy. While the US and European economies are recovering, conditions remain weak. Across the ditch in Australia, the mining boom is winding down at the same time as China’s investment in heavy industry has slowed, hurting profits and confidence. Against that backdrop New Zealand’s economy has become the darling of the international investor community, with predictable consequences for the New Zealand dollar. An exchange rate at recent levels will continue to limit visitor spend but it’s hard to see significant relief coming while the construction and commodity export booms are in full swing. !A second moderating factor is ongoing government austerity - though the focus is shifting just a bit away from debt reduction towards loosening the public purse-

!!!!!!!!!!!!!!!!!!!!!!strings. In this year’s Budget we found it noteworthy that the Government decided to lift its spending allowances without any increase in the Treasury’s revenue forecasts. !Last but not least, interest rates are on the rise. With the economy now firing on several cylinders and signs that inflation has bottomed out, the Reserve Bank has started raising its cash rate and signalled more to come. !The general consensus among economists (including us) and financial market participants is that the Reserve Bank will raise its cash rate by about 2% over this year and next – not as much as in previous cycles, but still a significant amount. !As a result, fixed mortgage rates have already risen substantially in anticipation of rising floating rates, leaving little wiggle room for borrowers. Mortgage holders can either take the pain of higher fixed rates now, or wait for floating rates to rise more slowly (but ultimately by more). !Home truths !Coming on top of mortgage lending restrictions introduced by the Reserve Bank late last year, that is not good news for the housing market. Indeed, the housing market has already shown clear signs of slowing from last year’s breakneck pace. Since restrictions on low-equity lending were put in place in October, house sales have fallen by over 13%. House prices have been harder to read due to compositional shifts in the market, but the measures that best deal with these issues suggest that prices have flattened off in the first few months of the year, after rising about 10% last year.

MAR

KETP

LAC

E IM

PACT

S...ECONOMIC OUTLOOK !

The number of households reporting higher spending on entertainment and eating out, and saying it’s a good time to increase their spending further, has

shot up over the past two years.

!

�13Restaurant Association of New Zealand Hospitality Report 2014

!!!!!!!!!!!!!!!!!!!!The Reserve Bank has indicated it is unlikely to start removing its LVR restrictions before the end of this year. That said, international evidence is that the impact of similar restrictions peaks after three to six months; in the New Zealand context, they leave property investors, who are typically less leveraged, largely unscathed. What’s more, banks have already started loosening up their own lending and have room to do more without hitting the Reserve Bank’s ‘speed limits’. That could lead to a modest revival in the market. !That said, rising interest rates are likely to prove a more persistent headwind for the housing market. Unlike LVR restrictions, rising mortgage rates affect all borrowers. As interest rates rise over the next couple of years mortgages will become less affordable, rent-or-buy decisions will swing in favour of renting, and property investment will appear less lucrative. !Unless we do see an unexpectedly hard landing in the housing market - and there’s no sign of that so far - the Reserve Bank is unlikely to be deterred from further interest rate hikes. Even with a slowing housing market, economic momentum will remain strong due to Canterbury earthquake reconstruction and high export returns. Arguably, the Reserve Bank needs to see the housing market cooling – both to reduce the risks to New Zealand’s financial system and to prevent inflation from bubbling up. !Rational exuberance !The upshot is that a return to the ‘borrow-and-spend’ mentality of the early 1990s or the early 2000s doesn’t appear to be on the cards. With house prices and household debt already much higher compared to incomes than they were in earlier decades, and interest rates on the rise, there’s simply less scope for another big splurge.

Our forecasts are that total retail activity will accelerate 4.5% in 2014 – not much faster than the overall economy, and well short of growth rates north of 6% in the mid-2000s boom times. !And for now, the consumer confidence surveys are bearing this out. According to the Westpac McDermott Miller consumer confidence survey, consumers haven’t been this upbeat for the economy since the mid-1990s and mid-2000s. However, their attitudes towards their own finances and towards spending – while dramatically higher than a couple of years ago – are still a fair way below their peaks in the last two decades. !To some extent, there may still be some scepticism among consumers that the good times will last. Interestingly, while Cantabrians are currently the most optimistic of all as far as the economy is concerned, their attitudes towards entertainment-related spending are below the national average. !We would regard that scepticism as healthy. The Canterbury rebuild won’t go on forever. While it will probably take a decade or more before the last tools are put down, we expect the wind-down phase to begin by 2016. And the dairy bonanza isn’t risk-free. We’re optimistic for New Zealand’s export outlook over the next few years – with growing Asian demand for protein, it’s hard not to be. But this year’s bumper payout was probably a sweet spot. !!!CONSUMER CONFIDENCE !!!!!!!!!!!!!!!!!!!!

MAR

KETP

LAC

E IM

PACT

S...ECONOMIC OUTLOOK !

As interest rates rise over the next couple of years mortgages will become less affordable, rent-or-buy decisions will swing in favour of

renting, and property investment will appear less lucrative.

SOURCE: Westpac McDermott Miller Consumer Confidence Index

25%121.7Consumer Confidence Index for March 2014,

the highest since March 2005.

The Westpac McDermott Miller Consumer Confidence Index rose to 121.7 in March 2014, up from 120.1 in the December 2013 survey. The index was the highest since March 2005, when it was 126.7.

An index number over 100 shows optimists

outnumber pessimists

!

�14

PROJECTED GROWTH FOR 2015 !!Adjusted for inflation, industry sales rose 4.9% in the year to March 2014, faster than overall ‘core’ (ex food and vehicle related) retail sales. Our assessment is that real sales will rise about another 4% over the year to March 2015. Strong household income growth related to the Canterbury rebuild and a booming dairy industry will support growth, while a slowing housing market will be a moderating influence. !In the three years to February 2013, growth in the number of outlets was a modest 1% a year on average. We would expect growth in the number of outlets to pick up in 2014, but to fall well short of the 4%+ growth seen over the 2001-2005 period. Meanwhile, we expect little change in the average number of people employed per outlet, currently around 7.1. !Assuming 4% growth in real total industry sales this year, and 2.5% growth in the number of outlets, that implies real sales revenue per outlet will grow about 1.5%, to approximately $490,000. The total number of people employed in the sector is projected to rise to about 111,000. !Felix Delbruck, Westpac Senior Economist

PHOTO: ESPLANADE, DUNEDIN

!


FOOD PRICES OVERALL

UP 0.2 %

GROCERY FOOD PRICES

UP 1.0 %

FRUIT & VEGETABLE PRICES

DOWN 5.6 %

VEGETABLE PRICES

DOWN 8.5 %

FRUIT PRICES

DOWN 2.1 %

MILK PRICES

UP 6.9 % !(1.3% BELOW PEAK OF FEB 2011)

CHEESE PRICES

UP 6.9 %

BUTTER PRICES

UP 26 %

MEAT, FISH & POULTRY PRICES

DOWN 0.2 %

MAR

KETP

LAC

E IM

PACT

S

SOURCE: Statistics New Zealand

COST OF GOODS COMPARISON !From February 2013 to February 2014:

RETAIL PRICE COMPARISONS 2013 2008

NON-ALCOHOLIC BEVERAGE PRICES

UP 1.7 %

RESTAURANT MEALS

UP 1.3 %

READY TO EAT FOOD PRICES !March quarter 2012 vs March quarter 2013:

UP 1.8 %

BREAD (white sliced loaf 700g) $1.94 $1.38

MILK (standard 2L) $3.19 $3.23

FISH & CHIPS $5.77 $4.93

APPLES (kg) $2.32 $2.11

LAMB (kg) $12.29 $10.73

BEER - glass (400ml) $5.78 $4.47

PETROL (91 octane) (ltr) $2.05 $1.94

GP visit - adult $36.28 $29.26

!


International visitor arrivals hit a record high in 2013, according to Statistics New Zealand, with 2.7 million visitors for the year ended January 2014. This is up 7.9 per cent (2.56 million) over the year previous. !Approximately 1.2 million of our international visitors come from Australia, but visitors from China saw the biggest increase compared with the January 2013 year, up 25 per cent to 240,000. International visitors from other Asian markets also saw some strong growth; with Taiwan up 25 per cent, Thailand visitors up 23 per cent and Hong Kong and Singapore up 20 per cent. However, although China is seen as New Zealand’s biggest potential growth market, on average, Chinese people spend fewer days in New Zealand and visit fewer regions than visitors from other nations. The bulk of electronic card spending by visitors from China is concentrated in Auckland, Bay of Plenty, and Otago. !Almost 2 million of our international visitors touch down in Auckland, with Christchurch our second most frequented port. While only 38,000 visitors arrived via our seaports for the year ended January 2014, this sector has seen the biggest growth (up 55 per cent over 2013). !Overall, spend by international visitors in New Zealand increased by 5 per cent for the year ending December 2013 to reach $6.7 billion, according to the Ministry of Business, Innovation and Employment’s (MBIE) International Visitor Survey. This increase reverses the decline reported in December 2012 and indicates that visitor spend is now at a similar level to that reported in 2011, the year New Zealand hosted the Rugby World Cup. !Australia continues to be New Zealand’s largest tourism market, with Australian residents spending $2.2 billion during their visits to New Zealand over the last year. The biggest expenditure growth came from the USA at 22 per cent higher than the previous year, followed by Germany at 20 per cent. Visitors from Asia (excluding China, Japan and the Republic of Korea) also contributed to the growth (up 29 per cent), spending a total of $650 million. !Looking ahead, the New Zealand Tourism Sector outlook produced by the Ministry of Business, Innovation and Employment predicts that the long term outlook, through to 2019, is positive, particularly from emerging markets like India and Indonesia. Their populations are large and youthful; as their economies approach middle income, demand for travel to New Zealand will soar.

!!!!!!!!!!!!!!!!!!Visitor spending will recover over the coming years, following the sharp slowdown caused by a synchronised global recession during the GFC. !The Tourism Sector outlook suggests that traditional markets like the United Kingdom will continue to decline. However, this decline will be off-set by strong growth from China and Australia. The US economy appears to be improving and visitor arrivals from the US are expected to improve. Overall, the average spend per day will increase particularly in the later years of the forecast period. The length of stay will trend downwards due to a shift to short-haul trips from Australian and Asian visitors. !With some future planning the hospitality industry can maximise the potential of the changing tourism sector, the rapidly-growing China visitor market and realise greater value from international visitors, in the face of declining lengths of stay. !!

MAR

KETP

LAC

E IM

PACT

SLONG TERM THE INTERNATIONAL TOURISM MARKET IS CHANGING, BUT THE OUTLOOK IS POSITIVE

SOURCE: Statistics New Zealand

25%$1,688 million

International tourist expenditure on food

and beverage services in 2013

International tourist

expenditure as a percentage of total market

!


1 THE CASUALISATION OF DINING... We’ve noticed a trend to more casual dining and consumer research backs this up. People still want to go out and are dining out more frequently, but spending less each visit. !2 NO RESERVATIONS POLICY... In line with the more casual dining approach more businesses are opting for the walk in crowd (or only accepting reservations for groups over 10). !3 GASTRO BAR... While the industry as a whole had an increase in sales of 2.5 per cent from 2012-2013, the biggest growth over that period came in the pubs, taverns, bars sector (with a 7.9 per cent increase). We believe the growth in this sector is influenced by the popularity of the “gastro bar”. As the popularity of the traditional pub or tavern is in decline, these businesses have found a new lease of life as food overtakes their beverage sales. !4 CUISINE STYLE... Cafe Hanoi were one of the local pioneers, but 2013 and 2014 has seen more of this new breed of Asian eatery opening. Southern American and South American (predominantly Mexican) cuisine are also making an impact. !5 SHARED PLATES / SMALL PLATES...Keeping dining fun and social, many plates at a lower price point are designed for everyone to have a share. !6 HEALTHY FOOD... A new style of food and health businesses are popping up around the country, many focusing on the “paleo” diet which emphasizes the basic, raw eating habits of the original hunter gatherers. Menu items influenced by the paleo or raw food diet are also cropping up more frequently on restaurant and cafe menus. !7 LOCALLY GROWN... Where they are able, more businesses are opting to grown their own produce. A Restaurant Association snapshot survey indicates that more than a third of member businesses are growing some of their own ingredients. And as an extension of the typical restaurant garden some business owners are taking things a big step further, showcasing products sourced from their own orchards, beehives and farms.

8 NEW DINING PRECINCTS... It’s a trend we've seen over the past few years, but these precincts are continuing to open in the main cities, reinvigorating areas which previously had little focus on the culinary. 9 THE RISE OF THE HOSPITALITY GROUP... While a number of key franchise groups continue to do well, steadily increasing their profile and number of sites, there are also a number of "hospitality groups" going through a significant expansion phase at the moment. These groups typically own and run 10 - 20 different establishments. !10 POP UP RESTAURANTS... A sign of the innovative industry we work in, business owners and chefs are often keen on trying out something completely different and as a result the temporary pop up restaurant is definitely having its moment. It may be a chef at an existing business doing their own thing, or a fully kitted out temporary operation, or a one night thing, but we expect to see more of this happening in 2014. !11 CRAFT BEER…Although the craft beer market here is still small it is undergoing significant expansion as consumers embrace the alternative options available from the craft brewing industry. !!!

LOCAL TRENDS M

ARKE

TPLA

CE

IMPA

CTS The hospitality industry is optimistic and expects a brighter and

better 2014. To help with your business planning for the coming months take a moment to reflect on some of the industry’s emerging trends, as introducing a few key new initiatives in your business can help you stay ahead. We outline some of the trends we’ve noticed currently driving the market...

Restaurant gardens are growing in popularity, along with orchards, beehives, farms...

!


LOCAL TRENDS M

ARKE

TPLA

CE

IMPA

CTS We asked some top chefs and operators

for their picks on some of the hottest trends... !

“Relaxed’ dining seems to have taken off with a boom! Which is fantastic it makes the industry as a whole more accessible to more people.” !- Jason van Dorstyn, Cafe Hanoi

!“Wider ethnic food ventures. It certainly fits in with the affordable food option model and with some exciting chefs involving themselves, I think we will definitely see some really interesting, contemporary interpretations.” !- Javier Carmona, Mexico Group !

!“Globally food and cuisine is shifting to a sharing concept, allowing the consumers to engage in a community manner across the dining table.” !- Nic Watt, Masu !

!“One of the biggest food trends is simply getting back to the basics; cooking and treating good product as little as needed. Honest flavours, well executed. It doesn’t need to be fine dining to be fine cuisine.” !- Howard Morris, Harrys Bar

!“Customers are more interested in eating healthily. This transcends the obvious visits to the health food store and has been more about day to day choices, extending the usual for unusual and more pertinent combinations. Add the home growing of seasonal produce, lots of herbs and an intrigue with preserving, all of which have presented the punters with a balanced way to enjoy the foods they love.” !- Javier Carmona, Mexico Group !

!“For me 2013 was the year that... grazing and tasting options expanded to more restaurants where the price point upon item is cheaper. Growth in raw food and vegetarian and vegan cuisine picking up momentum in the market place. Steady incline by chefs and proprietors to work with second quality cuts. Retro and old world trends being re-worked to become fashionable. Sustainability of resources being considered in what is presented on the menu. Craft Beer and Boutique Ciders smothered the market place.”!- Paul Jobin, The Riverhead Tavern !

!“In the South we’ve noticed cuisine from the Pacific is a growing trend; mixed in with Asian influences.” !- Grant Hattaway, Pier 19 Restaurant !

!

�19

What influence do international hospitality trends have on our local industry? While it is important for New Zealand hospitality businesses to develop their own niche, it is equally essential to be aware of some of the key global trends we can recreate, as without a doubt our businesses are influenced by continual changes in customer expectations in the increasingly global marketplace.


SO WHAT IS HAPPENING INTERNATIONALLY? In the UNITED KINGDOM (as in New Zealand), consumers are embracing a more casual style of eating out, trading down from more formal dining to establishments with flexible menus, extended opening hours and value-for-money food. As competition is strong in this sector in the UK the industry has concentrated on providing improved service levels, businesses are offering more innovative dishes and focusing on remaining price competitive. Chicken menu items are expected to boom this year, as poultry prices in the UK will reduce by 7 per cent, while beef prices are expected to remain significantly high. In beverage trends, traditional beer sales are waning, but the industry is cashing in on the craft beer trend which grew by 79 per cent in 2013. Craft beer is also seeing significant growth in New Zealand and although the market here is still small, the prospects for the craft brewing industry are good. Operators in the UK are also having to navigate through the challenges of new food legislation introduced at the end of 2013 which requires food businesses to provide allergy information on food sold unpackaged. Restaurants and cafes are now required to provide clear information about the food allergens on each of their menu items. ! CANADIANS are also feeling the influence of the “food allergy market”. A recent survey of 400 Canadian professional chefs identified gluten free and food allergy conscious menu items as the hottest trend.

Canadian diners apparently have a heightened awareness of food intolerances, allergies and ingredients and the industry has taken note. The gluten free trend removed locally sourced foods from the top spot, a position it has held for the past four years.

2014 top 10 trends for Canada: !1. Gluten-free/food allergy conscious

2. Quinoa

3. Locally sourced foods

4. Leafy greens (e.g. kale, Swiss chard, mustard greens, collard greens, dandelion, beet greens)

5. Craft beer/ microbrews

6. Food smoking

7. Heirloom fruit and vegetables (e.g. tomatoes, beans, apples)

8. Charcuterie/ house-cured meats

9. Food trucks

10. Inexpensive/ underused cuts of meat (e.g. beef cheek, brisket, pork shoulder, skirt steak)

!Some of the ‘up and coming’ trends the Canadian survey also picks are back-to-basics / simple cooking, fewer choices on the menu, half portions / smaller portions on the menu for a smaller price. And in ethnic cuisine: Southeast Asian.

INTERNATIONAL TRENDS M

ARKE

TPLA

CE

IMPA

CTS

!


And what of the AMERICAN influence to New Zealand’s hospitality industry? !The National Restaurant Association (NRA) conducts an annual survey which identifies the hottest trends in the US. For 2014, locally sourced meats, seafood and produce are the most popular trends from the kitchen. !!!!!!!!!!!!!!!!!

Locally sourced meats, seafood and produce continue as the key trends in the American industry... !!

Healthy meals, environmental sustainability and hybrid desserts are among the other hot trends on this year’s list. !Local sourcing, sustainability and children’s nutrition are consistently placed at the top for this survey – in fact all have remained within the top 20 identified trends over the past 5 years. And when asked which trend would likely be the top trend in 10 years time, 38 per cent of the survey respondents said environmental sustainability. !Linking into the healthy / nutritional menu items element, a North American consumer survey conducted at the end of 2013 also reports that American consumers will dine out less frequently this year because of concerns about being able to find healthy food options on the menu. Financial woes have dropped to second place as a concern likely to dampen restaurant visit frequency (the biggest impact to dining frequency over the past few years). !So American hospitality business owners are wise to focus on healthier menu options for their operation; 59 per cent of the chefs polled in the NRA survey said they are always making efforts to adjust dishes and recipes to be more healthy. Only 6 per cent said they were not exploring any ways to make their menus healthier. !

Beverage trends for 2014 also reflect the demand for local and house-made items; the number one beverage trend was micro-distilled / artisan spirits, followed by locally produced beer / wine / spirits. !!2014 top 10 trends for the USA: !!1. Locally sourced meats and seafood

2. Locally grown produce

3. Environmental sustainability

4. Healthy kids meals

5. Gluten free cuisine

6. Hyper-local sourcing

7. Children’s nutrition

8. Non-wheat noodles (quinoa, rice, buckwheat)

9. Sustainable seafood

10. Farm/ Estate branded items

!!American technology trends include iPads and tablets for ordering, menus and wine lists, and smart phone apps for offering daily deals, as well as menus and ordering.

!!That is a little insight into some international hospitality trends, some of which we’ve already noticed having an influence on the New Zealand market. It’s not necessary to jump on board, on all (or any) of these but some may fit well with your business strategies over the coming 12 months. You know your business best and what is going to work in your local market.

MAR

KETP

LAC

E IM

PACT

S...INTERNATIONAL TRENDS !

The hottest technology trend in the USA for 2014 is tablet computers for menus, wine lists and ordering...

!

�21PHOTO: THE TASTING SHED, AUCKLAND

CHALLENGES RESPONSES

!

�22

2014 CHALLENGES

Hospitality Industry Survey Results and Industry Comment

CH

ALLE

NG

ES &

RES

PONS

ES

TOP CHALLENGES

FOR 2013

EXPECTED TOP

CHALLENGES FOR 2014

Labour costs 55% 51% (1)*

Lack of skilled employees 44% 41% (3)

Building/Maintaining sales volume 40% 44% (2)

Competition from other businesses 33% 34% (4)

Food costs 29% 29% (5)

Operating costs 21% 21% (6)

Government legislation/compliance 20% 18% (8)

Tax burden 19% 17% (7)

Lack of cashflow 10% 5% (11)

Access to capital 7% 7% (9)

Menu pricing 5% 7% (10)

Shortage of supplies 3% 7% (13)

Inflation 0.4% 6% (12)

LABOUR COSTS still biggest test for business !SOURCE: RESTAURANT ASSO

CIATION HO

SPITALITY INDUSTRY SURVEY

National hospitality industry sales grew strongly from 2013-2014, recording 9.8 per cent growth over the year. While hospitality operators are cautiously optimistic about the rest of 2014, many are hesitant to announce a return to the profitability of pre-recession times. It is clear that there continues to be many challenges to remaining profitable in hospitality.

“We continue to feel the effects of the global financial crisis and high kiwi dollar affecting international tourist numbers. Although helped by an improving domestic economy and domestic tourism, we are still down on where we were 5-6 years ago.” Cafe Owner, Marlborough A recent Restaurant Association snapshot survey (part of an annual series) saw operators identify their top challenges, now and in the future. Looking back over 2013, the top challenge facing hospitality businesses was identified as LABOUR COSTS, with more than half of this survey’s respondents reporting that this was the biggest test for their business. In the second half of 2014 operators expect to face the same challenges that they did in 2013 and labour costs are forecast to remain the biggest concern for business owners.

PHO

TO: TH

E TASTING

SHED

, AUC

KLAND

*2014 rank indicated above in ( )


!

�23

REGION

EXPECTED TOP

CHALLENGE FOR 2014

PERCENT

Northland Building and Maintaining Sales 86%

Auckland Labour Costs 49%

Bay of Plenty Food Costs 67%

Waikato Lack of Skilled Employees 88%

Hawke’s Bay

Labour costs & Building and Maintaining Sales 45% each

Wellington Labour costs 60%

Rest of Nth Island

Lack of Skilled Employees 73%

Canterbury Labour Costs 54%

Queenstown/ Southern Lakes

Labour Costs 70%

Rest of Sth Island Labour costs 56%

TOP CHALLENGES: By Region Industry Results

A LACK OF SKILLED EMPLOYEES in the industry, which was rated the second biggest challenge in 2012, and 2013, is a contributing factor to concerns over labour costs.

“There are not enough workers, particularly chefs, and the lack of staff means there is a large increase in wage rates to keep those we have.” Restaurateur, Auckland BUILDING AND MAINTAINING SALES VOLUME is also of major concern as many operators focus on new initiatives to grow business and attract customers. At 44.1 per cent, building and maintaining sales volume is forecast as the second biggest challenge in 2014.

COMPETITION FROM OTHER BUSINESSES is also highlighted as the fourth biggest challenge for the industry. The fight for the consumer’s discretionary dollar is particularly intense in the major city centres which have seen an influx of new businesses opening over the past two years, with no sign of abatement. As one Auckland restaurateur commented, “we simply have an oversupply of restaurants to population. They will not all survive and everyone - landlords, suppliers, even the IRD - will end up out of pocket if this happens”.

Many operators advocate a cap on the number of business operating in a particular area and this may ultimately be an outcome of the new alcohol laws which allow councils, and the community, to have greater input into the number of liquor licences granted.

CH

ALLE

NG

ES &

RES

PONS

ES

REGIONAL SPOTLIGHT:

Northland

Auckland

Bay of Plenty

Waikato

Hawke’s Bay

Wellington

Rest of North Island

Canterbury

Southern Lakes

Rest of Sth Island

0 10 20 30 40 50 60 70 80 90 100

33

40

38

25

20

45

25

42

33

43

67

60

38

73

50

55

50

42

58

57

Getting Better Remaining the sameABOVE: In Northland 86 per cent of operators rate building and maintaining sales volume as their biggest concern in 2014, while 88 per cent of Waikato operators cite lack of skilled employees as their biggest challenge. Although businesses in the Southern Lakes rate labour costs as their number one challenge, competition from other businesses also rates very highly. !“Labour costs are a major concern in the future as wages continue to rise beyond the customer expectation of price increases.” Café owner, Marlborough

REGIONAL BUSINESS CONFIDENCE HOW WOULD YOU DESCRIBE BUSINESS

CONDITIONS FOR THE INDUSTRY IN 2014?

percentage

!SOURCE: RESTAURANT ASSO

CIATION HO



!


The hospitality industry continues to rate a lack of skilled employees as one of the key challenges facing hospitality business operators. In particular it continues to be prohibitively difficult to recruit skilled senior positions like cafe and restaurant managers and senior chefs. !While the manager position has now been removed from Immigration New Zealand’s Short Term Skill Shortage list, a review of the chef role at the end of last year found enough evidence for this position to remain on the Long Term Skill Shortage list. !The Restaurant Association has consulted widely with industry and there are indications that the severe shortage in skilled staff available to fill senior chef roles is a long term situation which has worsened over the past three years. While business owners are committed to developing, training and promoting from within their business and to incentivising staff to stay by providing additional benefits, they are still finding an insufficient number of candidates available for these roles. !!!!!!!!!!!!!!!!!!!!!Programmes have been initiated to engage with the potential/future workers at an early stage (schools) and training numbers at a tertiary level have increased. The Restaurant Association is also involved in a number of initiatives to encourage more people to enter the industry and remain in the industry, including an apprenticeship scheme and professional development programme, however there is evidence that a large number of key employees are moving overseas or leaving the industry permanently.

!!!!!!!!!!!!!!!!!!74 per cent of the businesses consulted by the Association have recruited someone for a senior chef role in the past year and 66 per cent have recruited someone for a junior chef role. Of those businesses who have employed a worker in a senior chef role over the past year, more than half of the successful candidates for the role were immigrant workers in New Zealand on a work visa. !We also found that 96 per cent of these businesses who were recruiting for chefs found an unacceptable level of difficulty (extremely difficult, or difficult) in recruiting for these positions. 60 per cent said that the degree of difficulty in finding a suitable candidate was "Extremely difficult, I had to repeatedly advertise the position before a suitable candidate was found". This indicates that the problem has worsened over the past three years as a survey in 2010 found that 86 per cent were having difficulty in recruiting for these roles - a jump in 2013 of 14 per cent. !The survey also sought to find out if businesses were finding it more, or less, difficult to recruit for senior chef roles and 46 per cent reported that the recruitment process has been more difficult over the past year than in years previous. An alarming number of key staff also appear to be leaving the industry permanently, with 47 per cent of employers noting that one of the key recurring reasons that staff leave their business is to go overseas. 31 per cent also indicated that employees were leaving the industry completely. !!

INDUSTRY NEEDS SOLUTIONS TO LABOUR SHORTAGES !

HU

MAN

EC

ON

OM

IC C

APITA

L

HOW EASY DO YOU FIND IT TO RECRUIT CHEFS?

0% 12% 24% 36% 48% 60%

0%

4%

36%

60%

Extremely Difficult: I had to repeatedly advertise to fill the positionDifficult: I was able to fill the position but not in an acceptable time frameRelatively Easy: I was able to fill the position in a suitable time frameExtremely Easy: I had a number of suitable candidates applying for the job

SOURCE: RESTAURANT ASSO

CIATION HO


0% 14% 28% 42% 56% 70%

66%

24%

69%

In-house training programmeExternal professional developmentMentoring / coaching

IN WHAT WAYS DO YOU ASSIST TO DEVELOP AN EMPLOYEE’S SKILLS?

NB: respondents were able to choose more than one option

3In 2014, a lack of skilled employees is ranked as the third biggest challenge for hospitality operators.

!


...FINDING SOLUTIONS TO LABOUR SHORTAGES !

Senior kitchen staff are the backbone of a hospitality business - it is a role that a business cannot survive without. !All regions in New Zealand report severe shortages, as it is a problem both in the larger cities and also the smaller provinces. Special attention should also be given to: Auckland, which has had a number of new businesses opening over the past 18 months; Canterbury, which has had a number of new businesses reopen over the past 12 months after the Canterbury earthquakes; and some of the more remote regions around the country, where it is particularly difficult to get New Zealand staff to move to these areas and they often rely on immigrant works to fulfil seasonal needs. !!

HUM

AN E

CONO

MIC

CAP

ITAL

RESTAURANT ASSOCIATION-LED

FORUM ADDRESSES INDUSTRY LABOUR

CONCERNS!!Against Restaurant Association recommendations, the Restaurant, Café, Bar Manager role was recently removed from Immigration New Zealand’s immediate skill shortage list. In taking this stance Government has highlighted that the industry needs to constructively work together to help themselves and look at solutions to the shortage. !With this in mind, the Restaurant Association initiated a pilot forum of industry representatives to consult on the skill shortage issue and collaborate on ideas for how to move forward. !The forum highlighted two main challenges: 1.The struggle to find front of house staff

with basic work ethics, and 2.Good managers are few and far

between !As a result the Restaurant Association plans to introduce a new industry training scheme which will aim to provide fundamental training at a basic front of house level. The training will aim to provide a balance of aspects including work ethics, communication, grooming and career development. !It is hoped that the second stage of the initiative will be to deploy a Restaurant Manager’s training programme, which can be utilised by the industry with their current staff members who are committed to their roles to develop their skills to become an educated and effective manager. !Both programmes will positively impact our members and the industry and provide a framework where industry leaders can direct the programmes.

REGIONAL SPOTLIGHT: !

Auckland / Upper North Island

Extremely difficult..... Difficult..................... Relatively easy......... Extremely easy.........

40% 52% 5% 3%

Bay of Plenty / Waikato / Rotorua


48% 39% 9% 4%

Central North Island / Taranaki


71% 26% 0% 3%

WellingtonExtremely difficult..... Difficult..................... Relatively easy......... Extremely easy.........

56% 13% 31% 0%

Canterbury / Upper South Island

Extremely difficult..... Difficult..................... Relatively easy......... Extremely easy........

53% 29% 12% 6%

Otago / Southland


55% 45% 0% 0%

!

�26

8%

42%

50%


CIATION HO


Good operators will be monitoring their operational and other costs in an effort to remain profitable, however many commented that it is becoming more difficult to control these costs. 50% indicated that it was MORE CHALLENGING TO CONTROL COSTS in 2013 over the year previous.

77 per cent of respondents in the Canterbury region found controlling costs more difficult in 2013. North Island operators (47 per cent selected more challenging) seem to fare better than their South Island (64 per cent selected more challenging) counterparts here.

!!!!!!!!!!!While the industry appears to be in the midst of some recovery, many operators still comment that purse-strings are still tightened amongst consumers. It is encouraging then that sales performance is moving towards more positive territory. The largest percentage of respondents reported that sales were up in 2013, with 47 per cent (up from 44 per cent the same time a year previous) indicating sales growth of, on average, 11 per cent. For those business owners who indicated an increase in sales, 60 per cent also reported that their profitability was up on the year previous.

Another 27 per cent indicated that sales remained the same. Unfortunately almost the same number reported sales decreases for the year; the average for these businesses was a decrease in sales of 7 per cent.

!

Of these operators who reported sales decreases, a significant 78 per cent said that they found controlling costs to be more difficult in 2013 and not surprisingly building and maintaining sales volume is expected to be the biggest challenge in 2014 for those operators. These are similar results from our survey of a year previous, although the average percentage decrease in sales has reduced.

Waikato operators reported the best sales performance. 72 per cent of Waikato operators had an increase in sales in 2013, compared to just 14 per cent of Northland operators. In a survey conducted in 2013 only 27 per cent of Wellington operators indicated that their sales were better over the year previous, but this improved significantly in 2013, with 60 per cent in the survey saying sales were up for the year.

As a measure of BUSINESS CONFIDENCE within the industry, 80 per cent believe that business conditions for the industry will remain the same or improve over the next 12 months. However it may be a little early to declare that the business sentiment is upbeat. There is still uncertainty about the future and the majority of survey respondents (62 per cent) simply describe current trading conditions for their own business as fair. The sentiment is summed up by one Wellington cafe owner who said:

“It seems that there is an economic recovery in progress but I am very hesitant to say that business is going to be better. I’m still very unsure about the future and am not confident that it will hold.” !!

CH

ALLE

NG

ES &

RES

PONS

ES

PROFITABILITY: WAS PROFITABILITY UP, OR DOWN IN 2013

32%

33%

35%

BUSINESS CONFIDENCE

Better overall

Decreased overall

The same

COSTS: IS IT MORE CHALLENGING, OR LESS,

TO CONTROL COSTS?

More challenging

The same

Less challenging


�27

SALES ANALYSIS

PHOTO: EBISU, AUCKLAND

(2015 projected)

�28

SALES GROWTH SA

LES

GRO

WTH


PHOTO

: EBISU, AUCKLAND

real

After several tough economic years, 2014 started with a barrage of good news stories about the New Zealand economy - prices for our major exports are at multi-decade highs, the Canterbury rebuild is surging ahead and the job market is on the mend.

The start of 2014 has also been positive for many in the hospitality industry, with 2014 sales growth, for the year ended March 2014, of 6.3 per cent. It is estimated that the industry will increase (actual) sales by 4.1 per cent through to March end 2015. The general mood is ‘cautiously optimistic’.

The clubs sector, which represents a very small part of the industry, grew by 14.7 per cent (or $41.7 million) from 2013-2014. The industry’s restaurant and cafe sector, which accounts for 50 per cent of the industry’s sales, recorded the most significant growth (9.8 per cent) over that period. Takeaway foodservice reported a 3.1 per cent increase, to surpass $1.6 billion in annual sales. The pubs, taverns and bars sector reported an unexceptional 2.6 per cent increase in 2014 and catering services, which recorded the highest growth from 2011-2012, saw a 1.9 per cent decline in sales.

EMPLOYEE SALES BUILDING SALES PROJECTED SALES GROWTH

4.1%$71,337 !The average sales

generated per employee per annum

2014 - 2015 (actual sales)


Zealand & Restaurant Association of NZ

86% of Northland operators

rate building and maintaining sales as their biggest

challenge

(projected 2015)

!

�29

SALES GROWTH SA

LES

GRO

WTH


SALES NATIONAL

$0$1,000$2,000$3,000$4,000$5,000$6,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

Real Growth Nominal Growth

4030.53858.93513.534853299.43318.632943929.73691.43340.73273.33108.53251.432943294 3251.4 3108.5 3273.3 3340.7 3691.4 3929.7

$0

$1,000

$2,000

$3,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1702.51624.71576.11492.31368.4132112241659.91554.21498.61401.61289.21294.212241224 1294.2 1289.2 1401.6 1498.6 1554.2 1659.9

$0

$1,000

$2,000

$3,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1203.61161.21132.11048.9967.1872899.91173.51110.81076.4985.2911.1854.3899.9899.9 854.3 911.1 985.2 1076.4 1110.8 1173.5

PUBS, TAVERNS & BARS

$0

$1,000

$2,000

$3,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

332.5325.2283.5283.5293.3308.1332.7

CLUBS (HOSPITALITY)

RESTAURANTS & CAFES TAKEAWAY FOOD SERVICE

$0

$1,000

$2,000

$3,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

649.3636.5648.7668.4612646.2529.7

633.3608.9616.8627.8576.6633.1529.7529.7 633.1 576.6 627.8 616.8 608.9 633.3

CATERING SERVICES

nominal

real



$ M

illio

ns

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2009 2010 2011 2012 2013 2014 2015

7918.47606.57153.96978.1

6540.26465.96280.37720.4

7276.46930.66740.4

6249.46251.86280.36280.3 6251.8 6249.46740.4 6930.6

7276.47720.4

SALES PER TYPE OF BUSINESS

TOTAL INDUSTRY SALES: REGIONAL

$ m

illio

n

0

500

1000

1500

2000

2500

3000

Auckland Waikato Bay of Plenty Manawatu-Wanganui Wellington Rest of Nth Is Canterbury Otago Rest of Sth Is

555467

1,024

497

894

400351531

2,887

430364

888

499

945

360256

461

2,078

2009 2014

(projected)

up 14.5%

TOP REGIONAL SALES PERFORMANCES IN 2014:

“OTAGO”...

up 11.5%

...AND MANAWATU-WANGANUI REGION

The best performing sector in 2013, up 7.9 per cent

(projected)

(projected)


The best performing sector in 2014, up 9.8 per cent

(projected)

!

�30

SALES REVENUE SA

LES

GRO

WTH


$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2009 2010 2011 2012 2013 2014 2015

515218507404485339478838

449993451608435105 502338485385470187462529429984

451561435105435105 451561429984

462529 470187 485385 502338

National PER OUTLET average sales

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

535330525306487309491399464639477359473072521947502511472095474663443979461552473072473072 461552 443979 474663 472095 502511 521947

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

346248338691330697319550298517289757272971337592323994320373308667285243280162272971272971 280162 285243 308667 320373 323994 337592

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

712189704184717427647469

587903527845540156 694384673626695029

625417561762

510367540156540156 510367561762

625417695029 673626 694384


‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

722826724276673397678230696675

751463813203

721018692846652373655130665697

726580

813203813203

726580665697 655130 652373

692846 721018

CLUBS (HOSPITALITY)

RESTAURANTS & CAFES

TAKEAWAY FOOD SERVICE

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

845443848667847974864683781609

866220

580811

824307811840821500835233

746854

837537

580811580811

837537

746854

835233 821500 811840 824307

CATERING SERVICES

nominal

real



Perc

enta

ge c

hang

e

-2-1012345678

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 ‘13-’14 '14-'15

1.5

4.5

1.4

6.4

-0.4

3.8

National sales revenue per outlet is projected to increase 4.5 per cent from 2013 - 2014, reaching $507,404 and by 1.5 per cent from 2014 - 2015. This is the average revenue generated overall for a hospitality outlet in New Zealand. Sales growth for the industry was a relatively strong 6.3 per cent from 2013 - 2014, however outlet growth is projected to be just 1.7 per cent (a total of 251 new outlets overall), which will assist the per outlet revenue levels to hit a new high. Over the five year period 2011 - 2015 total sales revenue per outlet will increase 14.5 per cent. !The best performing sector from 2013 - 2014 is projected to be the restaurants and cafes sector, which is expected to grow sales revenue per outlet by 7.8 per

cent. This group had the strongest sales growth in 2014 and a projected increase in the number of businesses of 1.9 per cent (136 in total). By contrast the number of pubs, taverns and bars businesses is projected to increase by 4.5 per cent from 2013 - 2014, with sales growth of just 2.6 per cent, and this has resulted in this group reducing the per outlet productivity by 1.8 per cent, to $704,184 in 2014. !Although the catering services sector struggles with per employee productivity, it is consistently the most productive sector in terms of sales revenue per outlet. In 2014 despite sales revenue per outlet for catering services increasing by just 0.1 per cent, it remained the top performer, with $848,667 per outlet sales revenue.

(projected) (projected)(projected)

(projected) (projected) (projected) (projected)

(projected) (projected) (projected)

(projected)

!

�31

Overall sales “productivity” - based on average sales per employee - is projected to increase 4 per cent from 2013 - 2014 to reach $71,089. This indicates a solid 10.4 per cent increase in employee productivity levels over the five year period 2010 - 2014. Employee levels have been contained over that five year period as the industry has worked through the recessionary years. !Unsurprisingly the takeaway sector is the most productive in terms of sales per employee. In 2014 employee productivity for this sector is expected to reach $84,356, a 2.2 per cent increase. !

Pubs, taverns and bars, will report a similar 2.1 per cent increase and sit just behind the takeaway sector in terms of productivity per employee at $83,480. The pubs, taverns and bars group reduced employee numbers by just under 5 per cent from 2009 - 2013 and further reductions will likely see it becoming the most productive sector in terms of employee productivity. !While catering services has the highest sales revenue per outlet, it records the lowest sales revenue per employee. This is projected to increase to $59,486 in 2014, up 7.2 per cent from the sectors lowest point in 2011 ($55,485). There will be a small decrease in employee productivity however from 2014 - 2015.

SALES REVENUE SA

LES

GRO

WTH


National PER EMPLOYEE average sales

RESTAURANTS & CAFES TAKEAWAY FOOD SERVICE

nominal

real



$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

2009 2010 2011 2012 2013 2014 2015

71337710896832867078642016440162834 6955468004675936417763197630976283462834 63097 63197 64177

67593 68004 69554

$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

660206557261630621885998961376599676436962727597066007057322593445996759967 59344 57322 60070 59706 62727 64369

$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

85210843568251881457773547666971663 8308080695799427868373914741307166371663 74130 73914

78683 79942 80695 83080

Perc

enta

ge c

hang

e

-2-1012345678

‘09-‘10 ‘10- ‘11 ‘11-’12 ‘12-’13 ‘13-’14 '14-'15

0.3

4

1.9

4.5

-0.3

2.5


$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

83410834808174073504

685406136561722 798797985779188

7100165492

593336172261722 5933365492

7100179188 79857 79879

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

74887759817539971256725997533079569

730157268473045688296937172836

795697956972836 69371 68829

73045 72684 73015

CLUBS (HOSPITALITY)PUBS, TAVERNS & BARS

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

58495594865908058529554855983357702

5703356905572355653653018578525770257702 57852

53018 56536 57235 56905 57033

CATERING SERVICES

(projected)



(projected)

!

�32

HUMAN ECONOMIC CAPITAL

PHOTO: ARBITRAGEUR WINE ROOM, WELLINGTON

!

�33

HUMAN ECONOMIC CAPITAL

Remuneration, Productivity & Labour Pool indicators

PHOTO

: ARBITRAGEUR W

INE ROO

M, W

ELLINGTO

N

HU

MAN

EC

ON

OM

IC C

APITA

L

Employment forecasts made by the Ministry of Business, Innovation and Employment suggest overall employment demand will rise strongly over the next two and a half years (peaking in March 2015) in response to stronger economic growth associated mainly with the Canterbury rebuild. !While New Zealand’s total employment grew by only 0.4% in the 2013 year to March (with the hospitality industry slightly ahead of this at 0.6%) it grew rapidly over the second half of 2013 and this momentum is expected to carry over to the next two years. !!!!!!!!!!!!!!!!!

Employment is forecast to increase by 180,700 by March 2016, growing by 2.6 per cent in the 2014 year to March, 2.7 per cent in 2015, and 2.6 per cent in 2016. This growth rate is only slightly below the pre-recession average employment growth rate of 2.8 per cent over the 2003-07 period. !For the hospitality sector annual employment growth is expected to be 2.2 per cent in 2014, 3.7 per cent in 2015 and 1.8 per cent in 2016. !Employment growth in Auckland and Canterbury is expected to dominate national employment growth, together accounting for about 47 per cent of total employment growth through to March 2016. Auckland will continue to drive national employment growth and Canterbury will also contribute strongly to national employment growth as the rebuild gathers momentum during the year to March 2015 and continues into the year to March 2016.


HOSPITALITY INDUSTRY EMPLOYEE COUNT

2013 2015 (projected)

2015 VS

2013

Cafes and Restaurants 57,010 61,050 7.1%

Takeaway foodservices 19,100 19,980 4.6%

Catering services 10,980 11,100 1.1%

Pubs, Taverns and Bars 13,850 14,430 4.2%

Clubs 3,760 4,440 18.1%

TOTAL 104,700 111,000 6.0%

The hospitality industry workforce is forecast to grow 7.7% by 2016.

TOTAL HOSPITALITY INDUSTRY EMPLOYMENT

2005 2015 (projected)

74,340

111,000

!

�34

REM

UN

ERAT

ION

DAT

A

REMUNERATION DATA Average HOURLY WAGE Growth: 2009 - 2013

Posi

tion

Bar ManagerBar Person

BaristaBreakfast ChefCafé AssistantCafé Manager

CashierChef de Partie

CleanerCommis ChefCounter CookDuty Manager

Executive ChefFood & Beverage Manager

Food to Go AssistantFront Office

Function ManagerHead Chef

Head Waiter Maitre DHost/HostessJunior Cook

Kitchen HandOffice Manager

Pastry ChefRestaurant Manager

Security/Door StaffSenior Cook

Sole Kitchen OperatorSous Chef

Student/ApprenticeWait Staff

Wine Waiter

Percentage Change

-10 -5 0 5 10 15 20 25 30

Nominal Change Real Change

When analysing remuneration trends in the hospitality industry over a five year period (2009 – 2013), average hourly rates increased by between 0.6 per cent (commis chef position) to 23.9 per cent (wine waiter). !Four positions recorded a decrease in their average hourly wage rates over the five year period under analysis; head chef by 1.6 per cent, counter cook by 4.1 per cent, executive chef by 6.1 per cent and food and beverage manager by 13.2 per cent. !The average hourly rate across all hospitality positions in 2013 was $16.46, a 3.5 per cent increase over the year prior. Unfortunately this is still well below New Zealand’s average hourly wage of $27.00. Across New Zealand, average hourly wages rose 2.6 per cent in the last year and since September 2008 the average wage after tax has increased by a total of

22 per cent. However, in the hospitality industry hourly wage rates show more subdued growth, as hospitality operators strive to keep their labour costs under control. !The real growth, adjusted for inflation, indicates that 24 of the 32 positions surveyed had wage growth. This growth ranged from 0.5 per cent (pastry chef) up to 20 per cent for wine waiters. The four positions that remained static, or with a less than 1 per cent increase, over this period were bar manager, barista, food to go assistant and pastry chef.


CIATION ANNUAL REM

UNERATION SURVEY


1 Labour costs rank as the number one challenge facing hospitality operators. For 2014, 51 per cent predict this will be their top challenge.

!

�35

REM

UN

ERAT

ION

DAT

A

REMUNERATION DATA Average SALARY Growth: 2009 - 2013

Posi

tion

Bar Manager

Bar Person

Barista

Breakfast Chef

Cafe Assistant

Café Manager

Chef de Partie

Commis Chef

Duty Manager

Executive Chef

F & B Manager

Front Office

Function Manager

Head Chef

Head Waiter Maitre D

Host/Hostess

Housekeeper

Junior Cook

Kitchenhand

Owner / Operator

Pastry Chef

Restaurant Manager

Senior Cook

Sous Chef

Wait Staff

Wine Waiter

Percentage Change

-50 -40 -30 -20 -10 0 10 20 30 40 50

Nominal Growth Real Growth



CIATION ANNUAL REM

UNERATION SURVEY

The average salary for a worker in New Zealand is just over $55,000 a year before tax. This is close to the typical take home salary of a hospitality owner/operator in 2013 who earns, on average, $56,578. While the average wage in New Zealand increased 22 per cent from 2009 – 2013, for owners of hospitality businesses that increase was a more subdued 11.6 per cent. !A few positions in the industry recorded significant salary growth over five years – including food and beverage managers and front office workers - however many of the industry’s key positions were more likely to have recorded a decline in salary rates over the five years under analysis. Those positions that recorded an increase included cafe managers, who saw their salary increase from $42,866 in 2009, to $46,591 in 2013. Restaurant managers also increased their salary package by 6.1 per cent - from !

$46,889 in 2009 to $49,727 last year. !Overall analysis of the real salary growth over 2009 – 2013, adjusted for inflation, shows that for 12 out of the 26 positions surveyed their salary decreased. Several key positions recorded decreases, including executive chefs (down 8.6 per cent in real terms), maitre d’ / head waiter (down 2.2 per cent), pastry chefs (down 19.5 per cent) and commis chef (down 10 per cent). Conversely a chef de partie was 6.1 per cent better off in 2014 in real terms and sous chefs also recorded a 2.8 per cent increase. !As labour is one of the largest costs to our businesses (and ranks as our biggest challenge), operators will continue to keep remuneration levels in check. Impacting this endeavour, however, is the industry’s skilled worker shortage, which drives remuneration rates up.

!

�36

2009 2010 2011 2012 2013 2013

Rate % change '08-'09

Rate % change '09-'10

Rate % change ‘10-’11

Rate % change ’11-’12

Rate % change ’12-’13

Annual Salary

Remuneration

Bar Manager $17.90 13% $17.50 -2.2% $19.33 10% $18.57 -4% $18.37 -1% $42,368

Bar Person $13.95 4.5% $14.43 3.4% $14.74 2% $15.04 $

2% $15.40 2% $23,593

Barista $14.88 3.9% $14.57 -2.1% $15.37 5% $15.58 $

1% $15.89 2% $27,000

Breakfast Chef $15.93 2.2% $16.20 1.7% $16.75 3% $16.75 0% $16.96 1% $31,083

Café Assistant $13.53 7.4% $13.83 2.2% $14.40 4% $14.43 0% $14.69 2% $42,000

Café Manager $17.72 7.1% $18.33 3.4% $18.59 1% $18.03 -3% $18.63 3% $46,591

Cashier $16.61 -4.9% $15.10 -9.1% $15.82 5% $17.95 13% $17.00 -5% ~

Chef de Partie $16.89 5.2% $16.60 -1.7% $17.11 3% $17.50 2% $17.52 0% $40,783

Cleaner $14.07 7.5% $14.40 2.3% $15.00 4% $15.14 1% $15.98 6% $23,500

Commis Chef $15.11 2.9% $15.33 1.5% $15.29 -0.2% $15.92 4% $15.80 -1% $34,417

Counter Cook* $15.96 13.2% $14.82 -7.1% $15.41 0.4% $15.54 1% $15.48 0% ~

DJ $46.69 28.7% $41.72 -10.6% $33.17 -20% $49.58 49% $46.64 -6% $28,333

Duty Manager $16.47 4.4% $16.29 -1.1% $16.96 4% $16.90 0% $17.41 3% $37,048

Executive Chef $26.54 16% $27.08 2% $26.43 -2% $27.36 4% $24.52 -10% $63,567

F & B Manager $20.82 6.1% $20.97 0.7% $18.41 -12% $22.41 22% $18.81 -16% $68,185Food to GoAssistant $14.49 14.9% $14.36 -0.9% $13.74 -4% $13.61 -1% $14.88 9% ~

Front Office $14.87 -4.9% $16.03 7.8% $15.68 -2% $16.14 3% $16.30 1% $41,353Function Manager $18.41 -7% $19.65 6.7% $18.57 -5% $19.57 5% $19.85 1% $49,889

Head Chef $21.84 7% $21.67 -0.8% $21.17 -2% $20.66 -2% $21.71 5% $55,844Head Waiter Maitre D $16.59 4.4% $16.91 1.9% $17.38 3% $17.44 0% $18.26 5% $39,143

Host/Hostess $15.87 5.5% $15.02 -5.4% $16.37 9% $15.36 -6% $17.20 12% $39,250

Housekeeper $14.82 5.8% $15.10 1.9% $15.71 4% $14.87 -5% $15.22 2% $46,333

Junior Cook* $14.30 9.7% $14.50 1.4% $14.90 3% $14.97 1% $15.27 2% $33,429

Kitchen Hand $13.00 4.8% $13.35 2.7% $13.73 3% $14.12 3% $14.36 2% $27,208

Office Manager $20.05 6.6% $20.83 3.9% $21.03 1% $20.90 -1% $20.92 0% $53,818

Owner / Operator $26.04 19.6% $21.24 -18.4% $23.95 13% ~ ~ ~ ~ $56,578

Pastry Chef $17.40 2.2% $17.56 0.9% $17.36 -1.1% $17.87 3% $17.82 0% $36,800Restaurant Manager $19.40 10.5% $18.19 -6.2% $19.31 6.2% $19.33 0% $19.49 1% $49,727

Room Attendant $13.45 3.4% $13.59 1% $14.02 3.2% $14.52 4% $14.51 0% $24,364Security/Door Staff $18.61 14% $19.19 3.1% $18.31 -5% $20.77 13% $22.07 6% $31,700

Senior Cook* $16.85 2.1% $16.59 -1.5% $17.07 3% $17.86 5% $18.80 5% $35,583Sole Kitchen Operator* (Quals) $16.25 9.4% $16.20 -0.3% $15.99 -1.3% $16.47 3% $17.58 7% $29,333

Sous Chef $18.72 8.1% $18.94 1.2% $19.31 2% $18.63 -4% $19.51 5% $47,500Student / Apprentice $13.25 16.1% $13.44 1.4% $13.61 1.3% $13.59 0% $14.20 4% $20,000

Wait Staff $13.94 7.2% $14.15 1.5% $14.31 1.1% $14.50 1% $14.90 3% $31,217

Wine Waiter $15.52 6.7% $15.04 -3.1% $15.24 1.3% $16.46 8% $19.06 16% $29,333

REMUNERATION DATA Average HOURLY and SALARY Remuneration by Position: 2009-2013

REM

UN

ERAT

ION

DAT

A

* No Qualifications Source: Restaurant Association of New Zealand


!

WELLINGTON

AUCKLAND

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

40090384903724036730343403257031990

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

14420138501348013370129901303012630

REG

IONA

L FI

GUR

ES: E

MPL

OYM

ENT

Perc

enta

ge C

hang

e

-10

-5

0

5

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

4.23.41.4

7.05.4

1.8Pe

rcen

tage

Cha

nge

-10

-5

0

5

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

4.12.7

0.82.9

-0.3

3.2

HOSPITALITY EMPLOYMENT GROWTH NATIONAL: 2009-2015


National Figures National Annual Employment Growth

Tota

l Em

ploy

ed P

erso

ns

0

20,000

40,000

60,000

80,000

100,000

120,000

2009 2010 2011 2012 2013 2014 2015

11100010700010470010403010187010040099950

Perc

enta

ge c

hang

e

-10

-5

0

5

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 ‘13-’14 '14-'15

3.72.2

0.62.11.50.5

SOURCE: STATISTICS NEW ZEALAND & RESTAURANT ASSOCIATION

REGIONAL: 2009-2015

WAIKATO

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

8385855585708660870083808970

Perc

enta

ge C

hang

e

-10

-5

0

5

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

-2-0.2-1-0.5

3.8

-6.6

BAY OF PLENTY

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6085596258405970581057305700

Perc

enta

ge C

hang

e

-10

-5

0

5

10

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.12.1

-2.2

2.81.40.5


national comparison

(projected)


(projected)

(projected)


(projected)

(projected)(projected)

(projected)(projected) (projected) (projected)


!

�38

MANAWATU-WANGANUI

REST OF NORTH ISLAND

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

9520918290908980912094309340

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

4864467845804670474047704720

REG

IONA

L FI

GUR

ES: E

MPL

OYM

ENT

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

42.1

-1.9-1.5-0.6

1.1

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

3.71.01.2

-1.5-3.3

1.0


CANTERBURY

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

14105133251304012720133201354013670

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

5.92.22.5

-4.5-1.6-1

REST OF SOUTH ISLAND

OTAGO

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6194642063406600666069406790

05000

10000150002000025000300003500040000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6539652065106330617060206140

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

0.30.22.82.62.5

-2

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

-3.5

1.3

-3.9-0.9

-4

2.2

HOSPITALITY EMPLOYMENT GROWTH NATIONAL: 2009-2014


Zealand



national comparison



(projected)(projected) (projected) (projected)

(projected) (projected)(projected) (projected)


GETTING TO KNOW

GENERATION Y

BY NICOLA RICHARDS, MONSOON POON Our Gen Y team were mostly born in the 90s, an era of huge growth in technology. They prefer to communicate quickly and effectively - mostly through email, text and social networks. They are motivated by clear goals, incentives and participation. Generation Y’s are ambitious and confident, they respond well to feedback and gratitude and will look for opportunities for growth, often expecting things to move very quickly! !So how can we get the best results from our Gen Y team? Here are some suggestions: !1. Your induction information should include career

path options and opportunitIes for growth within the workplace.

2. Communicate team events, reminders and meetings through text message.

3. Create a staff facebook page where the team can communicate with managers and each other. Utilise this page to follow up training sessions with fun quizzes, photos and team announcements.

4. Celebrate Success! Emphasise fun and create energy, seek feedback from your team at meetings, on shift and through facebook.

5. Email your roster with some personal notes – congratulations on sales results, birthday wishes, welcome to new team members and so on.

6. Set goals for individuals and team to strive for. Share your top sales figures – best selling dishes, cocktails and the like – the team need to know they have contributed to the success of your business.

7. Catch people doing something right and give them an instant reward. !

Generation Y wants to be involved and included. They are keen to contribute and participate in decision making, there are a number of ways you could make this happen. Ask for feedback when creating new menus and wine lists. Include team members in tasting new products. Ask them to run the next wine tasting,

this often gives you a better turnout and gives the presenter(s) a great new challenge. Create a mentor or buddy program where your more experienced team are contributing to staff training. Train the trainer and let them pass their skills on. Reward your managers for helping people grow, focus on upskilling and cross-training. Create a staff referral program which enables your current team to recommend a friend for available positions. Friends and family are very important to Gen Y and a great team culture with like minded people can stabilise your staff turnover. !Like everyone, Gen Y will experience failure or mistakes – use this as an educational moment and provide some life mentoring with your own stories. Take the time to guide and nurture your Millenials, they and your customers will love you for it!

Millenials, Gen Y, the Me Me Me Generation. Call them what you will but Gen Y are here to stay and they make up the bulk of our workforce so it is worthwhile getting to know who they are, what motivates them and how we can connect best.

!The typical

hospitality employee is young, female, born in New

Zealand and working full time. !The hospitality industry employs a much higher proportion of younger workers than the national economy. More than 40 per cent of the cafe, restaurant and bar sectors workers

are under the age of 25.!There were more female workers than male in the cafe, restaurant and bar sectors in 2013. Females represented

57.4 per cent of the workforce. !Nearly 38 per cent of workers in cafes, bars and

restaurants worked part-time hours in 2013. Those working 40-49 hours account for

the highest share of employees.

SOURCE: SERVICE IQ: PROFILE OF THE CAFES, RBARS AND RESTAURANTS SECTOR IN NEW ZEALAND 2014

!

�40

The graph (right) indicates nationally, the average number of employees within the different sectors of the food industry, with a comparison between 2009 and the projected 2015 staffing levels provided. !The average number of employees per hospitality business was 7.1 in 2013, a figure which has increased slightly over the five year period 2009 - 2013 and is projected to increase to 7.2 in 2015. This figure is shown as a watermark in the regional analysis on the following pages. !For almost all sectors the average number of employees remained fairly stable from 2009 - 2013. The exception was catering services, which noted a 43 per cent increase in staff per outlet during this period. This was driven in large part by a decline in the number of catering outlets, from 912 in 2009, to 765 in 2013 (and projected to be 768 in 2015). Employee numbers continued to increase, however, for catering services, although they have seen a drop in 2013 and are projected to decline again in 2014.

Overall sales “productivity” - based on average sales per employee - is projected to increase 4.4 per cent from 2013 - 2015 to reach $71,337. This indicates a solid 11.1 per cent projected increase in employee productivity levels over the five year period 2011 - 2015. !Since 2009 employee workforce levels have increased by minimal levels year on year, while the industry has continued to record sales growth, even through the recessionary years. !Of course, measuring overall workforce productivity is a subjective matter, especially in hospitality; can one staff member be considered less productive than another based solely on sales? This report therefore simplifies productivity measurement to purely financial terms but rationalises that soft-skills and service standards should be considered within your own business’ judgement of overall productivity. !The aim of this information is to guide operators towards goals and targets in the operation of their business that are based on national and regional averages. These averages serve as guides only.

!PRODUCTIVITY LEVELS

0

3.2

6.4

9.6

12.8

16

2009 2015

7.26.99.610.2

8.58.8

14.5

10.1

4.13.8

8.17.9

Restaurants, cafes and coffee housesTakeaway Food ServicesCatering ServicesPubs, Taverns & Bars Clubs (Hospitality)TOTAL

EMPLOYEES BY OUTLET TYPE

NATIO

NAL

FIGUR

ES: E

MPL

OYE

E PR

ODU

CTI

VITY


Perc

enta

ge C

hang

e

-2

0

2

4

6

8

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

0.3

4

1.9

4.5

-0.3

2.51.10.6

-0.4

1.9

0.11.6

Employees per Outlet Sales Per Employee

GROWTH IN EMPLOYEES PER OUTLET VS SALES PER EMPLOYEE

$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 ‘14 '15

Real Nominal

713377108968328670786420164401628346955468004661956479361346622696283462834 62269 61346 64793 66195 68004 69554

SALES PER PAY-ROLLED EMPLOYEE NATIONAL AVERAGE

nominal

real

(projected)

STAFFING LEVELS

Source: Restaurant Association of New Zealand, Statistics New

Zealand

(projected)

(projected)

!

�41

SALES PRODUCTIVITY Sales distribution per employee by sector !

NATIO

NAL

FIGUR

ES: E

MPL

OYE

E PR

ODU

CTI

VITY

RESTAURANTS, CAFES & COFFEE HOUSES

$0$20,000$40,000$60,000$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

660206557261630621885998961376599676436962727597066007057322593445996759967 59344 57322 60070 59706 62727 64369

$0$20,000$40,000$60,000$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

852108435682518814577735476669716638308080695799427868373914741307166371663 74130 73914 78683 79942 80695 83080

TAKEAWAY SERVICES

$0$20,000$40,000$60,000$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

58495594865908058529554855983357702

5703356905572355653653018578525770257702 57852 53018 56536 57235 56905 57033

CATERING SERVICES

$0$20,000$40,000$60,000$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

83410834808174073504685406136561722 7987979857791887100165492593336172261722 59333 65492 71001

79188 79857 79879


Source:Restaurant Association of New Zealand, Statistics New

Zealand

SALES PER PAY-ROLLED EMPLOYEE - BY OUTLET


While overall sales “productivity” - based on average sales per employee - is projected to grow to $71,337 by 2015, analysis of the different sectors in the hospitality industry, however, shows some variance in “productivity”. !Productivity by employee slipped by 0.9 per cent in 2013 (vs 2012) for restaurants and cafes, impacted by the modest sales growth for the sector of just 0.8 per cent. However, by 2015 this is projected to grow to $66,020 assisted by a much stronger sales performance in 2014. While many of the different industry groups continue to reduce their total number of employees, the restaurant and cafe sector is projected to increase it’s workforce by 3.7 per cent from 2014 - 2015. !Conversely, while the number of people employed in takeaway / food to go operations is also projected to increase by 3.7 per cent from 2014-2015, the sector’s steady sales growth will help to offset the increase to enable productivity levels to reach $85,210 in 2015. The takeaway food services group is the most productive sector in the industry (just). !Employee productivity for catering services is projected to record a small increase in 2014 to reach $59,486, despite disappointing sales results for the sector in 2014 (down 1.9 per cent). This level of productivity is near the peak in 2010 of $59,833,

which came at a time that the sector recorded 22 per cent sales growth over the year previous. The workforce total for catering services is projected to decline by 2.6 per cent in 2014 but increase to 11,100 in 2015. !Pubs, taverns and bars achieved the largest increase in employee productivity in 2013, when productivity levels increased by 11 per cent to reach $81,740. The sector was the best performing in the industry that year from a sales aspect, seeing growth of 7.9 per cent. The per employee sales productivity is set to increase again in 2014 and 2015, assisted by the reduction in the total number of employees employed in the sector over the past five years. !!!

nominal

real

4%

59%

37%

STAFFING LEVELS: IN 2014, MY BUSINESS PLANS TO

Hire more employees


CIATION HO


Keep staffing levels the sameReduce the

number of employees



�42

REG

IONA

L FIG

URES

: EM

PLO

YEE

PRO

DUC

TIVI

TY

WAIKATO

AUCKLAND

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6.346.49 6.54

6.81 6.71 6.77 6.85

$0

$15,000

$30,000

$45,000

$60,000

$75,000

$90,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

753287501472556703956729567117649587344571759702916799764303648956495864958 64895 64303 67997 70291 71759 73445

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

76.77 6.83

6.67 6.65 6.566.34

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

6516462046595455483851402

5884251427 63535

59354576865297049116

568945142751427

5689449116 52970

57686 5935463535

Perc

enta

ge C

hang

e

-4

-2

0

2

4

6

8

‘09-’10 ‘10-’11 ‘11-12 ‘12-’13 '13-'14 '14-'15

0.4

3.43.14.6

0.3

3.3

1.20.9

-1.5

4.1

0.82.4

Employees per Outlet Sales per Employee

Perc

enta

ge C

hang

e

-15

-10

-5

0

5

10

15

‘09-’10 ‘10-11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

54.2

8.66.7

-12.6

14.4

-3.4-1.4-0.3

-2.3

0.9

-3.3



SALES PRODUCTIVITY Sales Per EmployeeAverage Employees Per Outlet

Average Employees Per Outlet Sales Per Employee

Growth in Employees Per Outlet Vs. Sales Per Employee


Thirty eight per cent of the hospitality industry's sales occur in the Auckland region. The region also employs 36 per cent of the total industry workforce and another 38 per cent of the country's outlets. Auckland also has a highly productive workforce. Average sales per employee are projected to reach $75,328 in 2015, an expected steady increase in employee productivity over the five year period 2011 - 2015 of 12 per cent. While the number of employees for the region increased in 2013 by 1.4 per cent (over 2012) and is projected to increase 3.4 per cent in 2014 and 4.2 in 2015, this is offset by the number of new businesses opening in the region, meaning the average number of employees per outlet remains below national levels.

Sales per employee for the Waikato region are projected to increase by 9.4 per cent in 2015 (over 2013). This increase in productivity is assisted by strong sales growth (7.5 per cent) from 2012 - 2013, followed by a 4 per cent sales increase in 2014, as well as a slowly declining number of workers for the region. The number of outlets in the Waikato region also declined slightly in 2013 but are expected to rise slightly in 2014 and 2015. Although Waikato is still comparatively one of the least productive regions based on employee productivity, another year of solid sales growth will assist it to move closer to the national average of $71,337 (projected for 2015). !

nominal

real


Zealand

national comparison

(projected)

(projected)

(projected)

(projected)

(projected)

(projected)

(projected)

(projected)

�43

BAY OF PLENTY

MANAWATU/WANGANUI

$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

84663854427825379615811187909976335

8254681734758107690377511764807633576335 76480 77511 76903 75810

81734 82546

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6.76.95 6.93 6.82

6.596.78 6.88

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

Real Nominal

598525892360839576725137752949

44877 583565636658940557084909251196

448774487751196 49092

55708 58940 56366 58356

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7.17 7.27 7.3 7.287.11 7.23 7.2

Perc

enta

ge C

hang

e

-12

-4

4

12

20

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.6

-3.1

5.5

12.3

-3

18

-0.4

1.7

-2.3-0.3

0.41.4


Perc

enta

ge C

hang

e

-12

-4

4

12

20

‘09-’10 ‘10-11 ‘11-’12 '12-‘13 '13-'14 '14-'15

-0.9

9.2

-1.7-1.9

2.63.61.52.9

-3.4-1.6-0.3

3.7


REG

IONA

L FIG

URES

: EM

PLO

YEE

PRO

DUC

TIVI

TY


Average Employees Per Outlet


Sales Per Employee



Over the five year period 2009 - 2013 the Bay of Plenty region raised productivity levels per employee by 35.6 per cent. Levels are expected to decline slightly in 2014 and 2015, however, from their peak in 2013 of $60,839. While the projected sales per employee in 2015 is $59,852, 19 per cent lower than the national average of $71,337, the region has been looking strong in the first half of this decade. In particular sales growth from 2011-2012 was 15.3 per cent (the best performing region that year), followed by another 3.2 per cent sales growth in the period 2012-2013. The number of workers per outlet has also been slowly declining, whilst outlet growth has been static, assisting the region to grow employee productivity levels.

In terms of per employee productivity the Manawatu / Wanganui region has one of the most productive workforces in the country. Projected to increase to $84,663 in 2015, this sales per employee figure is 18.7 per cent higher than the national average. !The region has been impacted by weakening sales in recent years (a decline of 3.3 per cent over 2011-2012 and another 3.6 per cent decline from 2012-2013). However, sales growth in 2014 was 11.5 per cent, one of the strongest performances of any region in the country. This in turn assisted sales per employee levels to grow by 9.2 per cent.


Zealand

...SALES PRODUCTIVITY

(projected)

(projected)


(projected)

(projected)


�44

REST OF THE NORTH ISLAND

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

54065541285750362361

545075737053394

527135177955708

6023752083

554705339453394 5547052083

6023755708

51779 52713

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

6.93 7.046.81 6.68

6.86 6.816.96

WELLINGTON

5.05.56.06.57.07.58.08.5

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7.727.93 8 8.15 8.08 8.17

8.38

$0

$20,000

$40,000

$60,000

$80,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

65347645786314565550647196603274822

637136177661174633176184163846

7482274822

63846 61841 63317 61174 61776 63713

Perc

enta

ge C

hang

e

-15

-10

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.22.3

-3.7

1.3

-2

-11.7

2.61.1

-0.9

1.90.92.7


Perc

enta

ge C

hang

e

-12-8-4048

121620

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

-0.1

-5.9-7.8

14.4

-5

7.4

2.2

-0.7

2.7

-1.9-3.3

1.6


While a significant 12 per cent of the hospitality industry's sales are made in the Wellington region and it employs 13 per cent of the industry’s workers, this district has struggled over recent years. Regional sales declined by 2.9 per cent from 2012-2013 and this corresponded with a 3.7 reduction in sales per employee, to $63,145, in 2013. The 5.1 per cent sales growth in 2014 is projected to assist productivity levels to rise however, by 2.3 per cent in 2014 and 1.2 per cent in 2015. While the number of workers is increasing only slightly year on year, the average number of employees per outlet is the highest in the country - projected to rise to 8.38 in 2015 - significantly higher than the national average of 7.22 employees per outlet. Even with relatively modest outlet growth, this is further compounding productivity woes.

After strong sales growth from 2011-2012 of 12.9 per cent, this 'region', which is a grouping of North Island districts, reported a reduction in sales over the following two years. Productivity per employee levels are also in decline and are expected to drop to $54,065 in 2015 - the lowest in the country. This is disappointing after the region's strong performance in 2012 when productivity levels reached $62,361. Overall the number of workers is projected to increase by a fairly minimal 1.0 per cent in 2014 and the average number of workers per outlet, at 6.96, is much lower than the national average. Better sales performance will assist the region to gain back some of this lost ground.

REG

IONA

L FIG

URES

: EM

PLO

YEE

PRO

DUC

TIVI

TY



Sales Per EmployeeAverage Employees Per Outlet





Zealand

the highest in the country

(projected)

(projected)

(projected)

(projected)

(projected)

(projected)

CANTERBURY

REST OF THE SOUTH ISLAND

$0

$20,000

$40,000

$60,000

$80,000

$100,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

Real Nominal

920418648082429

73000632286096563284

897408272779856

7051460417589466328463284 58946 60417

7051479856 82727

89740

5.05.56.06.57.07.58.08.5

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7.738.1

7.77 7.647.38 7.34

7.08

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

Real Nominal

76349768337083668970688746696564945

7444073499686246662165811647486494564945 64748 65811 66621 68624

73499 74440

5.0

6.0

7.0

8.0

9.0

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7.19 7.07 7.137.56

7.8 7.66 7.84

Perc

enta

ge C

hang

e

-12-8-4048

121620

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

-1.3

8.5

2.71.22.2

-1

2.3

-1.8

3.26

0.9

-1.7


Perc

enta

ge C

hang

e

-18

-12

-6

0

6

12

18

‘09-’10 ‘10-11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

6.44.9

12.915.5

3.7

-3.7 -3.5-0.5

-3.4-1.7-4.1

4.8


Despite the devastating upheavals experienced by the Canterbury region from the end of 2010 onwards, the region has recorded a steady increase in employee productivity, projected to increase to $76,349 in 2015. This is despite the relatively high average number of employee's per outlet, which at 7.84 is one of the country's highest (and 8.6 per cent above the national average). The Canterbury region has almost regained the 14 per cent market share it held in 2010. The region recorded 10.8 per cent sales growth from 2013-2014, representing 13.5 per cent of the industry's total sales. The number of workers is also slowly on the increase - however, the number of businesses is still well below the region’s peak in 2010 of 915 hospitality outlets.

This region, which is a grouping of South Island districts, reported the largest sales performance increase from 2012-2013. With 8.5 per cent growth it reached $522.6 million in annual sales. In 2014 sales growth was 6.2 per cent, more or less the national average growth for the year. In terms of productivity per employee the region has the strongest growth, projected to increase to $92,041 average sales per employee in 2015. This makes it the most productive workforce in the country. The average number of employees has reduced from a peak of 8.1 in 2010 down to a projected 7.08 in 2015, assisting this outstanding sale per employee performance.

REG

IONA

L FIG

URES

: EM

PLO

YEE

PRO

DUC

TIVI

TY



Average Employees Per Outlet


Sales Per Employee




Zealand

(projected)



(projected)

�46

OTAGO

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

Real Nominal

7265671626626276412368541

6227659235 7084068518606726193965493

602145923559235 6021465493 61939 60672

68518 70840

5.05.56.06.57.07.58.08.5

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7.22 7.25 7.337.52 7.56 7.45 7.46

Perc

enta

ge C

hang

e

-15

-10

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.4

14.4

-2.3

-6.4

10.1

5.1

0.1

-1.5

0.52.61.10.4


The Otago region recorded sales growth of 12.8 per cent back in 2011 (over the year previous) at a time when almost every other region was either in decline, or reporting very small sales gains. This assisted the region to reach its peak level of sales per employee productivity that year of $68,541. However 2012 recorded a decline in annual sales of 4 per cent, followed by a subdued 0.4 per cent growth in 2013. 2014 has seen a more positive performance - record sales growth of 14.5 per cent (the largest regional growth in the country) will see projected employee sales levels increase 14 per cent from 2013 - 2014. The average number of employees per outlet is projected to be 7.46 in 2015, higher than the national average of 7.22.

REG

IONA

L FIG

URES

: EM

PLO

YEE

PRO

DUC

TIVI

TY






ZealandPHO

TO: ARBITRAG

EUR WINE RO

OM

, WELLING

TON


(projected)

�47

AUT UNIVERSITY INDUSTRY INSIGHT

PHOTO: Q THEATRE, AUCKLAND

!

�48 AUT University School of Hospitality and Tourism Industry Insight 2014

THE CRITIC!!!!!!!!!!!!!BY DAVID WILLIAMSON, WARREN GOODSIR, LINDSAY NEILL, ALAN BROWN

AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

Love them or hate them, there is little more guaranteed to raise the blood pressure of passionate foodies and restaurateurs than ‘the reviewer’. Reviews are assumed to have the ability to make or break a business and, as a result, they engender strong emotions in business owners, media and consumers. However, given the levels of interest and passion that restaurant reviewers provoke in many people, surprisingly little is known about the history of reviews, their actual impact on businesses or how reviewers see themselves. Without doubt there has been a growing public interest in reviews and reviewers, be they in magazines, newspapers or online. As more people take on the role of reviewers themselves, through online sites like Dine Out and Trip Advisor, the traditional role of the magazine or newspaper based reviewer is an interesting subject for discussion. !The School of Hospitality and Tourism and AUT University has been researching restaurant reviews for a number of years, and as part of that process, we interviewed Peter Calder, one of New Zealand’s most well-known restaurant critics. Peter is one of New Zealand’s most prolific reviewers, with over 600 restaurant reviews to his name. We asked about the style of review adopted by Calder and his purpose for reviewing. The results are a rare opportunity to get inside the head of one of New Zealand’s most prominent reviewers and see what make him tick. !The New Zealand media produces a number of restaurant reviews for public interest, including those published in magazines, and on online review sites and blogs.

Peter Calder critiques restaurants for the Herald on Sunday, with reviews published in Living, the lifestyle section of that paper. Of the four main daily New Zealand newspapers only three – the New Zealand Herald, the Christchurch Press, the Dominion Post publish restaurant reviews for their readers. Newspapers published by APN News and Media in Auckland provide restaurant reviews from five different reviewers in three main publications: in Canvas, a glossy magazine in the Weekend Herald; in Viva, a fashion and lifestyle magazine in Wednesday's issue of the New Zealand Herald, and Living, a magazine in the weekly Herald on Sunday. !From it’s earliest inception, food and restaurant writing has been concerned with placing itself in the wider social context, establishing the ‘laws of taste’, and engaging in savage social satire by entertaining and informing readers in equal measure. As diners have become more interested in the subject of gastronomy and all things food-related, their expectations of professional reviewers have increased. Consequently, reviewers have had to take on a new role with readers expecting critics to give details of the context where food consumption occurs, while at the same time making it sound mouth-watering. !Over time, restaurant critics have progressed from merely informing the dining public of their opinions on food and restaurants to something much more. Not only are reviewers now viewed as trendsetters, but gastronomy programmes like MasterChef have made the critics the centre of attention, and with that, it appears, many people now aspire to become a critic.

‘Sir, I am seated in the smallest room in the house. Your review is before me. Shortly it will be behind me.’ German composer Max Reger responding to a critic. (Dukore, 1994)

PHO

TO: Q

THEATRE, AU

CKLAN

D

!

�49AUT University School of Hospitality and Tourism Industry Insight 2014

The role of the reviewer !The role of the restaurant reviewer has been described as developing from a trustworthy, structured, anonymous reporter of the facts, exemplified by Craig Claiborne, through to the literary ‘play-writer’ approach of Ruth Reichl or A. A. Gill. Some go so far as to suggest that reviewers themselves now seek to be the centre of attention, rather than humbly reporting on the ability of the service staff or rise of the newest culinary star. However, with Peter Calder, we find a restaurant reviewer who sees himself as a journalist first and a reviewer second. Rather than seeking the attention of the restaurateur, celebrity chef or hospitality industry elite, Peter Calder is happy to maintain separation from the operators he is writing about so that he can inform his audience with integrity. Calder clearly sees himself as a journalist first: !

What drew me to it [restaurant reviewing] was the offer of a job. I’ve done a lot of reviewing in my time, films, theatre, a little bit of books, a little bit of television — I see the word ‘review’ as being much more important than the word ‘restaurant’ in that phrase. I see the deployment of a critical perspective as not necessarily negative, as being an important role, but not the only role of journalism. !

Acknowledging that he shares the cultural capital of his audience, Calder positions himself and his writing at the level of interested ‘foodie’, rather than expert chef or experienced restaurateur: !

The person I see in my mind’s eye when I am writing knows a bit about food, but is not going to be an expert chef so I will not define the word ‘braised’ for them but I will define the word ‘sous vide’ or ‘molecular gastronomy’. I see myself as writing for a particular audience that goes out to dinner and even a smaller subset of that audience that likes reading reviews. !

Seeing himself as representative of the ‘average middle-class foodie’, Calder assumes a responsibility to his audience where the role as restaurant reviewer includes being a consumer advocate: !

I see myself as being in the consumer protection business. I’m a reviewer, I report on my experience of something and very much in the interests of the diner. … There is a certain level of public duty to the reader. I think my job is to look out for new places, or places that people tell me have gone downhill [as opposed to the French Café because everyone knows it is good]. Serve the reader … look after their needs. !!

Reviewer Reliability, Credibility and Integrity Calder considers the key role of the reviewer as being a voice for the consumer and a reliable judge of quality. However, Calder has minimal hospitality experience. !While a lack of industry experience could be detrimental to a critic’s credibility, Calder believes that his reputation as a reliable and impartial judge of restaurants is enhanced through deliberately separating himself from the social scene and interests of restaurateurs. Calder strongly feels that the credibility and reliability of his reviews depends on maintaining a professional distance from those he is reviewing: !

[I] never go to industry functions because I don’t believe that I should have any personal relationship with anyone in the industry. I don’t believe I should be on first name terms with or shaking hands with the proprietor … I believe I go in [to a restaurant] as a representative of the public. I book under my wife’s name, and am seldom recognised. !

Moreover, as a journalist there is a clear concern for maintaining his integrity: !

Journalistic integrity is about not accepting inducements and trying to remain anonymous … I have seen people who were reviewing an opening night party but they were writing like they were reviewing a restaurant, and I think that’s an utter disgrace. To be there partaking of the restaurant’s hospitality (for nothing [free]), eating their food for nothing, and then writing a review of it, how can it [the review] be credible? !

Whereas Calder has the interest of his readers in mind he believes that the expectation of restaurants are quite clear regarding reviews:

… they [restaurants] don’t see reviews as reviews, they see them as a link in the chain called publicity… a golden link. !

Recognising this desire for positive reviews and publicity serves to highlight for Calder the importance of maintaining a distance from the industry regarding the effect of his reviews: !

Yes, I have felt the pressure. People write in and say the restaurant is going to go to the wall as a result of your [review]. And that’s part of the reason why I don’t do this industry hobnobbing, because I don’t want to know that you have mortgaged your house, and it’s teetering on the precipice and one bad nudge from me and your whole life has gone down … I don’t want to know that.Our concern is that we report fairly, honestly and accurately. !

AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

...THE CRITIC


The power of reviews !While there has been plenty of anecdotal discussion in popular media regarding the power of reviews to revitalise or destroy restaurants, little empirical research has been undertaken to quantify the impact of restaurant reviews. Calder provides a crucial perspective on this topic, as the voice of the reviewers themselves is often missing when the impact of their work is discussed. Calder believes his reviews have the potential to be powerful in a positive way: !

A little Japanese place someone alerted me to ... I wrote them an ecstatic review … They wrote me an email about two weeks later saying ‘We were about to close the business, and now we are full every night. Thank you.’ !

However, he does not feel he has the power to negatively affect an established business. The contradiction that Calder highlights here is an interesting one. If his reviews have the positive power to rescue a business from closing, why do they not have the negative power to harm a successful operation? On this subject the research literature is remarkably silent. This highlights a clear opening for further research concerning the impact reviews have on restaurants. !While leaving the contradiction of positive and negative impacts largely unresolved, Calder feels the power of his reviews to influence the public comes from the particular following he has. He states that ‘a reviewer’s power to influence public response is in direct proportion to his demonstrated reliability’. Here reliability is viewed by Calder not as an ‘objective virtue’, but as a subjective quality that is determined by ‘the eye of the reader’. The credibility of a reviewer is also seen as a quality that must be fostered over time. For Calder, who has no culinary or restaurant background, credibility is established through the development of his relationship with the audience/readership. As Calder states: !

The reader has to get to know [me] and come to terms with [my] themes and tastes. I don’t believe that you should take any notice of any reviewer until you have read them for at least a few weeks. !

It is evident that building a relationship based on trust established through journalistic integrity along with reliable and credible reviews is important to Calder. However, as reviews are written after just one visit to the restaurant, the development of this relationship with the reader becomes even more important. As Calder states: !

Larissa Dubecki [of The Melbourne Age] … has a virtually unlimited budget. Frank Bruni [of The New York Times] goes to a restaurant three times before writing the review of it. There’s no way that I get the budget to do that.

!This indicates a possible limitation within review processes restricted by limited budgets. The variability of service is well documented and, therefore, it is conceivable that a critic could experience an anomaly at the time of their visit. As the review provides a ‘snapshot’ it is difficult to make generalisations from the results of a single restaurant review. !Approaches to reviewing !For Calder, the balance between ‘qualitative’, narrative-based ‘connoisseurial’ reviewing and ‘quantitative’, star-based, ‘procedural’ reviewing is not strongly related: !

I put the number of stars before I start writing … I shut my eyes and breathe deeply and think, yes, that’s the right number … very much an intuitive feeling. Whereas the narrative is the place where I play, where I try to have fun and I just try to write something that I would like to read. !

Calder’s position indicates a clear preference for the connoisseurial review over a procedural approach. As Calder emphasises, the narrative gives the reader an impression or flavour of the establishment without getting bogged down in details required to make an assessment that arrives at a number: !

I aspire to give a feeling, a flavour of the place without plodding through the place … a shopping list kind of approach [rather than a chronological listing of events and food]. I could draw up a chart and then calculate it on a little computer, and it comes out to 3.7 stars, but I never will. !Stars plug into our whole hurried mentality, but I really hate them because I write for people who read, not for people who count stars.

AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

...THE CRITIC


Again, Calder’s approach and attitude reflect the importance of the relationship between reader and reviewer. Calder follows his instincts when assigning stars. He is not concerned about objective measurement, as he feels the reliability and validity of his judgements are determined by his audience over a sustained period of time and justified by the audience’s congruent experience in the same restaurants. !Conclusion !Peter Calder adds a unique perspective to the role that restaurant reviewers play within both society and commercial hospitality. Calder, like many other reviewers, subscribes to an ethos founded by creating themes of trust and credibility with his readers. Calder facilitates this through writing consistent review narratives and by aligning his perceptions, taste and integrity to his readership.

These attributes have facilitated Calder’s reviewer status longevity in a media marketplace of village proportions, compared to, say, the metropolises of London or New York. !Yet unlike many other restaurant reviewers, Calder does not perceive himself as an arbiter of taste, promoter of cultural capital or advocate of the hospitality industry. Calder’s review style is not about placing himself as the centre of attention; rather, he is driven by the integrity he associates with being a journalist first and a reviewer second. This is evidenced by his fixation on being a consumer advocate. Calder writes with the aim of entertaining his audience and informing them of his experience. Peter Calder’s validity as a reviewer is obtained from the reader who understands his viewpoint and appreciates his comments.

AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

...THE CRITIC PH

OTO

: Q TH

EATRE, AUC

KLAND


HO

SPIT

ALIT

Y PE

RSO

NAL

ITY

THE HOSPITALITY PROFESSIONAL !burnout, empathy and job satisfaction !

We look at the phenomenon of burnout in the workplace, and also explore a basic contrast between Restaurant Association members who approach their work with an attitude of empathy for the needs and interests of others, and those who tend to approach their hospitality careers with a more cynical, self-serving attitude. !Do these 'hospitality personality' factors make a difference in levels of morale and how satisfied Restaurant Association members are with their daily work? These are some of the questions that the Restaurant Association set out to answer in sponsoring two online surveys conducted in November 2012 and February 2013, with the help of Dr. Larry Powell and Lindsay Neill at AUT University. !Burnout, and its negative impact on job satisfaction !A commonly-used measure of employee 'burnout' was included in the survey, to determine to what extent this would apply to Restaurant Association members. Respondents were asked to indicate how often in the course of their daily work they tend to feel “tired”, “disappointed with people”, “I've had it!”, “hopeless”, “trapped”, “helpless”, “worthless, like a failure”, or feel “physically weak and sickly”, “depressed”, or have “difficulty sleeping”. All of these are signs of heightened work stress and burnout, and when combined, make for a useful 10-item measure. !Beyond that, what we sought to find out was how much of a difference, if any, these burnout symptoms actually make in employee morale and job satisfaction. What we discovered was rather disturbing. For those who say they experience burnout on these dimensions – across the board, in all of the different areas of job satisfaction that we looked at – we found dramatic

differences in morale levels between those who report low, versus high, levels of burnout (as measured on a 10-item additive scale). !Burnout matters. For most aspects of their work, the Restaurant Association members who report that they experience high burnout levels are suffering a loss of between one-third to one-half of their job satisfaction, compared to those who rate their burnout levels as being lower. One can see in the first graph on this page, that this negative impact of 'burnout' on 'satisfaction' with one's hospitality work is especially pronounced with respect to whether the work is deemed to be “interesting and meaningful”, makes good use of one's “skills and experience”, has “growth opportunities”, is considered “difficult”, and offers promise of “job security”, “pay rises and promotion”, receipt of “recognition and praise for one's efforts” and “teamwork”.

In last year's Hospitality Report, we summarised the early findings of the 'hospitality personality' survey of Restaurant Association members – showing how a person's gender, need-satisfaction levels, self-concept, and various personality traits can have an effect on their levels of job satisfaction within the hospitality industry.

In this year's report Larry Powell, Lindsay Neill and David Williamson explore some further aspects of the hospitality personality.

Overall job satisfactionInteresting, meaningful

How skills usedEmployee relationsCustomer relations

Growth opportunitiesWork Difficulty

Care of employeesJob securitySalary level

Pay rise, promotionPerformance standards

Evaluation fairEmployee inclusionRecognition, praise

Teamwork

% ‘very satisfied’ with…0 20 40 60 80

Low Burnout High Burnout

EFFECTS OF ‘BURNOUT’ ON JOB SATISFACTION

!!

�53

HO

SPIT

ALIT

Y PE

RSO

NAL

ITY The advantage of imagining

yourself in another’s shoes - mitigating effects of ‘empathy’ !That's the bad news – the extent of the reported burnout, and it's apparently detrimental effects on morale within the industry. The 'good news' is that we found several other factors to be prevalent, such as a strong sense of empathy and trust among a majority of the members, that appear to have a mitigating effect on all of this. Hospitality workers with a well-developed capacity for empathy and a positive faith in human nature generally have lower burnout levels, and are more satisfied with their jobs in a variety of respects – as one can see in the two additional graphs below. !In the 2012-13 Restaurant Association survey, we included a 14-item 'empathetic-altruistic personality' scale. This measure indicates the extent to which a person sees his/her self as living in a 'you-and-me' social world in which he/she can afford to understand, cooperate with, and help others, as opposed to a more cynical 'you-or-me' world in which it's ultimately everyone for his/her self. !The scale measures agreement with statements such as “When I get upset at someone, I usually try to 'put myself in their shoes' for a while.” Another is “Personally assisting people in trouble is very important to me.” Another says “Before criticizing somebody, I try to imagine how I would feel if I were in his/her place.” In total, there are 14 of these pro-empathy items, which are combined to make the scale indicating one's overall empathetic tendencies. !As can be seen in the second graph on this page, there is a 37% difference between higher- and lower-empathy persons in how often they say they feel “disappointed with people” on the job, a 11% difference in how often they feel “trapped”, a 10% difference in feeling “hopeless” and a 9.5% difference in feeling “tired”. So maintaining an empathetic attitude towards work colleagues and customers does seem to help mitigate the cumulative effects of burnout on the job. !And in the last figure one can also see, rather dramatically, that the more 'empathetic' Restaurant Association members were, the more likely they were to report being satisfied with their work – across a variety of job dimensions. The only exceptions to this were salary level and job security, where high empathy individuals were found to be slightly less job-satisfied. !!

!!!!!!!!!!!!!!!!!!!!!!!!However overall, one can clearly see that the more empathy-oriented, altruistic-thinking Restaurant Association members generally find themselves less prone to experiencing burnout, as well as being more satisfied with their jobs. One implication of all this seems to be that actively promoting a more 'empathetic' mindset among employees could potentially be useful as a strategy for improving workplace relations and performance within the industry, particularly under conditions involving chronic, high stress. !

SYMPTOMS OF BURNOUT, by ‘Empathetic Personality’

...THE HOSPITALITY PROFESSIONAL !

AUT University School of Hospitality and Tourism Industry Insight 2014

Tired

Disappointed with people

Hopeless

Trapped

Helpless

Depressed

Physically weak, sickly

Worhtless, like a failure

Difficulties sleeping

"I've had it"


Low Empathy High Empathy

Overall job satisfactionInteresting, meaningful

How skills usedEmployee relationsCustomer relations

Growth opportunitiesWork Difficulty

Care of employeesJob securitySalary level

Pay rise, promotionPerformance standards

Evaluation fairEmployee inclusionRecognition, praise

Teamwork


Low Empathy High Empathy

JOB SATISFACTION BY EMPATHY LEVELS

!

AUT University School of Hospitality and Tourism Industry Insight 2014

AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

WHY DO PEOPLE WORK IN HOSPITALITY? There is an urgent need for us to find out why long term hospitality workers love their careers writes AUT University School of Hospitality and Tourism tutor, Shelagh Mooney. !When we look at significant providers of employment in New Zealand, the importance of the hospitality industry is clear. The bars and restaurant sector alone employs 4 per cent of the country’s 2,194,000 employees (‘Household Labour Force Survey: December 2012 Quarter - Statistics New Zealand’, 2013; Neil, 2013). !!It is strange, therefore, that in spite of the high number of employment opportunities provided by the industry, hospitality work is described in less than glowing terms: temporary, seasonal, convenient, physically hard, part-time and low skilled work. As a career option, it is associated with poor status, low pay, long hours and relentlessly high staff turnover. Perhaps, therefore, it is no surprise that the 2013 Restaurant Association of NZ and AUT University Hospitality Report highlighted one of the biggest headaches faced by employers is the difficulty of finding experienced, committed staff. Popular media is at least partly responsible for the negative yet curiously romanticised view of hospitality careers. However, there is inconsistency between the cult of the celebrity chef promoted by reality TV shows such as Masterchef and the gruelling physical demands of working in a ‘real’ kitchen. !Globally, the hospitality career is often associated with young people, women with family responsibilities, and migrants (Brotherton & Wood, 2008; Guerrier, 2008). Demographic statistics of the hospitality workforce in NZ appears to reflect international trends, nearly 40 per cent of employees are under 25 years of age, 62 per cent are female. In terms of ethnic origin, New Zealand European (52 per cent) form a majority, followed by Asians (16 per cent), Maori (11 per cent) and Pasifika at 4 per cent (Stokes, Norman, & Nana, 2010). Women in general (59.9 per cent in 2009), in particular Pasifika and Maori disproportionally, are concentrated in lower paid sectors and organisations (Parker & Arrowsmith, 2012). !!!

!!!!!!!!!!!!!!!!!Long-term hospitality careers !In 2013 research was conducted to discover what motivates hospitality workers to build long-term careers in hospitality and how age, gender, ethnicity and class influence this longevity. !Individuals with lengthy hospitality careers appear not to be exceptional, hospitality organisations such as the Grand Chancellor Hotel group have well supported recognition programmes for their long-serving employees (New Zealand Department of Labour, 2011). Reasons for staying in hospitality careers can vary from individual to individual, and are influenced by factors such as the age, gender, ethnicity and position of workers. Therefore, there are implications for hospitality employers if we take age, for instance; in terms of age-group shifts from 2006 to 2021 in the New Zealand labour market, the greatest decline has been projected to occur in the 25-44 age group. One Equal Opportunity Trust Report predicts that industries employing occupational groups with younger profiles, for example, Cafe/Restaurant Managers and Chefs will be short of staff in the future. However, age stereotyping means that older workers are perceived as slower to learn and consequently less efficient. Ultimately, they are seen as more expensive for the business. !How the research was carried out !Initially, memory-work group discussions explored the memories of those who had moved from lengthy careers in hospitality operations (for example, chefs, waiters and managers) into hospitality education (universities/polytechnics).

!


AUT

UN

IVER

SITY

INDU

STRY

INSI

GHT

WHY DO PEOPLE WORK IN HOSPITALITY? !These were followed by interviews with current hospitality employees working in a variety of roles, ranging from kitchen porter to manager. They were all fully engaged with their careers within hospitality operations, having spent a minimum of fifteen years in hospitality, mainly in New Zealand and Australia. The length of participants’ careers ranged from 16 to 41 years, with an average career of 28.5 years among the group. Some participants also had extensive hospitality work experience outside Australasia. The interviewees held a variety of roles. !Being able to compare the views of people who had left the industry after lengthy careers, versus those who were still working in hospitality many years later was a great advantage. Participants were asked to describe their career histories, their experiences of working conditions and pay. They were also asked why they stayed working in the sector and whether they considered hospitality work to be a good career. !Results of the research !There appear to be four main reasons why people remain working in hospitality:

1 A positive perception of career opportunities within the industry

2 Strong social connectivity

3 A professional identity

4 The occupational complexity of hospitality jobs !The findings of this research appear to challenge the prevailing view that hospitality is a high turnover industry in New Zealand.

Although participants in the study moved frequently between different properties, they frequently remained within the industry or returned to it after taking time out. The lack of concrete turnover data across the hospitality sector and individual obfuscation about why employees are leaving hides the real reasons why people move on from their jobs. Hospitality workers who leave their employers are reluctant to convey the genuine reasons for their departure, such as joining a competing business. Undoubtedly, many people move in and out of hospitality jobs at various life stages, but this is not a unique feature of the hospitality sector. !The most important finding of this research is that social dimensions of difference, such as age, gender, ethnicity and occupational position profoundly influence the way that workers’ abilities are perceived, and accordingly affect the length of their careers. This has major implications for human resource management practices in the New Zealand hospitality industry. !The findings of the study highlight three important areas where employers could usefully focus their attention to increase career longevity for undecided individuals entering hospitality employment for the first time: !1) undesirable working practices where they exist,

2) diversity management, and

3) career development. !In this way, we can positively change some of the industry’s longstanding labour shortages.

PHO

TO: TH

E TASTING

SHED, AU

CKLAN

D

�56PHOTO BY KIERAN SCOTT: THE ENGINE ROOM, AUCKLAND

OUTLET ANALYSIS

�57

OUTLET GROWTH O

UTLE

T G

ROW

TH


PHOTO

BY KIERAN SCOTT: THE ENG

INE ROO

M, AUCKLAND

While many regions recorded minimal movement in the number of outlets, the Auckland region showed the largest outlet growth. The vast majority of new businesses were located in the Auckland region, which grew by 156 businesses, in total, from 2012 - 2013.

As the graph (right) shows, restaurants and cafes dominate the industry’s market share, with just over half of the sales for the hospitality industry occurring at these types of businesses. However, despite being the dominant player, this sector’s market share did record a slight decrease in the 5 year period 2009 - 2013 (of 2.5 per cent), helped by a gain of 1.6 per cent in 2014. The clubs sector also showed a slight decline in market share over the five year period (2009 - 2013), but like cafes and restaurants, regained some of its market share (by 0.3 per cent) in 2014.



2014

Cafes and Restaurants Takeaway food servicesCatering services Pubs, Taverns and barsClubs

PERCENTAGE OF REVENUE BY TYPE OF OUTLET

2013

3% 11%5%

32%49%

SIZE OF INDUSTRY SECTOR BY TYPE OF OUTLET

Total outlet growth across New Zealand was just 1.1 per cent from 2012 - 2013 - an overall increase of 167 businesses.

The number of restaurant and cafe outlets also represents just under half of the industry, as the graph shown left illustrates. This sector has increased its size as a percentage of the industry by 1% from 2009 - 2013. While the changes are not alarming, it does mean there are more restaurant and cafe businesses fighting for a diminished portion of the consumer dollar. In contrast, the pubs, taverns and bars, catering services and takeaway services sectors have all reduced the number of outlets over the five years 2009 - 2013 and have increased their share of the consumer dollar.

51%

8.5%

15%4%

21.5%

!


Total No. Hospitality Outlets: National

0

3000

6000

9000

12000

15000

18000

‘09 ‘10 ‘11 ‘12 ‘13 ‘14 '15

15366149911474014573145341431914434

Annual Outlet Growth: National

Perc

enta

ge c

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-‘12 ‘12-’13 ‘13-’14 '14-'15

2.51.71.10.31.5

-0.8

Auckland

01000200030004000500060007000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

5854568255515395525150215042

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

32.42.92.74.6

-0.4

OU

TLET

GRO

WTH

Waikato

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1322130412881299127412381280

Perc

enta

ge C

hang

e

-6

-2

2

6

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.41.20.822.9

-3.3

Annual Outlet Growth: Regional

Bay of Plenty

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

845825821820796788795

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.40.50.1

31

-0.9

Manawatu/Wanganui

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

707690695685684686704

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.5

-0.7

1.50.1

-0.3-2.6

Source: Statistics New Zealand


national comparison

OUTLET GROWTH: BY REGION










!

�59

Wellington

Rest of the North Island

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1721169416681640162316441635

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1368134913251345134013401348

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.61.61.71

-1.3

0.6

Perc

enta

ge C

hang

e-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.41.8

-1.5

0.40

-0.6

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1798173916721683186719151901

Canterbury

Perc

enta

ge C

hang

e

-15

-10

-5

0

5

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

3.44

-0.7

-9.9

-2.5

0.7

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

876855861842842830851

Otago

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.5

-0.7

2.30

1.4

-2.5

0

500

1000

1500

2000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

875853859864857857878

Rest of the South Island

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.6

-0.7-0.6

0.80

-2.4


Annual Outlet Growth

OU

TLET

GRO

WTH


OUTLET GROWTH: BY REGION











national comparison

!

�60

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

845443848667847974864683781609

866220

580811824307811840821500835233

746854837537

580811580811

837537746854

835233 821500 811840 824307

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

722826724276673397678230696675

751463813203

721018692846652373655130665697726580

813203813203726580

665697 655130 652373 692846 721018

$0

$150,000

$300,000

$450,000

$600,000

$750,000

$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

346248338691330697319550298517289757272971337592323994320373308667285243280162272971272971 280162 285243 308667 320373 323994 337592

$0$150,000$300,000$450,000$600,000$750,000$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

712189704184717427647469

587903527845540156 694384673626695029

625417561762

510367540156540156 510367561762

625417695029 673626 694384

$0$150,000$300,000$450,000$600,000$750,000$900,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

535330525306487309491399464639477359473072521947502511472095474663443979461552473072473072 461552 443979 474663 472095 502511 521947

SALES PER OUTLET O

UTL

ET &

SAL

ES G

ROW

TH


National per outlet average sales

PUBS, TAVERNS & BARS CLUBS (HOSPITALITY)

RESTAURANTS & CAFES TAKEAWAYS FOOD SERVICE

CATERING SERVICES

nominal

real

After achieving a modest 2.5 per cent increase in national sales over the 2012 - 2013 period, the hospitality industry recorded a far more positive 6.3 per cent growth in sales in 2014. A breakdown of the industry indicates almost all sectors recorded sales growth in 2014: !• The restaurant and cafe sector, which accounts for

over 50% of the industry’s sales, recorded a 9.8 per cent increase, after posting just 0.8 per cent growth the year previous.

• Takeaways reported a 3.1 per cent increase, now surpassing $1.6 billion in annual sales.

• Pubs, taverns and bars increased by 2.6 per cent, a decline on the 7.9 per cent the sector achieved in 2013 when it was the best performing group.

• The only sector to report a decrease was catering services - indicating a (-)1.9 per cent drop in annual revenue.

• The clubs sector also reported record growth in 2014 of 14.7 per cent, after several years of flatline sales.

Nationally, sales revenue per outlet is projected to reach $515,218 in 2015, showing a small increase - of 1.5 per cent - over 2014. !The dominant sector, restaurant & cafes, is expected to record a 1.9 per cent increase in revenue share per outlet from 2014-2015. With over 7,500 businesses in this sector the revenue per outlet, at $535,330 (for 2015), is far lower than pubs, taverns and bars, which is projected to achieve $712,189 in 2015. A 7.9 per cent increase in sales and a decrease in the number of outlets enabled this sector to record a 10.8 per cent increase in sales per outlet in 2014. !Catering services is expected to record a small decrease in sales revenue per outlet from 2014 - 2015, but is still the highest ranking sector, achieving $845,443 in 2015. With annual sales of $649 million (projected for 2015), the sales revenue for this sector is spread amongst a diminishing number of businesses.








$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2009 2010 2011 2012 2013 2014 2015

Real Nominal

515218507404485339478838449993451608435105 502338485385470187462529429984436654435105435105 436654 429984

462529 470187 485385 502338

!

�61

Mill

ions

$

$0

$2,000

$4,000

$6,000

$8,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

7918.47606.57153.96978.1

6540.26465.96280.3 7720.47276.46930.66629.5

6144.46149.16183.86183.8 6149.1 6144.46629.5 6930.6 7276.4

7720.4

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,455 $1,480 $1,485 $1,574 $1,600

Perc

enta

ge C

hang

e

-2-102345689

10

‘09-’10 ‘10-’11 ‘11-’12 '12-'13 '13-'14 '14-'15

2.51.7

1.10.3

1.5

-0.8

4.1

6.3

2.5

6.7

1.1

3.0

Sales Outlets

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

515218507404485339478838449993451608435105 502338485385470187462529429984451561435105435105 451561 429984

462529 470187 485385 502338

The following pages consider some of the key indicators impacting on the overall growth of the industry - total sales, per capita spending, sales growth vs outlet growth and revenue share per outlet. Overall, the hospitality industry has weathered some difficult trading conditions over the past few years. !Nationally, there are sound levels of growth in both total hospitality sales and per capita spending. Industry sales

are now projected to reach close to $8 billion per annum. The 6.3 per cent increase in sales in 2014 is a pleasing return to the strong annual sales growth that the industry experienced in the first half of this decade. This rise is matched by an increasing per capita expenditure. Between 2009 and 2013 an average increase of 2% annually per head of population was realised, with expenditure growing 10% over that period (from $1,455 in 2009 to $1,600 in 2013).

SALES VS OUTLET GROWTH REVENUE SHARE PER OUTLET

TOTAL SALES !Total sales indicates the collective value of sales nationally (and on the following pages regionally). Despite difficult trading conditions over the past five years, national sales increases have remained stable and it looks like the 6.3 per cent sales growth from 2013 - 2014 marks the beginning of a stronger growth trend. Strength in the Auckland and Canterbury market has driven this growth nationally.

SPENDING PER CAPITA !This information indicates annual movements in consumer spending nationally. Since 2009, the per capita spend has recorded steady growth, with a 1.6% increase in spend between 2012 and 2013. Regional graphs on the following pages have a light green line (watermark) indicating the national average, for easy comparison.

The graph above indicates the share of total sales for each hospitality business, on average, across the different sectors of the industry. Between 2009 and 2014 there was a nominal increase in per outlet revenue share of 17 per cent, translating to a real increase of 11 per cent after inflation. This change was underpinned by reduced staff numbers in many sectors and slower outlet growth.

As national outlet growth over the past five years has been at a much slower rate than sales growth, each established outlet (on average) has seen an increase in total sales. In particular, the sales growth in 2014 of 6.3 per cent was matched with a minimal outlet growth of 1.7 per cent nationally. This resulted in a 4.5% increase in revenue share per outlet in 2014, as indicated in the graph shown right.

SALES GROWTH & PER CAPITA SPENDING


OU

TLET

& S

ALES

GRO

WTH

Source: Statistics New Zealand & Restaurant Association of New

Zealand

(projected)


�62

$0$100,000$200,000$300,000$400,000$500,000$600,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

515357508149486759479259440088435371412138

Mill

ions

$

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

3016.92887.327022585.6

2310.921862078

2941.52762

2617.62497.5

2208.12113.620782078 2113.6 2208.1

2497.52617.6

27622941.5

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,444 $1,495 $1,555$1,715 $1,767

Perc

enta

ge C

hang

e

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

32.42.92.74.6

-0.4

4.56.9

4.5

11.9

5.75.2

Sales Outlets

AUCKLAND

$0

$100,000

$200,000

$300,000

$400,000

$500,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

413313407055396196365589351020

398304360391

Perc

enta

ge C

hang

e

-15-10

-505

1015

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.41.2

-0.8

22.9

-3.3

2.947.56.2

-9.3

6.9

Sales Outlets

Mill

ions

$

$0$100$200$300$400$500$600$700

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

546.4530.8510.3474.9447.2493.1461.3532.7507.8494.4458.7427.3

476.8461.3461.3 476.8427.3 458.7 494.4 507.8 532.7

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,141 $1,205$1,083 $1,141 $1,219

WAIKATO

ABOVE: The Auckland region is certainly dominant – 38 per cent of the country's businesses are located there, it employs over a third of the industry’s employees and has over 38 per cent market share. !Between 2014 - 2015 the Auckland region is expect to experience the largest increase in number of businesses around the country, growing by 172 in total. It is unsurprising therefore that Auckland operators rate competition from other businesses as one of their biggest challenges. Despite this challenge, the region has grown industry sales by 6.9 per cent over the past year. !The spend per capita has also reached $1767. This spend is one of the highest in the country (exceeded only by Otago and the "rest of South Island" region) and is 10 per cent higher than the national average.

BELOW: The Waikato region had a sales increase of 7.5 per cent from 2012 - 2013, surpassing $500 million in annual sales for the first time in 2013. Sales growth in 2014, however, was a more subdued, although still steady, 4 per cent. !This sales performance, combined with a small reduction in the number of businesses in the region has enabled sales revenue per outlet to rise, expecting to reach to $413,313 in 2015. This revenue share per outlet exceeds the region's previous peak in 2010 of $398,304. !The hospitality spend per capita also increased by almost 7 per cent in 2013 to reach $1219, again returning to levels previously reached in 2010.

Total Sales

Total Sales

Hospitality Spending per Capita


Sales Growth Vs Outlet Growth

Sales Growth Vs Outlet Growth Revenue Share per Outlet

Revenue Share per Outlet

OU

TLET

& S

ALES

GRO

WTH

nominal

real


Auckland’s population exceeds $1.5 million


Waikato’s annual sales exceed $500 million for the first time

(projected)


(projected)


�63

$0

$100,000

$200,000

$300,000

$400,000

$500,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

431006425818432765420000374874385025

321761

Mill

ions

$

$0

$100

$200

$300

$400

$500

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

364.2351.3355.3344.4298.4303.4

255.8 355.1336.1344.2332.7285.1293.4

255.8255.8293.4 285.1

332.7 344.2 336.1 355.1

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$939$1,103 $1,077

$1,242 $1,278Pe

rcen

tage

Cha

nge

-10-505

101520

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.40.50.1

31

-0.9

3.7

-1.1

3.2

15.4

-1.6

18.6

Sales Outlets

BAY OF PLENTY

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

582461579275515683542774562135550000

511790

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.5

-0.7

1.50.1

-0.3-2.6

3

11.5

-3.6-3.3

1.94.7

Sales Outlets

Mill

ions

$

$0

$100

$200

$300

$400

$500

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

411.8399.7358.4371.8384.5377.3360.3

401.5382.4347.2359.1367.4364.8360.3360.3 364.8 367.4 359.1 347.2

382.4 401.5

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,565 $1,630 $1,654 $1,599 $1,540

MANAWATU/WANGANUI

ABOVE: The number of hospitality businesses in the Bay of Plenty region 2009-2013 remained relatively static, increasing by just 26 businesses in total over that time. It is projected to grow by another 20 outlets by 2015. !This relatively subdued outlet growth, combined with some years of very strong sales growth (in particular in 2010 and 2012), saw the region grow revenue share per outlet by over 34 per cent from 2009-2013. In 2015 it is expected to reach $431,006, an increase of 1.2 per cent over 2014. !While the average hospitality spend per capita is relatively low (at $1278, it is $322 less than the national average), this also rose significantly from 2009-2013. In 2009 the per capita spend was just $939, a rise of 36 per cent over following five years.

BELOW: The Manawatu / Wanganui region struggled over recent years, with a decline in sales of 3.3 per cent from 2011 - 2012 and a further decrease of 3.6 per cent from 2012 - 2013. However, the region had a large sales performance increase in 2014, recording 11.5 per cent growth. The number of outlets has also been slowly reducing over the past five years, although the region is expected to report a small increase in outlets in 2015. !The spend per capita is relatively high in the region. At $1540 per person it is only slightly below the national average of $1600. The revenue share per outlet for the Manawatu / Wanganui region was affected by the sales declines over the past few years, but is expected to grow significantly in 2014 and 2015.


Total Sales

Total Sales






OU

TLET

& S

ALES

GRO

WTH


(projected)


(projected)


�64

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

547531527981510312534390517991523358577982

Perc

enta

ge C

hang

e

-15

-10

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.61.61.71

-1.3

0.6

5.45.1

-2.9

4.2

-2.3

-9

Sales Outlets

Mill

ions

$

$0$200$400$600$800

$1,000$1,200

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

942.3894.4851.2876.4840.7860.4945

918.7855.6824.6846.6803.3831.9945945

831.9 803.3 846.6 824.6 855.6 918.7

$0

$500

$1,000

$1,500

$2,000

$2,500

‘09 ‘10 ‘11 ‘12 ‘13

$1,975$1,780 $1,724 $1,788 $1,728

WELLINGTON

$0

$100,000

$200,000

$300,000

$400,000

$500,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

376243368421394491416357370970

403731369955

Perc

enta

ge C

hang

e

-15-10

-505

1015

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

1.41.8

-1.5

0.40

-0.6

3.6

-4.9-6.7

12.7

-8.1

8.5

Sales Outlets

Mill

ions

$

$0$100$200$300$400$500$600$700

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

514.7497522.7560497.1

541498.7

501.8475.4506.4540.9475

523.1498.7498.7 523.1475

540.9 506.4 475.4 501.8

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,076 $1,156 $1,058$1,191 $1,110

REST OF THE NORTH ISLAND

ABOVE: The number of Wellington hospitality businesses is projected to increase slightly in 2015 to 1721 outlets (a projected 1.6 per cent increase from 2014 - 2015). !Sales for the region are also expected to grow by 5.4 per cent and this translates to a 3.7 per cent increase in revenue share per outlet. At $547,531 in 2015 (projected), this is relatively high (with only two other regions recording higher per outlet revenue share). It is also more than 6 per cent above the projected national figure in 2015. !Wellington also has a high average spend per capita. Although this declined slightly in 2013, the 2013 per person spend of $1728 is 8 per cent above the national average. !

BELOW: This combination of North Island regions has not achieved the same level of growth of some of the country's other regions over recent years. The number of businesses reduced in total by 2 per cent over the years 2009 - 2013 and is expected to grow slightly in 2014 and 2015. !In 2014 the region was one of only two regions to record a decline in industry sales, reducing annual sales by 4.9 per cent. This follows a 6.7 per cent decline in 2013. !The combination of declining sales in 2014, as well as static outlet growth, results in revenue share per outlet expecting to reach $368,421 in 2014. This figure is the lowest of any region - and well below the 2014 national average of $507,404.


Total Sales

Total Sales








OU

TLET

& S

ALES

GRO

WTH

(projected)


(projected)


$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

598943588729552452521272491377473473467017

Perc

enta

ge C

hang

e

-15-12

-9-6-30369

1215

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

3.44

-0.7

-9.9

-2

0.7

5.2

10.8

5.3

-4.4

1.22.1

Sales Outlets

Mill

ions

$

$0

$300

$600

$900

$1,200

$1,500

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

1076.91023.8923.7877.3917.4906.7887.8

1049.9979.4894.9847.4876.6876.7887.8887.8 876.7 876.6 847.4 894.9

979.4 1049.9

$0

$500

$1,000

$1,500

$2,000

‘09 ‘10 ‘11 ‘12 ‘13

$1,588 $1,603 $1,636 $1,570 $1,632

CANTERBURY

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

542352546199473519482067502257

451687427380

Perc

enta

ge C

hang

e

-10

-4

2

8

14

20

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.5

-0.7

2.301.4

-2.5

1.7

14.5

0.4

-4

12.8

3.1

Sales Outlets

Mill

ions

$

$0

$120

$240

$360

$480

$600

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

475.1467407.7405.9422.9

374.9363.7 463.2446.7395392.1404.1

362.5363.7363.7 362.5404.1 392.1 395

446.7 463.2

$0

$500

$1,000

$1,500

$2,000

$2,500

‘09 ‘10 ‘11 ‘12 ‘13

$1,771 $1,808$2,015 $1,922 $1,911

OTAGO

ABOVE: In 2015 the projected number of businesses in the Canterbury region is still 117 less than the region's peak of 1915 outlets in 2010, prior to the Canterbury earthquakes. The number of outlets was reduced by 9.9 per cent from 2011 - 2012 and dropped again minimally from 2012 - 2013. The region's sales and hospitality spend per capita have been increasing, however. A 10.8 per cent increase in sales in 2014 finds the region reaching over $1 billion in sales. The average spend per person, at $1632, is just above the national average. As a result of the business closures, combined with sales growth, the revenue share per outlet grew another 6.6 per cent in 2014 to reach $588,729. Only the 'rest of south island" combined region has a higher per outlet revenue share.

BELOW: After four years of reduction in the number of hospitality businesses in the Otago region, the number of outlets grew in 2013 by 2.3 per cent and following a small projected decrease in 2014, is expected to rise again in 2015. The region has also recorded the highest sales growth in 2014, a 14.5 per cent increase over the year previous. Sales revenue per outlet recorded a decrease of 1.8 per cent in 2013, but because of the very strong sales performance, this is expected to rise significantly in 2014. While hospitality spending per capita in the region also dropped from 2012 - 2013, to $1911, it remains one of the highest in the country (19% higher than the national rate of $1,600).


Total Sales

Total Sales







OU

TLET

& S

ALES

GRO

WTH


(projected)


(projected)


�66

$0

$200,000

$400,000

$600,000

$800,000

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Real Nominal

651543650879608382

557639491365493699489408

Perc

enta

ge C

hang

e

-10

-5

0

5

10

15

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 '13-'14 '14-'15

2.6

-0.7-0.6

0.80

-2.4

2.7

6.28.5

14.4

-0.5-1.5

Sales Outlets

Mill

ions

$

$0$100$200$300$400$500$600$700

‘09 ‘10 ‘11 ‘12 ‘13 '14 '15

570.1555.2522.6481.8421.1423.1429.7 555.8531.1506.3

465.4402.4409.1429.7429.7 409.1 402.4

465.4506.3 531.1 555.8

$0

$500

$1,000

$1,500

$2,000

$2,500

‘09 ‘10 ‘11 ‘12 ‘13

$1,634 $1,597 $1,573$1,794

$1,944

REST OF SOUTH ISLAND

ABOVE: Although this 'region' is actually a combination of South Island regions, it was the star performer over 2011-2013 when sales grew by $100 million - from $421.1 million in 2011, to $522.6 million in 2013 - after three years of declining sales. Sales performance improved by another 6.2 per cent in 2014, with annual sales projected to reach $570 million in 2015.

Sales revenue per outlet is also projected to increase to $651,543 in 2015. This is the highest revenue share for any region in the country and 26 per cent higher than the national average. !The region's spend per capita is also the highest in the country, increasing over 8 per cent in 2013 to $1944.


Total Sales Hospitality Spending per Capita


OU

TLET

& S

ALES

GRO

WTH


PHOTO

BY KIERAN SCOTT: THE ENG

INE ROO

M, AUCKLAND


(projected)

�67

REGIONAL BREAKOUTS

PHOTO: ESPLANADE, DUNEDIN

�68

AUCKLAND REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


Mill

ions

$

$0

$1,000

$2,000

$3,000

$4,000

‘11 ‘12 ‘13 '14 '15

Real Nominal

3016.92887.327022585.62310.9 2941.527622617.62497.52208.12208.1

2497.5 2617.6 2762 2941.5

AUCKLAND SALES

0

1000

2000

3000

4000

5000

6000

‘11 ‘12 ‘13 '14 '15

58545682555153955251

AUCKLAND NO. OF EMPLOYEES

0

10000

20000

30000

40000

50000

‘11 ‘12 ‘13 '14 '15

4009038490372403673034340

AUCKLAND NO. OF OUTLETS

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘09 ‘10 ‘11 ‘12 ‘13

$1,444$1,495

$1,555

$1,715$1,767

Auckland’s population exceeds $1.5 million

SPEND PER CAPITA

$0

$20,000

$40,000

$60,000

$80,000

‘11 ‘12 ‘13 '14 '15

7532875014725567039567295


Zealand

PRODUCTIVITY: sales per employee

$0

$150,000

$300,000

$450,000

$600,000

‘11 ‘12 ‘13 '14 '15

515357508149486759479259440088

PROFITABILITY: revenue share per outlet

Labour costs rank as the number one challenge facing Auckland hospitality operators. In 2014, 49 per cent expect this to be their top challenge. Competition from other businesses is also intense in the major city centres which have seen an influx of new businesses opening over the past two years.

Auckland operators are challenged to find skilled workers, 92 per cent said that they find it ‘difficult’, or ‘extremely difficult’ to recruit for management positions.

92%The Auckland region is certainly dominant – 38 per cent of the country's businesses are located there, it employs over a third of the industry’s employees and has 38 per cent market share. !The region also has a highly productive workforce. Average sales per employee are projected to reach $75,328 in 2015, an expected steady increase in employee productivity over the five year period 2011 - 2015 of 12 per cent. While the number of employees for the region increased in 2013 by 1.4 per cent (over 2012) and is projected to increase 3.4 per cent in 2014 and 4.2 in 2015, this is offset by the number of new businesses opening in the region, meaning the average number of employees per outlet remains below national levels. In terms of employee productivity, sales per employee for Auckland workers is 5.6 per cent higher than the national average.

Between 2014 - 2015 the Auckland region is expected to experience the largest increase in number of businesses around the country, growing by 172 in total. It is unsurprising therefore that Auckland operators rate competition from other businesses as one of their biggest challenges. Despite this challenge, the region has grown industry sales by 6.9 per cent over the past year. !The spend per capita has also reached $1767. This spend is one of the highest in the country (exceeded only by Otago and the "rest of South Island" region) and is 10 per cent higher than the national average. !Labour costs rate the number one challenge for Auckland operators. Business owners are relatively optimistic, however ~ 58 per cent say business conditions for the industry are improving in 2014.

1 58%Business confidence:

58 per cent of Auckland hospitality owners say

business conditions for the industry in 2014 are

improving.



�69

WAIKATO REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


WAIKATO SALES

WAIKATO NO. OF EMPLOYEES

WAIKATO NO. OF OUTLETS

SPEND PER CAPITA


Zealand



Lack of skilled employees ranks as the number one challenge facing Waikato hospitality operators.In 2014, 88 per cent expect this to be their top challenge.

Waikato operators are challenged to find

skilled workers, 87 per cent say that they find it ‘difficult’, or ‘extremely

difficult’ to recruit for management

positions.

The Waikato region had a sales increase of 7.5 per cent from 2012 - 2013, surpassing $500 million in annual sales for the first time in 2013. Sales growth in 2014, however, was a more subdued, although still steady, 4 per cent. !This sales performance, combined with a small reduction in the number of businesses in the region has enabled sales revenue per outlet to rise, expecting to reach to $413,313 in 2015. This revenue share per outlet exceeds the region's previous peak in 2010 of $398,304. !The hospitality spend per capita also increased by almost 7 per cent in 2013 to reach $1219, again returning to levels previously reached in 2010.

Sales per employee for the Waikato region are projected to increase by 9.4 per cent in 2015 (over 2013). This increase in productivity is assisted by strong sales growth (7.5 per cent) from 2012 - 2013, followed by a 4 per cent sales increase in 2014, as well as a slowly declining number of workers for the region. The number of outlets in the Waikato region also declined slightly in 2013 but are expected to rise slightly in 2014 and 2015. !Although Waikato is still comparatively one of the least productive regions based on employee productivity, another year of solid sales growth will assist it to move closer to the national average of $71,337 (projected for 2015).

0

2000

4000

6000

8000

10000

‘11 ‘12 ‘13 '14 '15

83858555857086608700

Mill

ions

$

$0

$120

$240

$360

$480

$600

‘11 ‘12 ‘13 '14 '15

546.4530.8510.3474.9447.2 532.7507.8494.4458.7427.3427.3 458.7

494.4 507.8 532.7

Waikato’s annual sales exceed $500 million for the first time

0

500

1000

1500

2000

‘11 ‘12 ‘13 '14 '15

13221304128812991274

$0

$100,000

$200,000

$300,000

$400,000

$500,000

‘11 ‘12 ‘13 '14 '15

413313407055396196365589351020

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘09 ‘10 ‘11 ‘12 ‘13

$1,141$1,205

$1,083$1,141

$1,219

$0

$20,000

$40,000

$60,000

$80,000

‘11 ‘12 ‘13 '14 '15

Real Nominal

6516462046595455483851402

The Waikato region was one of the top performing regions in 2013, with a 7.5 per cent increase in sales performance.

1 87%



�70

WELLINGTON REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


WELLINGTON SALES

WELLINGTON NO. OF EMPLOYEES

WELLINGTON NO. OF OUTLETS

SPEND PER CAPITA PRODUCTIVITY: sales per employee


Labour costs rank as the number one challenge facing Wellington hospitality operators. In 2014, 60 per cent expect this to be their top challenge.

Sales performance: In 2014 60 per cent of Wellington operators say that their sales are better over the year previous.

60%1While a significant 12 per cent of the hospitality industry's sales are made in the Wellington region and it employs 13 per cent of the industry’s workers, this district has struggled over the past five years. !Regional sales declined by 2.9 per cent from 2012-2013 and this corresponded with a 3.7 reduction in sales per employee, to $63,145, in 2013. The 5.1 per cent sales growth in 2014 is projected to assist productivity levels to rise, however, by 2.3 per cent in 2014 and 1.2 per cent in 2015. !While the number of workers is increasing only slightly year on year, the average number of employees per outlet is the highest in the country - projected to rise to 8.38 in 2015 - significantly higher than the national average of 7.22

employees per outlet. Even with relatively modest outlet growth, this is further compounding productivity woes. The number of Wellington hospitality businesses is projected to increase slightly in 2015 to 1721 outlets (a projected 1.6 per cent increase from 2014 - 2015). !Sales for the region are also expected to grow, translating to a 3.7 per cent increase in revenue share per outlet. At $547,531 in 2015 (projected), this is relatively high (with only two other regions recording higher per outlet revenue share). It is also more than 6 per cent above the projected national figure in 2015. !Wellington also has a high average spend per capita. Although this declined slightly in 2013, the 2013 per person spend of $1728 is 8 per cent above the national average.

Mill

ions

$

$0

$200

$400

$600

$800

$1,000

‘11 ‘12 ‘13 '14 '15

Real Nominal

942.3894.4851.2876.4840.7918.7

855.6824.6846.6803.3803.3 846.6 824.6 855.6918.7

0

4000

8000

12000

16000

20000

‘11 ‘12 ‘13 '14 '15

1442013850134801337012990

0

500

1000

1500

2000

‘11 ‘12 ‘13 '14 '15

17211694166816401623

$800$1,000$1,200$1,400$1,600$1,800$2,000$2,200

‘09 ‘10 ‘11 ‘12 ‘13

$1,975

$1,780 $1,724 $1,788 $1,728

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘11 ‘12 ‘13 '14 '15

547531527981510312534390517991

$0

$20,000

$40,000

$60,000

$80,000

‘11 ‘12 ‘13 '14 '15

6534764578631456555064719



�71

BAY OF PLENTY REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


BAY OF PLENTY SALES

BAY OF PLENTY NO. OF EMPLOYEES

BAY OF PLENTY NO. OF OUTLETS

SPEND PER CAPITA


Zealand



Food costs rank as the number one challenge facing Bay of Plenty hospitality operators. In 2014, 67 per cent expect this to be their top challenge.

Bay of Plenty operators are challenged to find

skilled workers, 87 per cent say that they find it ‘difficult’, or ‘extremely

difficult’ to recruit for management positions.

Over the five year period 2009 - 2013 the Bay of Plenty region raised productivity levels per employee by 35.6 per cent. !Levels are expected to decline slightly in 2014 and 2015, however, from their peak in 2013 of $60,839. While the projected sales per employee in 2015 is $59,852, 19 per cent lower than the national average of $71,337, the region has been looking strong in the first half of this decade. !The number of hospitality businesses in the Bay of Plenty region from 2009-2013 remained relatively static, increasing by just 26 businesses in total over that time. It is projected to grow by another 20 outlets by 2015. !

This relatively subdued outlet growth, combined with some years of very strong sales growth (in particular in 2010 and 2012), saw the region grow revenue share per outlet by over 34 per cent from 2009-2013. In 2015 it is expected to reach $431,006, an increase of 1.2 per cent over 2014. !While the average hospitality spend per capita is relatively low (at $1278, it is $322 less than the national average), this also rose significantly from 2009-2013. In 2009 the per capita spend was just $939, a rise of 36 per cent over the following five years. !Bay of Plenty operators comment that it is becoming more challenging to control costs - almost half say that it was more challenging over the past year to control costs.

Mill

ions

$

$0

$100

$200

$300

$400

$500

‘11 ‘12 ‘13 '14 '15

Real Nominal

364.2351.3355.3344.4298.4

355.1336.1344.2332.7285.1285.1

332.7 344.2 336.1 355.1

0

2000

4000

6000

8000

‘11 ‘12 ‘13 '14 '15

60855962584059705810

0

250

500

750

1000

‘11 ‘12 ‘13 '14 '15

845825821820796

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘09 ‘10 ‘11 ‘12 ‘13

$939

$1,103 $1,077

$1,242 $1,278

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000

‘11 ‘12 ‘13 '14 '15

5985258923608395767251377

$0

$100,000

$200,000

$300,000

$400,000

$500,000

‘11 ‘12 ‘13 '14 '15

431006425818432765420000374874

Business confidence: 42 per cent of Bay of Plenty hospitality owners say business conditions for the industry in 2014 are improving, matched by 42 per cent who said that conditions will remain the same.

1 87%



�72

MANAWATU/WANGANUI REGIONAL BREAKOUT !

REG

IONA

L BR

EAKO

UTS


MANAWATU/WANGANUI SALES

MANAWATU/WANGANUI NO. OF EMPLOYEES

MANAWATU/WANGANUI NO. OF OUTLETS

SPEND PER CAPITA


Zealand



Labour costs rank as the number one challenge facing Manawatu / Wanganui hospitality operators.In 2014, 83 per cent expect this to be their top challenge.

Sales performance and profitability: Although 83 per cent of Manawatu / Wanganui operators say their business’ sales performance was up in 2013 over the year previous, only 17 per cent say profitability was better. 1

In terms of per employee productivity the Manawatu / Wanganui region has one of the most productive workforces in the country. !Projected to increase to $84,663 in 2015, this sales per employee figure is 18.7 per cent higher than the national average. !The region has been impacted by weakening sales in recent years (a decline of 3.3 per cent over 2011-2012 and another 3.6 per cent decline from 2012-2013). However, sales growth in 2014 was 11.5 per cent, one of the strongest performances of any region in the country. This in turn assisted sales per employee levels to grow by 9.2 per cent. !

The number of outlets has also been slowly reducing over the past five years, although the region is expected to report a small increase in outlets in 2015. !The spend per capita is relatively high in the region. At $1540 per person it is only slightly below the national average of $1600. !The revenue share per outlet for the Manawatu / Wanganui region was affected by the sales declines over the past few years, but is expected to grow significantly in 2014, as a result of the region’s strong sales growth, and again in 2015. !!!

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

‘11 ‘12 ‘13 '14 '15

8466385442782537961581118

Mill

ions

$

$0

$120

$240

$360

$480

$600

‘11 ‘12 ‘13 '14 '15

Real Nominal

411.8399.7358.4371.8384.5

401.5382.4347.2359.1367.4367.4 359.1 347.2

382.4 401.5

0100020003000400050006000

‘11 ‘12 ‘13 '14 '15

48644678458046704740

0

250

500

750

1000

‘11 ‘12 ‘13 '14 '15

707690695685684

$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000

‘11 ‘12 ‘13 '14 '15

582461579275515683542774562135

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘09 ‘10 ‘11 ‘12 ‘13

$1,565$1,630 $1,654

$1,599$1,540



�73

CANTERBURY REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


CANTERBURY SALES

CANTERBURY NO. OF EMPLOYEES

CANTERBURY NO. OF OUTLETS

SPEND PER CAPITA


Zealand



The Canterbury region recorded 10.8 per cent sales growth from 2013-2014, representing 13.5 per cent of the industry's total sales. The number of workers is also slowly on the increase - however, the number of businesses is still well below the region’s peak in 2010 of 1915 hospitality outlets. !Despite the devastating upheavals experienced by the Canterbury region from the end of 2010 onwards, the region has recorded a steady increase in employee productivity, projected to increase to $76,349 in 2015. This is despite the relatively high average number of employee's per outlet, which at 7.84 is one of the country's highest (and 8.6 per cent above the national average). !

In 2015 the projected number of businesses in the Canterbury region is still 117 less than the region's peak of 1915 outlets in 2010, prior to the Canterbury earthquakes. The number of outlets was reduced by 9.9 per cent from 2011 - 2012 and dropped again minimally from 2012 - 2013. !The region's sales, and hospitality spend per capita have been increasing, however. The 10.8 per cent increase in sales in 2014 finds the region reaching over $1 billion in annual sales. The average spend per person, at $1632, is just above the national average. As a result of the business closures, combined with sales growth, the revenue share per outlet grew another 6.6 per cent in 2014 to reach $588,729. Only the 'rest of south island" combined region has a higher per outlet revenue share.

Mill

ions

$

$0

$300

$600

$900

$1,200

$1,500

‘11 ‘12 ‘13 '14 '15

Real Nominal

1076.91023.8923.7877.3917.4

1049.9979.4894.9847.4876.6876.6 847.4 894.9

979.4 1049.9

$200,000

$300,000

$400,000

$500,000

$600,000

‘11 ‘12 ‘13 '14 '15

598943588729552452

521272491377

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘09 ‘10 ‘11 ‘12 ‘13

$1,588 $1,603 $1,636$1,570

$1,632

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

‘11 ‘12 ‘13 '14 '15

7634976833708366897068874

0

3000

6000

9000

12000

15000

‘11 ‘12 ‘13 '14 '15

1410513325130401272013320

0

500

1000

1500

2000

‘11 ‘12 ‘13 '14 '15

17981739167216831867

Labour costs ranks as the number one challenge facing Canterbury hospitality operators. In 2014, 82 per cent expect this to be their top challenge.

Canterbury operators are finding it more challenging to

control costs, with 77 per cent of the region’s operators

indicating that they found controlling costs more

difficult in 2013 over the year previous.

According to the Ministry of Business, Innovation and Employment, New Zealand’s employment growth is expected to be dominated by the Auckland and Canterbury regions, which together will account for 47 per cent of total employment growth through to March 2016.

1 77%



OTAGO REGIONAL BREAKOUT RE

GIO

NAL

BREA

KOUT

S


OTAGO SALES

OTAGO NO. OF EMPLOYEES

OTAGO NO. OF OUTLETS

SPEND PER CAPITA


Zealand



Over the coming year, 60 per cent of Otago operators indicate that they will keep remuneration rates to existing employees at the same level.

Otago / Southland operators are extremely challenged to find skilled workers, 100 per cent say that they find it ‘difficult’, or ‘extremely difficult’ to recruit for management positions.

100%

After four years of reduction in the number of hospitality businesses in the Otago region, the number of outlets grew in 2013 by 2.3 per cent and following a small projected decrease in 2014, is expected to rise again in 2015. !The region has also recorded the highest sales growth in 2014, a 14.5 per cent increase over the year previous. Sales revenue per outlet recorded a decrease of 1.8 per cent in 2013, but because of the very strong sales performance, this is expected to rise significantly in 2014. While hospitality spending per capita in the region also dropped from 2012 - 2013, to $1911, it remains one of the highest in the country (19% higher than the national rate of $1,600). !

The Otago region recorded sales growth of 12.8 per cent back in 2011 (over the year previous) at a time when almost every other region was either in decline, or reporting very small sales gains. This assisted the region to reach its peak level of sales per employee productivity that year of $68,541. !However, 2012 recorded a decline in annual sales of 4 per cent, followed by a subdued 0.4 per cent growth in 2013. 2014 has seen a more positive performance - record sales growth of 14.5 per cent (the largest regional growth in the country) will see projected employee sales levels increase 14 per cent from 2013 - 2014. !The average number of employees per outlet is projected to be 7.46 in 2015, higher than the national average of 7.22.

Mill

ions

$

$0

$100

$200

$300

$400

$500

$600

‘11 ‘12 ‘13 '14 '15

Real Nominal

475.1467407.7405.9422.9

463.2446.7395392.1404.1404.1 392.1 395

446.7 463.2

$800

$1,150

$1,500

$1,850

$2,200

‘09 ‘10 ‘11 ‘12 ‘13

$1,771 $1,808

$2,015$1,922 $1,911

$0$100,000$200,000$300,000$400,000$500,000$600,000

‘11 ‘12 ‘13 '14 '15

542352546199473519482067502257

$0

$20,000

$40,000

$60,000

$80,000

‘11 ‘12 ‘13 '14 '15

7265671626626276412368541

0

2000

4000

6000

8000

‘11 ‘12 ‘13 '14 '15

65396520651063306170

0

200

400

600

800

1000

‘11 ‘12 ‘13 '14 '15

876855861842842

60%



�74

Restaurant Association of New Zealand PO Box 82887, Symonds Street, Auckland p: 09 638 8403 e: [email protected] w: www.restaurantnz.co.nz | www.dinefind.co.nz

PHOTO BY KIERAN SCOTT: THE ENGINE ROOM, AUCKLAND �75

http://www.dinefind.co.nz

http://www.dinefind.co.nz

hospitality report 2014 · 2020. 7. 6. · total new zealand 100,000 100,400 101,870 104,030...

Documents