Hot summer heats up restaurant sector

Restaurant business picked up over the summer, according to latest hospitality spending figures.

Spending through Paymark, which processes about 75% of all electronic transactions in New Zealand, shows year-on-year increases for each of the summer months (November 2012-February 2013).

The best month was last December, when $302 million was spent on food and drink. This was a 5.3% increase on the same month the previous year.

Spending tailed off by 11% in January to $343 million and dropped again last month by a further 5%.

Restaurants association chief executive Marisa Bidois told NBR Food Industry Week the outlook is positive and anecdotal evidence suggests a turn in the industry.

“We’re not completely out in the clear yet. It’s been a good summer but we’re not dancing on the tables.”

Ms Bidois says restaurants still aren’t seeing the sales levels of two years ago.

Sunshine hours are always a boost and people seem to be relaxing a bit more overall with their money.

While the year ahead looks positive, restaurateurs are predicting an increase in dairy prices as a result of drought conditions, she says.

“As usual, our industry is always challenged by the rising costs of goods. There are tight margins but the industry would probably look to absorb it.”

Nourish group chief executive Richard Sigley says while his Auckland restaurants such as Euro and Jervois Steakhouse have seen good traffic, Queenstown, where he has just opened another Jervois Steakhouse, is fluctuating.

The low hotel occupancy rates mean each week of the summer has been different.

Auckland inner city restaurants are busy, he says, but suburban pubs have been quiet as people enjoy the outdoors or just stayed home.

The big concern in the hospitality market is the influx of new outlets. “It’s not growing the cash tree, it’s just diminishing the size of the pie.”

To counter this, Mr Sigley says promotions are used as an easy way to attract diners. 

“We’ve gone from being a value outlet to a volume outlet. We use GrabOne and it’s amazing how fast the deals are snapped up.”