hospitality report 2013 working -...

HOSPITALITYREPORT

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2013

PHOTO: RAGU, AUCKLAND

REPORTING ON NEW ZEALAND’S

HOSPITALITY INDUSTRYproduced by the

Restaurant Association of New Zealand & AUT University

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7The Industry At A GlanceA snapshot of key industry statistics for quick review. This top line facts and figures include industry sales growth, employment and outlet growth, industry sales revenue and regional ststistics.

11Marketplace ImpactsNew Zealand’s economy continues to face difficulties in 2013. In this section we consider global finances, Christchurch’s earthquake aftermath, tourism, the economy, migration, new legislation and employment.

19Challenges & ResponsesIn the current environment there are many challenges facing hospitality operators. This section identifies the top hospitality challenges and responses.

29Sales AnalysisThis section profiles national sales growth, patterns of per capita spending, outlet growth and revenue share.

34 Human Economic CapitalRemuneration increases are on hold until business conditions improve, as this section identifies. This section tracks wage and salary trends and productivity in the current economic climate.

53Consumer InsightsA snapshot of New Zealanders’ dining habits is presented: dining out frequency, attributes the consumer rates as important when choosing an establishment and how dining habits are changing.

Restaurant Association of New Zealand & AUT University - Industry Report 2013

60Outlet AnalysisThis section profiles national outlet growth, patterns of per capita spending per outlet and regional outlet analysis.

72Spotlight On Catering ServicesThis section focuses on the catering sector; one of the outstanding performers over the past three years. The section looks at sales, workforce and outlet growth for the sector with key industry viewpoint by caterer Sue Fleischl.

76Conclusion

ISBN 978-1-927184-12-7

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Welcome

Introductory Remarks

Notes on reading this report

THE INDUSTRY AT A GLANCE

MARKETPLACE IMPACTS

Economic Outlook, Gail Pacheco

International Trends

CHALLENGES & RESPONSES

2013 Top Challenges

Business Confidence

Environmental Awareness, Steve Logan

What Makes A Successful Chef, Michael Van de Elzen

Rebuilding Canterbury, Jimmy Summerfield

SALES ANALYSIS

Sales growth; Sales revenue per outlet and employee

HUMAN ECONOMIC CAPITAL

The Hospitality Professional, Lawrence Powell

Remuneration data: average hourly wage growth 2008-2012

Remuneration data: average salary growth 2008-2012

Hospitality employment growth: national and regional 2008-2012

Employee productivity: sales and regional insights

CONSUMER INSIGHTS

Quality Over Quantity, American Express

New ways of connecting with the consumer, GrabOne

OUTLET ANALYSIS

Sales per outlet; sales growth and per capita spend

Competition density

SPOTLIGHT ON CATERING SERVICES

Conclusion


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COLLABORATORS WELCOMEC

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AUT University is proud to support the AUT/Restaurant Association Hospitality Report for 2013. This is our third edition and with each publication this report continues to reflect the dynamic nature of New Zealand’s most exciting industry; hospitality.

AUT is keen to promote research that is user-friendly, easy to understand and applicable to its audience. In this edition you will find a multitude of facts, figures and advice that are designed to enhance your business and proactively promote the hospitality industry.

These past few years have been testing for competitive businesses like hospitality, and

this report not only reflects this but also adds a new dimension; economic forecasting from Professor Gail Pacheco. These forecasts will provide you with a future view, one designed to help your strategic business planning. Enjoy the 3rd edition of this report. I wish you well for the year ahead.

Head of SchoolAUT School of Hospitality & Tourism

Chief ExecutiveRestaurant Association of New Zealand

Linda O’NeillHead of School, School of Hospitality and Tourism, Faculty of Culture and Society, AUT University

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OUR MISSIONWe 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.

The success of any business greatly depends on good research. It arms you with valuable information that can save you time and money. Whether you are deciding to implement new technology or redesigning your brand, research will help you make the right decisions for your business.

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 the relevant information can be difficult. We strive 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.

A good majority of this research has come from you – our members. We appreciate your willingness to share your challenges

and information about your businesses so that we can develop our industry averages and help set benchmarks for the industry.

This is our third report and it contains key information on the industry – sales growth, outlet performance, employee productivity, consumer insights and regional analysis are all examined. Use this report in your planning and preparation for the coming year.

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 BidoisChief ExecutiveRestaurant Association of New Zealand

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INTRODUCTORY REMARKS

Purposes and uses of this report

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This report provides an overview of New Zealand’s restaurant sector enabling its stakeholders to explore statistics, opinions and trends. The statistics that were gathered reflect input from the Restaurant Association of New Zealand, various statistical bodies (Statistics New Zealand, GrabOne & American Express) and collaboration and discussion provided by the Restaurant Association of New Zealand and the Auckland University of Technology School of Hospitality and Tourism.

Survey and statistical data are complemented by input from industry leaders including Steve Logan and Michael Van de Elzen. We suggest that you peruse the table of contents, choose the items of special interest to you, and then ‘read around’ the report so that you can compile for yourself a composite picture of our exciting industry. Our report provides prompts that could improve productivity/profitability not only within the sector, but also your business. New legislation, staff productivity, remuneration trends and career prospect data have all been identified as areas that need operator attention. Valuable regional data also provides guidance and information on possible areas of opportunity within these key areas.

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 2012 edition, however for consistency the most recent data available is used in the current report. The authors also caution that the opinion pieces reflect their author’s opinions, not those of either the Restaurant Association or AUT University.

The compilation and research team welcome you to the third edition of the annual Restaurant Association/AUT University restaurant industry report, we trust you will enjoy and benefit from the information it includes.

This report was prepared by Key contributors

Lindsay Neill, Senior Lecturer, AUT University School of Hospitality and Tourism

Dr Lawrence Powell, Auckland University

David Williamson, Senior Lecturer, AUT University School of Hospitality and Tourism

Gail Pacheco, AUT University Faculty of Business

Nicola Waldren, Restaurant Association of New Zealand

Michael Kruesi, Research Assistant


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NOTES ON READING THIS DOCUMENTGraphs 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 0

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 show how this value relates to the base year of a data set, for example how much $100 worth of sales in the year 2012 translates in the year 2008. This allows for accurate 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 at the top, 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 are 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.

“This is a sample of what the quotes will look like.” OR,


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Restaurant Association member comment

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THE INDUSTRY AT A GLANCE

PHOTO: THE GEORGE HOTEL, CHRISTCHURCH

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TOP-LINE DATA P

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Key Industry Statistics At A Glance


1 TOTAL INDUSTRY SALES: NATIONAL

0

1,500

3,000

4,500

6,000

7,500

2008 2009 2010 2011 2012 2013

6092.9 6280.3 6465.9 6540.26978.1 7187.4

6092.9 6183.8 6149.1 6144.46629.5 6649.2

$ M

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Real Nominal

SALES GROWTH: NATIONAL

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2

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‘07-’08 ‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13

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REGION 2008 ($ million)

2009 ($ million)

2010 ($ million)

2011($ million)

2012($ million)

Cafes and Restaurants 3,252.6 3,294.0 3,318.6 3,299.4 3,485.0

Takeaway food services 1,192.4 1,224.0 1,321.0 1,368.4 1,492.3

Catering Services 489.9 529.7 646.2 612.0 668.4

Pubs, taverns and bars 842.3 899.9 872.0 967.1 1,048.9

Clubs 315.7 332.7 308.1 293.3 283.5

Total New Zealand 6092.9 6,280.3 6,465.9 6,540.2 6,978.1

2 TOTAL INDUSTRY SALES: BY SECTOR

nominal

real

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2012 PERCENTAGE MARKET SHARE

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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

2008 2009 2010 2011 2012 2013

104525103490102000100450100000104460

-6-5-4-3-2-101234

‘08-‘09 ‘09-‘10 ‘10- ‘11 ‘11-’12 ‘12-’13

11.51.5

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TOP-LINE DATANational Figures Breakdown By Year

nominal

real

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ssociation of NZ

SECTOR 2008 2009 2010 2011 2012

Cafes and Restaurants 57,870 54,940 53,970 54,910 55,460

Takeaway food services 17,870 17,090 17,270 17,750 18,320

Catering Services 9,260 9,170 10,840 11,170 11,640

Pubs, taverns and bars 15,200 14,610 14,300 14,160 14,120

Clubs 4,260 4,190 4,070 4,010 3,970

Total New Zealand 104,460 100,000 100,450 102,000 103,490

REGION 2008 ($ million)

2009 ($ million)

2010 ($ million)

2011($ million)

2012($ million)

Auckland Region 1,975.3 2,078.0 2,186.0 2,310.9 2,585.6

Waikato Region 471.2 461.3 493.1 447.2 474.9

Bay of Plenty Region 273.1 255.8 303.4 298.4 344.4

Manawatu-Wanganui Region

328.7 360.3 377.3 384.5 371.8

Wellington Region 936.9 945.0 860.4 840.7 876.4

Rest of the North Island Region

454.8 498.7 541.0 497.1 560.0

Canterbury Region 807.9 887.8 906.7 917.4 877.3

Otago Region 349.3 363.7 374.9 422.9 405.9

Rest of the South Island Region

495.7 429.7 423.1 421.1 481.8

Total New Zealand 6,092.9 6,280.3 6,465.9 6,540.2 6,978.1

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



37%

7%5% 5%

12.5%

12.5%

8%

6%7%

53.5%

18%

11%

13.5%4%

2012 PERCENTAGE WORKFORCE SHARE

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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

2008 2009 2010 2011 2012 2013

429592 435981 452636 451142479627 491077

429592 429280 430461 423840455669 454318

$

OUTLET GROWTH:NATIONAL

0

2,500

5,000

7,500

10,000

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15,000

2008 2009 2010 2011 2012 2013

146361454914497142851440514183

TOP-LINE DATANational Figures Breakdown By Year

REVENUE GROWTH:NATIONAL

-3-2-101234567

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estaurant Association7 NUMBER OF OUTLETS: BY SECTOR

nominal

real

SECTOR 2008 2009 2010 2011 2012

Cafes and Restaurants 6,810 6,953 6,933 7,080 7,095

Takeaway food services 4,413 4,470 4,543 4,572 4,632

Catering Services 888 909 749 786 773

Pubs, taverns and bars 1,671 1,665 1,651 1,638 1,629

Clubs 401 408 409 421 420

Total New Zealand 14,183 14,405 14,285 14,497 14,549

3%11%

5%

32%

49%




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MARKETPLACE IMPACTS

PHOTO: SAGGIO DI VINO, CHRISTCHURCH

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ECONOMIC OUTLOOK

Remuneration Productivity & Labour Pool Indicators

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With the world still mired in the wake of the global financial crisis, the external environment is not the most welcoming, with global economic activity expected to remain subdued. In particular, both the European sovereign debt crisis and the United States’ on-going fiscal and debt problems pose risks to the global recovery (Reserve Bank of New Zealand, 2012).

Despite this, the global outlook does appear less threatening than it has been in the recent past, and there have been some encouraging signs on a local level:

• Economic activity increased by 0.2% in the September 2012 quarter, following the 0.3% increase in the prior quarter, resulted in a 2.5% rise for the year ending September 2012 (Statistics NZ).

• Economic growth is expected to average at around 2.5% over each of the next five years, and potentially reach 3% in the year ending March 2014 (Treasury, 2012).

• A further positive sign is that business confidence has shown a reasonably strong improvement over the final quarter of 2012.

• On the downside, this additional confidence has yet to translate into strong hiring or investment intentions (ASB, 2013). Nonetheless, employment levels are forecast to rise over the next couple of years.

• Employment is expected to grow by 1.8% and 2.1% in the March 2013 and 2014 years respectively with strong growth expected in the primary processing and construction and utilities industries (Ministry of Business, Innovation and Employment, 2012).

• The Canterbury rebuild remains a significant driving force in the forecasted pick-up in the economy, contributing an estimated 0.7% per annum to growth over the next few years (Treasury, 2012). Around $5 billion of the estimated $30 billion cost of reconstruction is expected to occur within the next two years, with the remainder following later in the decade (Reserve Bank of New Zealand, 2012).

Construction activity is expected to continue an upward trend building upon the 4.5% rise experienced in the September 2012 quarter.

• Recent trends from the retail sector show that although retail sales have declined (falling by 0.4% over the September 2012 quarter due to declines in supermarket and accommodation sales), the sector is still 2.6% higher than a year prior. Moderate household consumption growth is also expected to continue over the next few years (ASB, 2012).

• Skill shortages and increased pressure to participate in online discount programs, further reducing profit margins, are two trends likely to hinder the hospitality sector from capitalising on the projected growth in consumption.


Associate Professor Gail Pacheco from the Department of Economics, AUT University tells us that despite the global financial crisis, there is light at the end of the economic tunnel.

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13 Restaurant Association of New Zealand & AUT University - Industry Report 2013

• A Restaurant Association survey in 2012 revealed:

- restaurant owners are feeling increasingly obliged to participate on sites such as GrabOne in order to avoid missing out on a growing number of diners choosing where to eat online via these deals.

- a nationwide skill shortage is evident, especially for management positions, with 90% of respondents finding it unacceptably difficult to fill these positions (and increase of 7% from 2010).

• Finally, while tourism expenditure was $23.4bn in the year ended March 2012, an increase of 2.4% from the previous year, the next couple of years are likely to be challenging. This can be attributed to the ongoing weak income growth from traditional tourist source markets and the loss of the tourism infrastructure in Christchurch. Despite increasing visitor numbers, there appears to have been a shift in the nature of visitors towards shorter visits and decreased daily spending. Once the worst of the global financial crises passes, tourism spending is expected to increase, with demand from the more robust Australian and Asian markets replacing that lost from their weakened Western counterparts. Consequently, growth in tourism is expected to grow by 9% and thus return to the pre-downturn level by the end of 2018 (Ministry of Business, Innovation & Employment, 2012).

COST OF GOODSCOMPARISON

From January 2012 to January 2013:

FOOD PRICES

UP 0.8 %

FRUIT & VEGETABLE PRICES

UP 5.9 %

MEAT, FISH & POULTRY PRICES

UP 1.9 %

NON-ALCOHOLIC BEVERAGE PRICES

UP 2.0 %

RESTAURANT MEALS & READY TO EAT FOOD PRICES

UP 0.6 %

March quarter 2012 vs March quarter 2013:March quarter 2012 vs March quarter 2013:March quarter 2012 vs March quarter 2013:

COMMERCIAL ELECTRICITY PRICES

UP 3.4%

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PROJECTED GROWTH FOR 2013

Using trend analysis based on the last five years of data, it is expected that if the same trend continues in 2013, we will experience growth in nominal industry sales of approximately 3%. This equates to a projected increase in real sales of 0.3% to $6,649 million. Further, based solely on trend information over the past 5 years, the number of people employed in the sector will remain roughly static at just over 100,000 and the number of outlets are projected to increase by approximately 0.6% in 2013, to 14,636. Additionally, the expected real sales revenue per outlet for 2013 is projected to be approximately $454,318.

SOURCE: Statistics New Zealand

14Restaurant Association of New Zealand & AUT University - Industry Report 2013

According to the NRA, 90% of restaurant operators are planning to add new menu items to this year’s product offering in order to satisfy their consumers’ changing demands. In its annual What’s Hot Survey, the NRA interviewed more than 1800 American chefs and asked them to identify what they believed to be the top restaurant menu trends for 2013. The hottest trends this group identified had three clear themes:

• Locally sourced food• Sustainable/environmentally friendly food • Healthy food

Of the top ten trends, nine fit into one of these trend themes. These trends along with their ranking in the top ten are shown in the following table:

Locally sourced food

# 1 Locally sourced meats and seafood# 2 Locally grown produce# 7 Hyper-local sourcing (such as restaurant gardens)

Sustainable/environmentally friendly food

# 4 Environmental sustainability# 9 Sustainable seafood

Healthy food

# 3 Healthful kids meals# 5 Children’s nutrition as a culinary theme # 8 Gluten-free cuisine# 10 Whole grain items in kids meals

Locally sourced food

There is no formal definition of ‘local food’, however the United States Department of Agriculture suggests that local food can be identified when it meets one of the following criteria:

• Food which is produced within a certain radius from the restaurant; usually 100 miles (161 kilometres).

• Food which passes through a short supply chain such as restaurants sourcing directly from farmers.

The local food movement has been growing over the last decade as exemplified by new terms emerging within vernacular language. New words such as ‘Locavore’ (a person who exclusively eats food produced or raised within a 100-mile radius of their home) reflect this change. In the NRA’s 2012 National Household Survey, 71% of the adults surveyed indicated that they would be more likely to dine at restaurants that offer locally sourced menu items. Furthermore, the NRA noted the following advantages for businesses in sourcing local products:

• Restaurant operators can build relationships with local producers and the community as a whole.

• Local sourcing will likely encourage repeat business from members of the local community, creating a constant and loyal customer base and keeping money in your community.

• Local sourcing helps in creating jobs in your community and building the local economy.

Sustainable/Environmentally Friendly Food

Again, there is no formal definition of ‘sustainable food’, but the American Public Health Association suggests that sustainable food can be identified when it meets the following criteria:

• Food produced or raised in a way that meets the food needs currently without compromising the ability of future generations to meet their own needs.

• Production methods which do not harm the environment and where appropriate use natural biological cycles and controls while sustaining the economic viability of the farm’s operations.

The demand for sustainable/environmentally friendly food has been a trend of increasing importance over the last decade. According to the NRA, the demand for healthy food will continue to grow in the years to come because of the increasing awareness of sustainable resource use and protection of the environment. Reflecting this, in the NRA’s 2012 National Household Survey, 58% of the adults surveyed indicated that they would be more likely to dine at restaurants that offered sustainable and/or environmentally friendly menu items than they would have been two years previously.

INTERNATIONAL TRENDSM

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trends and the National Restaurant Association (NRA) of the United States of America provides an insight into the latest American restaurant trends.


Healthy Food

Consistent with the other trends, there is no formal definition of ‘healthy food’, but The Dictionary of Modern Medicine suggests that healthy food needs to meet the following criteria:

• Food that is ‘good for you’ such as food that is high in natural vitamins, fructose or fibre and low in fat, salt and/or sugar.

• Food that reduces cholesterol, atherosclerosis and the risk of infections, cancer or a stroke.

Health awareness is growing among restaurant customers and in the NRA’s 2012 National Household Survey, 71% of the adults surveyed indicated that they are much more actively seeking healthy menu options than they did two years ago. The survey indicated that women (75 per cent) are more likely than men (66 per cent) to say they are trying to eat healthier and frequent restaurant customers are more likely than the general public to make that statement.

Restaurant operators also said that customers were more inclined to order healthful foods than they did two years ago which has resulted in more healthy dining options appearing on restaurant menus.

Three birds with one stone

Meeting the demand for these trends will be beneficial for astute operators because a premium price point can be placed on locally sourced, sustainable and healthy food.

Realising this potential can be achieved relatively easily. This is because the 3 trends are interrelated and all start with sourcing food locally:

Locally sourced food is immediately more sustainable than imported food because less fossil fuel is used in its movement from production to point of sale. Unlike industrially raised food, which is generally grown with increased levels of pesticides, chemicals, preservatives and additives, sustainable food is produced with a focus on the healthiness for the consumer. In other words, sourcing food locally is often more sustainable, and in turn, healthier. These themes are reflected in the following flow chart:

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Sourcing locally

LOCAL SOURCING IS

POPULAR HERE TOO..

Sustainable food items and culinary themes are gaining prominence in New Zealand’s hospitality industry.

A Restaurant Association hospitality industry snapshot survey in 2013 revealed that 85 per cent of operators make a conscious effort to use locally sourced products in their menus. In fact 35 per cent have already embraced “hyper” local sourcing, utilising their ‘own grown’ produce - predominantly herbs and vegetables - in their businesses. More operators indicate an intention to get on board this trend over the next 12 months; 25 per cent say that this is something they will focus on in 2013.

Smart operators are also looking at ways to include their customers in response to the demand for locally sourced products, with one Taranaki operator commenting:

“We just grow our herbs, but we swap coffee vouchers for home grown produce from our customers. We get a lot of fruit and vegetables this way and it gets real 'buy in' from the customers; they love it.”

Being sustainable

Offering healthy food

“Currently we grow many varieties of herbs, flowers,

micro greens, leafy vegetables. As of this year it is our intention to grow the majority of our fruit and vegetables in a large

garden located close to the restaurant..”



The Food Bill of New Zealand is a review of the Food Act (1981), and the Food Hygiene Regulations (1974). The new Food Bill aims to modernise food safety by emphasising health food risks and minimising potential public health risks.

The Food Bill was first introduced to parliament in May 2010, but is yet to be passed into law. The Food Bill differs from the Food Act (1981) because it takes a risk-minimisation approach to food safety. This initiative contracts the current Food Hygiene Regulations (1974) with its prescriptive emphasis on both hygiene and building structure. Furthermore, the Food Bill emphasises the practices and processes of the business, identifying hazards in them and putting measures in place to eliminate these hazards.

The Food Bill aims to standardise food safety based on the level of risk: low, medium or high. Currently, the practices adopted by Local Council authorities in New Zealand are not consistent nationwide. While in some regions the local Councils carry out regular food safety inspections, local authorities in other regions do not. This variance has occurred because of the gaps in the current legislation.

When the new Food Bill becomes law there will be a single set of regulations for food safety that standardises practice across the country. This change will eliminate the need for local bylaws and will improve compliance and enforcement procedures as well as clarify the roles of food industry regulators. According to the Ministry for Primary Industries once the Food Bill comes into force any business involved in food, including restaurants and cafes, will be obliged to comply with the Hazard Analysis and Critical Control Point (HACCP) program. HACCP is an internationally recognised system that is designed to manage hazards and ensure safety for food businesses. HACCP is an integral part of the following risk-based food safety programs:

• Food Safety Programs (FSPs)• Risk Management Programs (RMPs)• Wine Standards Management Plans (WSMPs).• Food Control Plans (FCPs)

Although some people are resistant to change and some may assume that the implementation of a FCP could be time consuming, many operators have been very optimistic and pragmatic about it. This is reflected by Carleen Furner of The Station Cafe at National Park, who noted in a Restaurant Association snapshot survey recently:

“FCP's are a bit like Building WoF checks, Once they become as regular as mopping the floor the team just does it as a normal routine.”

How the Food Bill will impact your business: “It took my staff and I almost 6 months to fully get our heads around the various processes and required daily checks etc. It was not a simple process of implementation. I'd seriously advise everyone to trial the new FCP whilst it is still in planning stages so that when it becomes law they are au fait with the requirements.” Restaurant Association member comment

Although this initial period may incur some indirect costs, it will over the long run bring several benefits over the old legislation. By keeping such records, as required by a FCP, restaurants and cafe owners will have a better overview of their operations and this may result in savings from reducing wastage, monitoring maintenance costs and lowering costs arising from other inefficient processes.

Training staff on food safety matters will also become more flexible under the new Act. Competency in the matters of food safety for different positions in a restaurant or cafe will be sufficient and as a result the structured training of the previous Act will no longer be required. This will further benefit restaurant and cafe operators.

Finally if a FCP is in place restaurants and cafes will not be inspected anymore but simply audited. Therefore although there may potentially be a long transition period between the Bill being passed, coming into force and then being trialled, it is advisable for restaurants and cafes to use this time to gradually adapt to the new legislation under the voluntary implementation scheme.

Currently only about 2,500 businesses have adopted the voluntary implementation scheme, however, early implementation of FCPs will allow restaurants and cafes to adjust to the new legislation at minimal disruption to the business and also to realise the benefits of using FCPs.

For more information on the Food Bill contact the Restaurant Association or visit www.foodsafety.govt.nz.

THE FOOD BILLM

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food businesses in New Zealand.

http://www.foodsafety.govt.nz





The Sale & Supply of Alcohol Act has replaced the long standing Sale of Liquor Act (1989). The new legislation was drafted to: • Create a tighter licensing system. • Provide support for alcohol providers.• Promote the safe and responsible sale and supply

of alcohol. • Reduce excessive drinking and its associated

harm.

The Sale & Supply of Alcohol Act will have the following impacts on cafes and restaurants:

Territorial Authorities/Local Alcohol Policy

The Sale and Supply of Alcohol Act empowers Councils and Territorial Authorities to set local policies relating to the sale and consumption of alcohol. This is called Local Alcohol Policy. Local Alcohol Policy can apply to:

• The issuing of licences in a region or part of a region.

• The number and location of premises operating in a particular area.

• Conditions on trading hours. • The imposition of a one-way door policy in their

region.

Implications: Hospitality businesses have to conform to the various Local Alcohol Policies of Territorial Authorities, which will be able to set different conditions in different regions. Generally, the Local Alcohol Policies under The Sale & Supply of Alcohol Act will be more stringent than the policies were under the Sale of Liquor Act (1989).

Trading Hours

All licenses issued include conditions on trading hours. The default maximum of national trading hours on alcohol sales is between

• 8am and 4am, for on-licences• 7am and 11pm for off-licences.

The trading hours could become more or less restrictive in accordance with the conditions of the license issued under a Local Alcohol Policy.

A one way door policy may also be imposed after a certain time (generally at 2 am). This may be as part of the licence conditions or as part of the Local Alcohol Policy.

Implications: Cafes and restaurants will have to meet conditions that may or may not be favourable for their business, depending on the conditions of the licence and the Local Alcohol Policy.

The restriction of alcohol sales between 4am and 8am may restrict bars that rely on international sporting events (in the Northern hemisphere). The live time delay given New Zealand’s ‘first day status’ may prove problematic.

Risk-based Fees

The Sale and Supply of Alcohol Act allows for the introduction of a risk-based licence fee scheme through regulation. This risk-based fees scheme aims to recover the costs associated with alcohol licensing. It also aims to incentivise licensees and managers to improve their practices to reduce the risk of alcohol-related harm.

Implications: Overall, licensing costs are expected to increase.

Purchase Age

The purchase age has remained at 18 years of age for both on-licence and off-licence premises.

THE SALE & SUPPLY

OF ALCOHOL

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Hospitality operators throughout New Zealand will be impacted by new sale of liquor legislation that was passed into law in December 2012 and is being rolled out in 2013, with key dates for implementation in June and December 2013.

18

License Conditions

Beverages with a low alcohol volume (2.5%) and non-alcoholic soft drinks must be available at all times. Water must be available without charge. Further, the supply of beverages with higher alcohol volume should be reasonable and responsible.

The time period between food ordering and its delivery must be reasonable. Information on public transportation must also be available.

Implications:

Licence renewals will be administered more stringently by the District Licensing Committees of the Local Territorial Authority in which the premises are located.Complying with the conditions may imposes higher costs for restaurants and cafes because they will have to provide water without charge and because low alcohol volume and non-alcoholic soft drinks will need to be available at all times.

Special Day Trading (Christmas, Easter Sunday, Good Friday and before 1pm on ANZAC day)

The sale of alcohol on these days will be be restricted, unless an event licence is obtained. Restaurants and cafes need to apply for a special license at least 20 days before the event from their local council.

Implications:

The process of obtaining special license will be more time consuming and may incur additional costs.

REGIONAL SPOTLIGHT:

A VIEW FROM QUEENSTOWNThe Queenstown CBD has the highest number of liquor licences per capita in New Zealand.The total number of licences in the district grew 6% in 2010 and 18% in 2011 and while there was a 5% reduction in 2012 many local operators feel there are still too many licensed establishmentsand this is harming Queenstown’s image.

Opinion amongst the various interested parties has been divided. While the police and the council generally believe that the number of on-licence properties does not have a harmful effect on the town if the number of patrons remains consistent, some hospitality operators disagree.

These business owners feel that a cap on liquor licences would have a positive effect on the image of the town. Restaurant Association Queenstown Branch President Cameron Mitchell says

“I recently toured much of New Zealand and nowhere did I see it as bad as it is here. Queenstown is supposed to be a premium product, yet you see all these flyers promoting cheap drinks, which I think is detrimental to Queenstown.”

The Sale & Supply of Alcohol Act and its tougher licensing conditions have therefore been welcomed by many hospitality operators. Selling cheap drinks and the ease of acquiring a liquor licence are things they hope will change. It will give communities a greater say over liquor outlets, set tougher rules for licence applications, and could mean change for the Queenstown bar scene.

The general consensus among these business owners is that the increasing number of liquor licences granted in Queenstown was tarnishing the resort town’s image by increasing competition, which encouraged low alcohol prices and consequently a binge drinking culture.


“We need to strive for quality over quantity if we want to

uphold the pristine image of Queenstown as an international

tourist destination.” Restaurant Association member comment

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CHALLENGES RESPONSES

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2013 CHALLENGES

Hospitality Industry Survey Results and Industry Comment

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TOP CHALLENGES

2012

EXPECTED TOP

CHALLENGES 2013

Labour costs 61% 58% (1)*

Lack of skilled employees 42% 34% (4)

Operating costs 38% 40% (3)

Food costs 37% 29% (5)

Building/Maintaining sales volume 37% 44% (2)

Lack of cashflow 19% 13% (9)

Competition from other businesses 19% 21% (6)

Tax burden 16% 17% (8)

Government legislation/compliance 15% 18% (7)

Menu pricing 7% 7% (10)

Access to capital 7% 7% (11)

Inflation 3% 6% (12)

Shortage of supplies 0.4% 2% (13)

LABOUR COSTS pose biggest test for business

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The long, hot summer of 2013 provided a much needed rise in trade for many regions and anecdotally the mood of the industry seems much improved from 2012. National sales grew 6.7 per cent from 2011-2012, hopefully indicating a swing to more profitable times.

However, while hospitality operators are cautiously optimistic, the number of business closures reminds us that trading conditions have been extremely difficult over the past few years and there continues to be many challenges to remaining profitable in 2013.

“Since December 2012 we have had a good up lift in the business, hugely so in February - making it a record! Mood around this town is much more positive, in fact it is upbeat!” Restaurateur, Northland

A recent Restaurant Association snapshot survey saw operators identify their top challenges for their businesses, currently and for the future. Looking back at these concerns in 2012, the top challenge then facing hospitality businesses was identified as LABOUR COSTS, with 60.8 per cent of this survey’s respondents choosing this as the biggest test for their business. Operators don’t see this changing: it also rates as the highest predicted challenge this year. Needless to say, as hospitality is such a labour intensive industry, any reductions that can be made to labour costs will positively impact a business’ bottom line.

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REGIONEXPECTED TOP

CHALLENGE FOR 2013

PERCENT

Northland Operating Costs 58%

Auckland Labour Costs 58%

Bay of Plenty

Building and Maintaining Sales

67%

Waikato Lack of skilled employees

73%

Hawke’s Bay Labour costs 90%

Wellington Labour costs 58%

Rest of Nth Island Labour Costs 69%

Canterbury Labour Costs 67%

Rest of Sth Island Labour costs 52%

Expectation of general business conditions in 2013

23%

39%

38%

TOP CHALLENGES: By RegionIndustry Results

“We have made huge developments in labour cost which has meant we come out of 2012 far better. When we took over the restaurant labour was at 50%! We are still only halfway and learning the tough balancing act of keeping customers happy but not blowing the budget.” Restaurateur, Wellington

A LACK OF SKILLED EMPLOYEES, which rated the second biggest challenge in 2012, is a contributing factor to hospitality operators’ concerns over labour costs. Owners are unable to find suitable candidates to fill vacant positions in their businesses and find themselves paying more to secure, and retain, good employees – sometimes more than they can afford.

“Our main issues are staff. Not only cost but securing them for a reasonable time while paying them a basic wage. We would love to pay them a better rate but we cannot afford to.” Café owner, Auckland

FOOD COSTS and BUILDING AND MAINTAINING SALES VOLUME are also of major concern. At 37 per cent, food costs were rated as the third biggest challenge in 2012. Building and maintaining sales volume was also 37 per cent. Many business owners commented that although food costs (and other costs) had increased they found it difficult to increase their menu pricing past a perceived threshold. As one Auckland operator commented, “Customers are always looking for value for money and don't appreciate the impact that rising food and operational costs have on the consumer end.”

COMPETITION FROM OTHER BUSINESSES also featured as a bigger concern this year than in previous years surveys. Many regions have seen a proliferation of new businesses opening over the past 18 months. Some operators questioned how the industry can sustain this growth in the number of businesses as it is ‘spreading the custom slim’.

This comment from an Auckland restaurateur captures the sentiment of many: “Navigating all aspects of business is proving difficult due to rising costs. On top of everything our rent increased by $20k p.a last year! Simply increasing menu prices is not an option. Customers are hurting too. Compliance takes up a lot of management time and resources. Taxes! Don't even go there. Currently we're spending on team building, staff training, building customer loyalty and organising sponsored events. Trying various marketing avenues. Daily-deals? The devil made me do it.”

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As a measure of BUSINESS CONFIDENCE within the industry, 77 per cent believe that business conditions for the industry will remain the same or improve over the next 12 months and 55 per cent of the industry considered that current business conditions for their business were good or excellent.

Improve

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Were sales up or down?

27%29%

44%

Good operators will be monitoring their operational and other costs in an effort to remain profitable, however many operators believe that it is becoming more difficult to control these costs. In a survey conducted by the Restaurant Association 54 per cent of respondents indicated that it was MORE CHALLENGING TO CONTROL COSTS in 2012 than in 2011.

Respondents from the South Island were more positive than their North Island counterparts. In the Northland and Bay of Plenty regions 67 per cent of respondents found controlling costs more difficult in 2012.

However, in line with industry sales figures, which reported a 6.7 per cent sales increase in 2012, the largest percentage of respondents in this survey reported that SALES WERE UP, with 44 per cent, indicating sales growth of, on average, 7 per cent.

Just under 30 per cent of survey participants indicated that sales remained the same. Unfortunately a similiar number reported a sales decrease for the year, with an average decrease in sales of 11 per cent. Of these operators who reported sales decreases, a significant 88 per cent said that they found controlling costs to be more difficult in 2012 and not surprisingly building and maintaining sales volume is expected to be their biggest challenge in 2013.

In Auckland, 45 per cent of operators reported an increase in sales in 2012, compared to 27 per cent of Wellington operators.

Maintaining a profitable business is still difficult for many operators around the country. Despite 44 per cent indicating that sales had increased in 2012, only 29 per cent reported that profitability was up for the year. Overall, 35 per cent felt PROFITABILITY WAS ABOUT THE SAME.

The key factor contributing to a lack of profitability was again identified as labour/wage costs.

And while only 9 per cent report that trading conditions for their own business are “excellent”, 46 per cent describe them as being “good”.

”I think in the food industry there is a more positive mood amongst business owners and the public. For us, people seem to be using cafes more regularly. Cafes are becoming a 'social hub' and people are looking for fresh, homemade food in a nice welcoming atmosphere.” Café owner

The most optimistic region appears to be Hawke’s Bay, as over 90 per cent of that region’s business owners say that business conditions for the industry are getting better (60 per cent), or remaining the same (30 per cent).

”I think 2013 will be "OK" and we are looking at ways of increasing sales by developing our profile / brand awareness, enhancing our social media footprint, loyalty schemes etc. Reducing labour costs when opportunities arise will be vital.” Auckland restaurateur

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BUSINESS CONFIDENCE

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Better overall Better overall

Decreased overall

Decreased overall The same The same

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ENVIRONMENTAL AWARENESS market response: Steve Logan, owner Logan Brown


It was called The Age of the Stupid. The movie gave a

future view, 50 years from now, when the earth’s environment has

been destroyed by man.

The story was told like news

coverage using documentary or

news footage, the kind of thing we see everyday in

our media; floods, fires, oil spills.

Seeing this, I guess it dawned on me that I too would be stupid if I just watched our environment deteriorate and continued to do nothing to stop it. I began by selling my thirsty old Daimler car; I began to recycle better, and compost food waste. I insulated my home. My personal mission spilled into my restaurant business Logan Brown. We realised that our business had the potential to make a difference because we use so many resources and come in to contact with so many people.

As a business we started to support organisations that are on the front line of raising awareness about climate change, businesses like 350.org, WWF and The Last Ocean. We also signed up with the regional council’s programme called Enviro-mark. This programme addressed the business’ carbon foot print.

Consequently, we have achieved and held Gold status for 3 years.

Implementing this programme meant overhauling our water and energy use; reconsidering where we source our products; reviewing our recycling practices and health and safety. The programme is about putting in place systems that are permanent and ensure good practices are followed.

This has created a business benefit for Logan Brown, including:

• We feel good about this programme because even though we are not perfect we are actually doing something for the environment.

• The team like to work for a business that cares.• We have stabilised our energy usage costs.• Guests are beginning to take notice and while it’s

hard to measure we believe potential “green thinking” customers will choose us over a restaurant that does not have good environmental practises.

• There are consumer driven organisations emerging that will enable consumers to see which businesses are operating in ethical and environmentally friendly ways. One that I have been involved with is Conscious Consumers (www.consciousconsumers.org.nz). I believe they will become quite influential in the near future. Logan Brown has signed up with the Conscious Consumers programme and has achieved their accreditation standards in five areas - being awarded 5 Conscious Consumers badges.

Although many businesses owners do not believe that climate change is an issue, or their problem, I reckon it is smart business practice to make changes to become environmentally friendly now because it will not be too long before the market or possible regulation makes them do so. Maybe the next generation with thank us for passing on a reasonably clean and healthy planet.

Like a lot of kiwi’s I have always had been concerned about mans impact on the environment. And, also like most, I just worried about this but did little ‘practically’ about my concerns except paying Greenpeace a monthly donation. However, my inaction radically changed about four years ago when I saw a movie that really shocked me into action.

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Inducted into the

Restaurant Association

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of Fame in 2012, proud

and successful

owner of Molten

Restaurant and Liquid

Molten (2003-11), as well as

the Molton Cookbook

(2011), Michael Van de Elzen's list of achievements don't stop there; the Food Truck, Michael's popular foray into television, is now in its third series. Ever the reluctant celebrity, Michael took more time out of his busy schedule to tell us why he chose the stove and the demanding life of a chef over that of a poultry farmer.

Like many people, Michael had to make career choices. Two options were at the top of the list; take over and run the family’s poultry farm business in Henderson, or follow his heart and passion into food. His sisters helped him make up his mind. Both sisters were waitresses at Tony's vineyard restaurant in Henderson. They secured the young, still at school, Michael a job there doing the dishes. Even then, amid the piles of dirty plates and pots, Michael instinctively knew 'this is me'! Michael recalled: “I loved the drama and action of the kitchen, there's nothing like a kitchen operating in full flight”.

After leaving school Michael began work at Auckland’s Kermadec restaurant under Chef Takashi Nakamura. Nakamura was a key influence on Michael, as Michael recalls, “Takashi opened my eyes, he was a true and perfect craftsman”. At the same time Michael began culinary studies at Auckland Institute of Technology (now AUT) but readily admits that AIT 'just didn't do it for me'. Rather, Michael sought the creativity that Takashi espoused, a disposition that was soon to land the young trainee chef in hot water.

Thinking he could inject his own style into one of Takashi's signature dishes, Michael added chili to Takashi's famous ratatouille stuffed and crumbed squid tubes. Michael recalled the fallout, something that made him realize that there is more to food than just a list of ingredients...that a real chef has thought these dishes through; they are in fact a part of the chef. Sitting in the staff room unaware Takashi was on the line tasting the mis en place, a furious Takashi appeared demanding, in no uncertain terms, to know who had added chili to the ratatouille mix: Michael reluctantly admitted 'it was me'. What Michael learnt immediately from the irate Takashi was that this dish was Takashi, his years of knowledge and passion were encapsulated within its very being, it was a sacred testimony to Takashi's skill and artistry that had just been completely ruined by someone (Michael) who thought 'it would taste better with chili', and for Takashi it did not. Michael quickly realized that food is a serious business.

From Kermadec, Michael took charge of the kitchen at Antiks restaurant on Auckland's Dominion Road. While Antiks gained a fantastic reputation because of Michael’s food, Michael admitted “I still had a lot to learn, we got Jerusalem artichokes, and I really had no idea what to do with them except for what a cookbook told me”.

What makes a chef successful?

Lindsay Neill, AUT senior lecturer, took time out to find out what makes Michael Van de Elzen tick; and it’s more than just having a great talent and being in the right place at the right time.

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WHAT MAKES A SUCCESSFUL CHEF? market response: Michael Van de Elzen, The Food Truck Garage

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TOP TIPS FROM

MICHAEL VAN DE ELZEN

• Travel overseas to gain some international experience and to learn about other dining cultures around the world - it will begin to fill the knowledge void.

• Systems provide the cornerstone of your restaurant business. Spend some time getting the systems right. No detail is too small, at Molten they even had training on how to answer the telephone.

• Michael’s time in London working at Terence Conran’s Bluebird restaurant taught him valuable lessons on how to manage staff. “It taught me there are two ways, hard and good, and there’s an art to finding a balance between the two.”

• Hospitality can be an inherently unhealthy business; you work long hours and tend to eat late or at odd times. It is a physically demanding job and mentally taxing. Try to find some balance and maintain good health. As Michael says, “unless you are on top of your health, you’re making it harder on yourself, in any job.”

• People will respond if you are passionate about something, so focus on what excites you most. In Michael’s case he is passionate about healthy fast food and the business of bringing great food to the public. Michael says of his new venture, The Food Truck Garage, “my goal is food cooked to order in under 10 minutes - and it has to be healthier than what’s already out there.”


Consequently, Michael decided to travel overseas, to gain more experience and begin to fill the knowledge void cookbooks could not.

Michael found his niche cooking for mega star Terence Conran in London's 500 cover Bluebird restaurant. Michael was amazed at the scale of Conran's business; “it was a great experience, but I was like a robot, it was a military style operation, that while lacking the passion I sought, had the operational practicality and systems of control that later provided the cornerstones I used for Molten”. Michael recalls, “working for Conran turned a boy into a man. Each night I'd walk back home, down the Kings Road, tears in my eyes from the exhaustion and demands of the work. But I was determined I would not fail and summoned up some of my genetic heritage, Dutch courage”.

After six years Michael returned to New Zealand with wife Belinda and took over the chef's position at Hammerheads on Tamaki Drive, Auckland. After some time there “I begged, borrowed and maxed out the credit cards to open Molten. We were so cash strapped the restaurant introduced a new design theme...no art work, only because we couldn't afford any!” Because of substantial debt, Michael was determined that the restaurant 'simply could not fail'. Looking back Michael noted, “my time at Conran's restaurant gave me the systems of control I needed to make Molten work...we had everything trained for, how to answer the telephone, everything, in fact staff often joked that they had been Moltonised!” Success bred more success and to generate a wider cash flow Michael and wife Belinda, opened up Liquid Molten. With the business closed Sundays Michael used that time to put together a restaurant cookbook, The Molten Cookbook, with food photographer Babiche Martens. Each Sunday for about two years the pair worked on the book. When the book was almost complete Michael sought a publisher. Random House jumped at the opportunity to help complete the remaining parts. This work, combined with his past experience gave Michael the moment when everything fell into place, what he calls his epiphany, “I knew what I was doing, I didn't need to rely on a book, even though I still use them, I felt I had found my culinary self.”

After this, things started moving, Michael was asked to audition for a new TV show, The Food Truck. Michael recounts, “the TV company rang me up and asked me to audition. Naively, I thought it was just me, but after speaking to a few other chefs around Auckland, it turned out that they auditioned...almost everyone I knew.” This was an ego blow, but Belinda talked sense into Michael, and as they say the rest is history.

Michael started filming the day after passing the audition. Early episodes took a while for Michael to adjust to but he soon got into the swing of it, admitting “it filled a creative gap, and I am a compulsive workaholic”. Selling Molten around the time of the Rugby World Cup in 2011 and filming more series of The Food Truck has kept Michael busy, but Michael has more plans afoot. Michael and Belinda’s new venture, The Food Truck Garage, has recently opened in Auckland’s City Works Depot.

Overall, Michael has no regrets in choosing hospitality over poultry farming. 'I've cooked for the Queen and she thanked me for her food experience but what I really love is watching people having fun in my restaurant, then popping their heads round the kitchen door and saying "that was great", thank you'.

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REBUILDING CANTERBURY market response: Jimmy Summerfield

When the 10th September, 2010 earthquake hit we got off light, our house was damaged, our two boys slept through it and our restaurant, The Flying Burrito Brothers Christchurch, closed for nine days. Our business partners, my wife’s sister Nicky and her husband Ed came through relatively unscathed too. We were all lucky our building used to be a bank and we had undertaken some earthquake strengthening when we opened in 2007 so all things considered our building held up remarkably well. Over the nine days that the business was closed we called in all of our staff and completely cleaned the restaurant, kitchen and storage areas, took photos of any damage and losses and like many other businesses and home owners put in an insurance claim. Fortunately for us, the business interruption insurance paid out reasonably quickly, so we put the earthquake behind us and moved on. When I think back, as a family, we weren't that phased by the continuing aftershocks, we used to laugh and dance when they happened and say "hey boys, shaky house, let's dance!" For us, life went on as normal.

So let’s fast forward to February 22nd 2011. Kate can recall this day really clearly. Kate recounts; “We both left for work as usual for the day. Later, around noon, we were heading home to pack up the garage so that workmen could begin repairs on our home caused by the September quake. After collecting our two boys from preschool, we pulled into our driveway. Hadley was asleep in his car seat, Jimmy took Oli inside and I was getting out of the car. Next thing the earthquake hit. I remember it so well.... Jimmy came flying out the French doors with Oli in his arms and onto the back lawn, I hung onto the side of the car watching Hadley sleep through the whole ordeal while the car rocked violently from side to side and the house windows flexed and bowed with every movement. It was scary!

I honestly thought I was going to fall in the creek behind me, and that the glass windows would break and shards of sharp glass come flying at me.

When the shaking finally stopped, everyone except Hadley was feeling a bit rattled. We immediately thought of work, what was it like, how were the staff, was the building still standing? While we were used to the aftershocks, Jimmy and I thought that this quake was a biggie. We jumped back into the car and went racing towards town, usually a 10 min drive away.”

Jimmy recalls the trip into Christchurch; “As we got closer to town we realised the extent of what had just happened. We turned into Salisbury Street and there were people coming towards us with blood on their faces, dazed, shocked, crying. No one knew quite what to do. It started to dawn on us that this was a serious earthquake. It was scary, we had no idea of the extent of the damage and how it impacted on the emotions of people, but emotions were running high. Coming to town from our home we had no idea of the damage this particular earthquake had created. In all the chaos, we saw Jess, one of the girls from the coffee shop opposite our restaurant. She was literally weaving her way down the road. She told us that the town was falling down, people were everywhere and that we should get out. Jess also said that she had seen our staff, that they were all safe and that our building was still standing. Fortunately, they had managed to lock up and all get out safely. Phew! Hearing this we turned around to try and head home.

Traffic was gridlock and it took us an hour to travel only four blocks. I kept phoning, trying to get hold of the staff. Kate went into family mode checking on parents, sisters and extended family.

Jimmy Summerfield, Head Honcho, at Christchurch’s The Flying Burrito Brothers tells us what it was like to experience the multitude of earthquakes Christchurch has experienced, run a business, a family and continue on in a ‘business as usual, we took it in our stride’ heartland kind-of-a-way.

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...REBUILDING CANTERBURY HOSPITALITY

The urge to make sure that everyone was ok was a very real and an almost obsessive thing ‘to-do’. When I got hold of our Bar Manager Tyron, he told me that the back bar had lost stock, and that he managed to avoid the many falling bottles of our precious tequila collection. At the time of the quake we had customers dining. They dived under the tables and were screaming, but he made it a priority to take care of them first. Then the tills were locked, doors secured and all staff evacuated. I didn’t find all of this stuff out at once, phone reception was intermittent, but as the day progressed we put the pieces together.

Thinking that this quake was similar to the September earthquake we planned on getting on with our lives, home and business cleaned up and back trading as soon as possible. Little did we know! Like many other Christchurch residents our business partners had not fared well. Their house was badly damaged, liquefaction had drowned parts of their property. But this paled into insignificance…because Nicky’s children's grandparents were killed by falling debris. They were on a bus in the CBD, near Colombo Street. Apart from the grief it took four weeks for their unfortunate deaths to be confirmed…it was very, very stressful. We took care of the business dealing with banks, creditors and the insurance company for the business. It was the least we could do, as our business partners were dealing with their own grief and earthquake hassles. This made Kate and I realise that we needed time away as a family, a temporary escape, a time to take stock of the tragedy.

Unfortunately, our restaurant was in the Red Zone. Christchurch City Council said that this zone could be closed indefinitely while they assessed, demolished and rebuilt….this was not good news. We still had overheads and staff to pay. We gave staff their ‘average’ wages during this time, they too, like us, have their own financial obligations; we wanted to look after them, we were a family. We continued paying wages as usual. We paid the March rent and business mortgage and tried to keep up with creditors, despite the lack of a normal business income. We thought that we would only be closed for a short period of time. Financial outgoings cut into our business funds and the bank agreed to help us through, which was lucky for us. In mid-March our accountant advised us to lower all business overheads so that our business interruption insurance would pay us the maximum.

We had business interruption cover for 1 year. We honestly thought we would be well taken care of and had no financial worries because of the business closure. We envisaged that the insurance would cover all the company’s mortgage and outstanding debt. And so cost cutting began. We started with staff. All part timers had to have their contracts terminated because there was no business to generate their wages. A week later all management contracts were terminated (including mine) and holiday pays were settled in full. That hurt! My wife, Kate and the accounts lady were the only employees left on the books as Kate handled all the insurance claims and clean up and Liz (the accounts lady) was needed for accounting.

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CHRISTCHURCH EMPLOYMENTRetail Trade & Accommodation Sector

Number of employees

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CHRISTCHURCH ACTIVITYAccommodation and Food Services Sector

Sales Activity

Unadjusted Seasonally Adjusted

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It was very hard letting the staff go, but it was something we had to do. Most staff moved on to other restaurants, some left town, others left the country.

Kate and I were down to one income. Reality kicked in. We knew it would start to hurt if we didn't tighten our purse strings. Like all business people we had taken a few personal gambles over the years, achievable because we had such a successful business but we never foresaw an earthquake changing all of that! Spending money on the little luxuries was never questioned before the quake. The time had come to adapt our lifestyle to the "new Christchurch." For the first time in 5 years I went to work for someone else. It was probably the hardest pill to swallow. I was a slightly envious that the business I went to work for was making money and that our business, which I prided myself on, was closed. It was hard, but we still had each other, a liveable house with running water and a flushing toilet…luxury items. We were also so much luckier than many others, some of whom had lost everything, especially loved ones.

While we lived day to day and did what we could to get through our home's insurance hassles, Kate also worked on FBB Christchurch's insurance claim. We had been allowed access to the site on a few occasions. This allowed us to itemise stock and plant, clean the rotting food away and assess the building in general. We put in claims to the insurance company for stock and material damage, having completed a stocktake and photographed everything, right down to the 200+ tequila selection, table sauces and rotting food in the chillers. It was a major undertaking, but we were determined to get all the money we were owed.

With realisation that FBB Christchurch wasn't going to be open again in a hurry we again stepped up the search for a second and new restaurant location. In April we came across a vacant Pizza Hut in the Northlands Shopping Centre that we thought was ripe for the picking.

We secured the site and our architect went to work to convert it. We needed to recreate the brand but on a smaller scale (85 covers vs the 200 in town) at as little cost as possible. We secured the money to fit out the site and set to work. We managed to get some furniture, equipment and Mexican artefacts out of the city restaurant and leased them to The Flying Burrito

Brothers Northlands as an interim decor measure. Due to the good relationships we had with the architect, the building contractor and our previous suppliers we managed to get The Flying Burrito Brothers Northlands built in record time. On the 8th July 2011 we opened for business. I was back working for myself again and could not have been happier. We had given Christchurch back one of its regular haunts. People flocked through the newly painted, pink doors and it felt so good to be able to feed the people of Christchurch again and deliver the great service and delicious margaritas that we were famous for. Only one Prep Chef, and the Bar Manager from FBB Christchurch, came over to the new restaurant, all the other staff had moved on.

A year and a half on and we have just

finished extending FBB Northlands by adding an outdoor area. We are consistently busy and we certainly made the right move by getting the business open quickly.

FBB Northlands has been our saving grace in many ways. It has helped us repay the outstanding monies owed by FBB Christchurch, but most importantly we had to move on and concentrate on what we have now and make it work the best we can. Insurance premiums are huge, overheads in general are higher, but again, we have a successful business that will help to pull us all through.

The original FBB is located on the corner of Armagh and New Regent Streets, inside the "red zone". The restaurant remains closed and we are still unsure if we will be able to get back in. The building is still standing but all the buildings around it have gone. Christchurch city is being rebuilt in zones and this site will be in the middle of the Performing Arts Zone. We really want to be a part of the new central city development but while the bureaucrats discuss what’s happening and when it will happen the waiting continues for us.

It's been an emotional few years full of definite lows and memorable highs. We finally have the two restaurants we always wanted, admittedly one of them isn't quite as busy as we'd like (it’s closed!), but the other one is absolutely thriving! We've also survived over 11,000 aftershocks and not many people can say that. It's been hard but we aren't the type of people who give up, we'll fight this to the end and make the most of every opportunity that comes our way. Maybe it's time to try for three restaurants!”

“Like all business people we had taken a few personal gambles over the years, achievable because we

had such a successful business. But we never foresaw an earthquake

changing that!”

...REBUILDING CANTERBURY HOSPITALITYM

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29

SALESANALYSIS

PHOTO: SIDART RESTAURANT, AUCKLAND

30

SALES GROWTH S

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S G

RO

WTH


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SALES GROWTH:NATIONAL

0

2

4

6

8

10

‘10-’11 ‘11-’12 ‘12-’13

3

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1.1

Perc

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With the world still affected by the global financial crisis, global economic activity is expected to remain subdued over the coming year. However, there have been some encouraging signs on a local level, with industry sales in 2012 reaching $6.9 billion (and projected to surpass $7 billion in 2013) and overall the industry’s outlook is optimistic.

The hospitality industry recorded a positive 6.7 per cent growth in national sales in 2012 over the year previous (an improvement on the 1.1 per cent growth from 2010-2011). The restaurant and cafe sector, which accounts for 50 per cent of the industry’s sales, enjoyed a 5.6 per cent increase in 2012. Takeaways reported a 9.1 per cent increase to reach almost $1.5 billion. Catering services also recorded a 9.2 per cent increase in sales while pubs, taverns and bars increased by 8.5 per cent.

2013

$7.19 billion

(projected)

HOSPITALITY INDUSTRY SALES AVERAGE OPERATING PROFIT

4.7%

1992

$1.78 billion

PROJECTED SALES GROWTH

2012 - 2013

3%

(projected)

SO

UR

CE

: Statistics N

ew Zealand &

Restaurant A

ssociation of NZ

31

SALES GROWTH S

ALE

S G

RO

WTH


SALES NATIONAL

$0

$1,000

$2,000

$3,000

$4,000

‘08 ‘09 ‘10 ‘11 ‘12

3252.6 3294 3318.6 3299.4 3485

$0

$1,000

$2,000

$3,000

$4,000

‘08 ‘09 ‘10 ‘11 ‘12

1192.4 1224 1321 1368.4 1492.3

$0

$1,000

$2,000

$3,000

$4,000

‘08 ‘09 ‘10 ‘11 ‘12

842.3 899.9 872 967.1 1048.9

PUBS, TAVERNS & BARS

$0

$1,000

$2,000

$3,000

$4,000

‘08 ‘09 ‘10 ‘11 ‘12

315.7 332.7 308.1 293.3 283.5

CLUBS (HOSPITALITY)

Real Growth Nominal Growth

RESTAURANTS & CAFES TAKEAWAYS FOODSERVICE

$0

$1,000

$2,000

$3,000

$4,000

‘08 ‘09 ‘10 ‘11 ‘12

489.9 529.7 646.2 612 668.4

CATERING SERVICES

nominal

real

SO

UR

CE

: Statistics N

ew Zealand &

Restaurant A

ssociation of NZ

0

1,500

3,000

4,500

6,000

7,500

2008 2009 2010 2011 2012 2013

6092.9 6280.3 6465.9 6540.26978.1 7187.4

6092.9 6183.8 6149.1 6144.46629.5 6649.2

$ M

illio

ns

SALES PER TYPE OF BUSINESS

TOTAL INDUSTRY SALES:REGIONAL

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

482406

877

560

876

372344475

2,586

496349

808

455

937

329273471

1,975

$ m

illio

n

2008 2012

(projected)

up 15.4%

TOP REGIONAL SALES PERFORMANCE IN 2012:

BAY OF PLENTY

32

SALES REVENUE S

ALE

S G

RO

WTH


$200,000

$300,000

$400,000

$500,000

$600,000

2008 2009 2010 2011 2012 2013

429592 435981452636 451142

479627 491077

429592 429280 430461 423840

455669 454318

National PER OUTLET average sales

$200,000

$300,000

$400,000

$500,000

$600,000

‘08 ‘09 ‘10 ‘11 ‘12

477621 473752 478667 466017491191

477621 466471 455216 437814466655

$100,000

$200,000

$300,000

$400,000

‘08 ‘09 ‘10 ‘11 ‘12

270202 273826290777 299300

322172

270202 269617 276531 281187306079

$200,000

$325,000

$450,000

$575,000

$700,000

‘08 ‘09 ‘10 ‘11 ‘12

504069540480 528165

590415643892

504069532173

502289554684

611728


$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

‘08 ‘09 ‘10 ‘11 ‘12

787282815441

753301696675 675238787282 802667

716395654513 641509

CLUBS (HOSPITALITY)


RESTAURANTS & CAFES TAKEAWAYS FOOD SERVICE

$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000

‘08 ‘09 ‘10 ‘11 ‘12

551689 582728

862750

778626

864683

551689 573772

820483731505

821490

CATERING SERVICES

nominal

real

SO

UR

CE

: Statistics N

ew Zealand &

Restaurant A

ssociation of NZ

-3-2-101234567

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13

2.4

6.3

-0.3

3.8

1.5

Perc

enta

ge c

hang

e

Sales revenue per establishment for the industry also reached record levels in 2012. Per outlet sales revenue was $479,627 in 2012, a 6.3% increase over the year previous, and is projected to reach $491,077 in 2013.

Over the past three years the catering services sector has consistently been the most productive sector in terms of sales revenue per outlet.


33

SALES REVENUE S

ALE

S G

RO

WTH


National PER EMPLOYEE average sales


$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

‘08 ‘09 ‘10 ‘11 ‘12

7410879403

75700 73142 71411

7410878183

7199168716 67844

CLUBS (HOSPITALITY)


CATERING SERVICES

nominal

real

SO

UR

CE

: Statistics N

ew Zealand &

Restaurant A

ssociation of NZ

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

2008 2009 2010 2011 2012 2013

58328

6280364369 64119

67428 68762

58328

61838 61216 60240

64060 63615

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

‘08 ‘09 ‘10 ‘11 ‘12

5290557764 59613

54790 57423

5290556876 56693

5147454554

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

‘08 ‘09 ‘10 ‘11 ‘12

5620559956 61490 60087 62838

5620559035 58478 56451

59699

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

‘08 ‘09 ‘10 ‘11 ‘12

6672671621

76491 7709381457

6672670520 72744 72427

77388

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

‘08 ‘09 ‘10 ‘11 ‘12

5541561595 60979

6829874285

5541560648

5799264165

70574

-3-2-101234567

‘08-’09 ‘09-‘10 ‘10- ‘11 ‘11-’12 ‘12-’13

2

5.2

-0.4

2.5

7.7

Perc

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National sales per employee in 2012 reached $67,428, a 5.2 per cent increase over the year previous and a 16 per cent increase in productivity over 5 years (2008 - 2012). In 2013 it is expected per employee sales will climb closer to $70,000, projected to reach $68,762.

Unsurprisingly the takeaway sector is the most productive in terms of sales per employee. In 2012 employee productivity for this sector reached $81,547.


34

HUMAN ECONOMICCAPITAL

PHOTO: ENTICE CAFE, MASTERTON

35

HUMAN ECONOMIC CAPITAL

Remuneration, Productivity & Labour Pool indicators

PH

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Although this 1.5 per cent increase is at a slower rate than those seen in the first half of this decade, it is more than three times the rate that the industry grew (in number of businesses) over the year. This trend is reflected in the growth of the catering sector, which recorded an impressive 4.2 per cent employee growth rate between 2011 - 2012. Also leading the trend was takeaway foodservices, with a 3.2 per cent increase.

The hospitality sector’s employment increases are well above national employment standards. By comparison employment across all of New Zealand decreased by 1.3 per cent from Dec 2011 – Dec 2012.

Looking ahead, the Ministry of Business, Innovation and Employment forecast that employment in New Zealand will increase gradually from 2013 – 2015; growing by 2.1 per cent (or 46,100) between 2013 and 2014, and by 1.6 per cent (or 36,000) between 2014 and 2015. However, this is well below the pre-recession employment growth rate of about 2.8 per cent per annum. The hospitality industry, along with accommodation and retail services, is expected to be one of the industries posting the highest annual employment growth through to 2015.

Overall employment is expected to increase by 82,100 in the two years between 2013 and 2015 year to March, which suggests a strong recovery in the labour market associated with the Canterbury rebuild. Auckland and Canterbury are expected to dominate national employment growth over this period.


HOSPITALITY INDUSTRY EMPLOYEE COUNT

2011 2012 2012 VS

2011

Cafes and Restaurants 54,910 55,460 1%

Takeaway food services 17,750 18,320 3%

Catering services 11,170 11,640 4%

Pubs, Taverns and Bars 14,160 14,120 0.3%

Clubs 4,010 3,970 1%

TOTAL 102,000 103,490 1.5%

The hospitality industry workforce grew by 1.5 per cent from 2011 – 2012.

TOTAL HOSPITALITY INDUSTRY EMPLOYMENT

2002 2012

59,700

103,490


The lack of skilled employees was rated as the second biggest challenge hospitality business operators faced in 2012. According the Ministry of Business, Innovation and Employment, the number of online job vacancies for one of those skilled positions in the industry, cafe managers, increased by 38.3 per cent from August 2011 to August 2012. This compares with an overall increase of 7.9 per cent for all skilled vacancies over the same period. Despite this, this position (along with restaurant and bar managers) will be removed from the Immigration New Zealand Short Term Skill Shortage list at the end of 2013.

A survey by the Restaurant Association of business owners in the hospitality industry produced some alarming results concerning the worsening skill shortages the industry is experiencing for key hospitality staff – in particular restaurant, café, bar manager roles.

The importance of finding the right candidates cannot be underestimated as staff in these roles act as the conduit between owners, staff and customers. The Association’s survey revealed that 66 per cent of businesses have advertised for a these management positions over the past year and an overwhelming 90 per cent indicate an unacceptable degree of difficulty in finding suitable candidates. Many indicate that while they receive applications there is a real shortage of appropriate candidates with the relevant skills and experience. Of concern is that the shortage appears to have worsened since 2010, when 83 per cent of respondents had the same view.

FINDING SKILLED WORKERS IS TOUGH

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How easy do you find it to recruit a restaurant manager?

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

2%

8%

39%

51%

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

“It would be nice if Immigration could walk in our shoes for a

day and see just how hard it is to find suitable Kiwis for these roles. They are out there but there are just not enough..”


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REGIONAL SPOTLIGHT:Auckland / Upper North Island

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

40%52%5%3%

Bay of Plenty / Waikato / Rotorua

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

48%39%9%4%

Central North Island / Taranaki

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

71%26%0%3%

Wellington


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%


...FINDING SKILLED WORKERS IS TOUGH

While the reported shortages are nationwide, Canterbury has been particularly hard hit, with many hospitality workers having left the region. Christchurch has lost a generation of hospitality workers and they are not going to be easily replaced.

Recent statistics released by online recruitment site, Seek, indicates new online job applications in Canterbury have jumped 17 per cent over the past year. Businesses finally reopening after the devastating earthquakes in 2010 and 2011 are now struggling to find any staff at all as one Christchurch operator comments:

“We have been advertising for staff for the past 6 weeks and to put it mildly it is almost impossible to find good key staff, in fact almost any staff with any experience at all. It was the case, prior to the earthquake, that a staff member with less experience could be taken on and ‘nursed’ by surrounding them with experienced staff. That can no longer happen as there are no experienced staff available.”

There is also some alarm over the number of employees departing New Zealand for the higher wages on offer overseas. In particular opportunities in Australia include higher hourly rates, penal rates, more tips and no requirements for a visa to work there. The Restaurant Association survey revealed the top reason given by people leaving management roles was to work overseas (61 per cent).

Also of concern is the 40 per cent leaving hospitality to work in another industry. Many operators reiterated this concern, as well as suggesting that other pressures, including poaching quality staff, have added to recruitment difficulties.

The overwhelming call from business owners is that these roles remain on the immediate skills shortage list, to help keep hospitality businesses thriving in New Zealand.

An Auckland restaurateur sums this up:

“Our industry is lacking skilled staff in this area. As the industry continues to grow larger the shortage is becoming greater.

It would be a huge blow to the hospitality industry and the country as a whole if we put more barriers in place to employing the skilled staff we need. If anything we should be making it easier to attract key staff to our shores who can pass on their knowledge.”

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BUSINESS OWNERS ARE INVESTING IN

THE EXISTING LABOUR POOL

Emphasising business owners’ willingness to develop and promote staff from within the business, 81 per cent of Restaurant Association survey participants have formal in-house training programmes in place to promote this opportunity. 70 per cent also use professional mentoring or coaching, while 31 per cent utilise external professional development or training courses for their staff.

As one industry professional comments: “We have always found these roles to be one of the most notorious to recruit for. In response to that, we have taken the training and development of our staff very seriously, and have two separate management training programs that operate throughout the year to train our staff on the key factors of managing a hospitality business. Even with this training we still find it difficult to fill the role of Bar & Restaurant Manager as often staff are not ready to step into these roles when required, or, after investing in training with them, they leave.”

Businesses are also incentivising key staff to stay by offering additional employment benefits like meal/dining discounts (84 per cent), bonus incentive schemes (38 per cent), tips (65 per cent) and additional leave (10 per cent).

0% 30% 60% 90%

31%

69%

81%In-house training

Mentoring / coaching

External professional

development / training

How do you assist to develop an employee’s skills to move into management level?

NB: respondents were able to choose more than one option


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THE HOSPITALITY PROFESSIONALanalysis of the ‘hospitality personality’, key traits and job satisfaction

These are some of the questions that the Restaurant Association set out to answer, with the help of Dr Lawrence Powell at Auckland University, and Lindsay Neill at AUT. Here is a snapshot of the analysis of two online surveys conducted in November 2012 and February 2013. What we've discovered so far about 'the New Zealand hospitality personality' is intriguing...

Gender differencesFirst of all, some very interesting differences exist between how women and men approach their work experience in the hospitality industry. In the two surveys, respondents were asked how 'satisfied' they are with their jobs generally, and also broke that down into 15 different aspects of the work experience, asking respondents how they feel about each of those aspects, considered separately.

Overall, it's clear that Association members are quite positive about the work that they do. 59% report being “very satisfied” with their current job. When evaluating the quality of services offered to customers / clients by their business, 46% rate it as “superior”, and another 14% are willing to rate their business “best in its field.” With regard to the financial success of the business where they work, 45% judge themselves “moderately successful,” another 36% say they are “very successful,” and 4.5% rate their business “extremely successful.”

When you focus in more closely, and compare how women and men within the industry feel about their work experiences, some dramatic patterns begin to emerge. As you can see from the graph, top right, men are generally more satisfied with their hospitality work experience than are women in the industry. This holds for overall job satisfaction, as well as for 11 of the 15 separate facets of work experience.

In particular, men are much more satisfied than women with how their skills and expertise are being used, with the quality of employee relations, with performance and evaluation standards, and with how interesting and meaningful their work is.

However there are some interesting exceptions to that. Women seem much more satisfied than men with their opportunities for growth, pay rises and promotion. They are also slightly happier with the degree of recognition and praise received for their contributions.

Females Males

Overall satisfaction

Interesting, meaningful

How skills used

Employee relations

Customer relations

Growth opportunities

Work difficulty

Employee care

Job security

Salary level

Pay rises promotion

Performance standards

Evaluation fair

Employee inclusion

Recognition, praise

Teamwork

0 10 20 30 40 50 60 70

% very satisfied

• How satisfied are people in the industry with various aspects of their work?

• Do women and men within the profession approach their work differently?

• What are some of the 'desirable traits' of managers and employees that tend to be associated with job satisfaction and positive outcomes within the industry?

• Is there a discernible 'optimal hospitality personality'?

JOB SATISFACTION by gender


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and hospitality workWe also took a look at basic human psychosocial needs, and how those needs interact with hospitality work in the New Zealand context. In addition to the previously listed ‘job satisfaction’ measures, the purpose of this set of measures was to get a sense – grounded in well-established theories of ‘basic human social needs’ in anthropology, clinical and social psychology – of the extent to which Restaurant Association members feel that their needs are being met within their lives, and work.

On the questionnaire, five 'need ladders' were used to roughly approximate the basic human 'existence', 'relatedness', and 'growth' needs described by 'actualisation-of-human-potential' psychologists like Maslow and Alderfer. The ’need-ladder’ question wordings for the five ‘psychosocial need-satisfaction’ items were as follows, with respondents asked to rate their “present life circumstances” on these ladders...

PHYSICAL HEALTH FINANCIAL SECURITY

10 - Feel completely 10 - Feel completely

9 secure about the 9 secure about being

8 state of my health 8 able to afford basic

7 7 necessities

6 6

5 5

4 4

3 3

2 2 Worry constantly about

1 Often feel worried 1 being able to provide

0 - about my health 0 - basic necessities

RELATIONSHIPS RESPECT, ESTEEM

CREATIVE GROWTH

10 - A life full of 10 - Complete 10 - Satisfied that

9 love, warm 9 recognition & 9 I’m realising

8 friendships & 8 respect from 8 my fullest

7 good family 7 others 7 potential in

6 relations 6 6 life

5 5 5

4 4 4 Just about given

3 3 3 up hope I’ll ever

2 A life without 2 Completely 2 get to do anything

1 love, friends, 1 ignored by 1 important or

0 - and warmth 0 - others 0 - worthwhile

As you can see from the line graph above right, the relationship between satisfaction with one's hospitality work and personal need-fulfillment is strong.

For 'physical health', 'financial security', and 'creative growth' needs, it's quite clear that higher need-fulfillment and higher job satisfaction go together. However with the other two needs, 'good relationships' and a sense of 'respect and esteem', it doesn't seem to make nearly as much difference – i.e., their fulfillment is apparently more independent of one's work experience.

Personality traits in hospitality workWe also asked our respondents to self-rate their personality traits, so we could see how these might impact on hospitality work in New Zealand. Over the past several decades, psychologists have been able to successfully isolate five key dimensions within the normal human personality, that have been shown to consistently appear in varying degrees in all human cultures. In an elaborate sifting process that involved testing many possible human personality attributes, over time, in over 100 different cultural settings, cross-cultural researchers have now been able to narrow the field to just a few reliable, highly-discriminative 'universal human trait descriptions' that effectively summarise the normal human personality. These “big five” dimensions can be briefly summarized as:

I. Agreeableness – the extent to which a person is more Agreeable (“good-natured”, “agreeable”, “forgiving”) than Antagonistic (“critical”, “quarrelsome”, “irritable”).

2

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Physical healthFinancial securityGood relationshipsRespect & self esteemCreative growth

...THE HOSPITALITY PROFESSIONAL

PSYCHOSOCIAL NEEDS FULFILLMENT: by job satisfaction

Very Somewhat Somewhat Very dissatisfied dissatisfied satisfied satisfied

JOB SATISFACTION LEVEL


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“reliable”, “well-organized”) versus Negligent (“disorganized”, “unreliable”, “careless”).III. Extraversion - Extraverted (“sociable”, “talkative”, “extraverted”) versus Introverted (“reserved”, “quiet”, “introverted”).IV. Emotional Stability - Emotionally Stable (“calm”, “emotionally secure”, “at ease”) versus Neurotic (“anxious”, “easily upset”, “worrying”).V. Openness - Open to Experience (“creative”, “imaginative”, “open to new experiences”) versus Closed to Experience (“conventional”, “down-to-earth”, “prefer the familiar”).

This refined, five-factor measurement instrument is often referred to as the NEO Personality Inventory, or NEO-PI. Since the full NEO-PI contains a large number of items, and would have been impractical for use in this survey of hospitality professionals, an abbreviated version which captures the essence of those personality factors in just 10 survey questions (2 for each dimension), was used.

As can be seen in the bar graph above, New Zealand hospitality workers who reported high job satisfaction also had substantially higher scores (in what would normally be considered a 'positive' direction), on all five of these basic personality dimensions. Thus satisfied hospitality workers tend to be more agreeable as opposed disagreeable, more conscientious as opposed to negligent, more extraverted as opposed introverted, more emotionally stable as opposed to neurotic, and more open-to-experience as opposed to closed. Of these, the three dimensions that most clearly distinguish between satisfied and less satisfied workers are agreeableness, emotional stability, and openness.

In addition to these five personality dimensions, we also asked respondents to rate themselves on a series of adjectives that are typically used by social psychologists to measure self-concept, or self-esteem. The two main dimensions of self concept that we looked at were 'mastery self-concept' (“I see myself as...strong”, “aggressive”, “powerful”, “competent”, “ambitious”, “confident”) and 'prosocial self-concept' (“I see myself as...good”, “kind”, “compassionate”, “cooperative”, “generous”, “sympathetic”). As the bar graph shows, those who are highly satisfied with their hospitality work also tend to have higher scores on both the mastery and prosocial self-concept scales – though the relationship seems much more pronounced for mastery, and particularly for a sense of one's 'competence'.

0

10

20

30

40

50

% a

gre

eing

“tr

ait

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me

wel

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Persons with high job satisfactionPersons with lower job satisfaction

0

10

20

30

40

50

60

% a

gre

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“tr

ait

fits

me

wel

l”

Persons with high job satisfactionPersons with lower job satisfaction

...THE HOSPITALITY PROFESSIONAL

JOB SATISFACTION by “BIG 5” dimensions of the human personality

Agreeable Conscientious Extravert Emotionally Open to stable experience

JOB SATISFACTIONby mastery/prosocial self-concept

Power Competence Goodness Generosity(mastery) (mastery) (prosocial) (prosocial)

40

41

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REMUNERATION DATAAverage HOURLY WAGE Growth: 2008 - 2012

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

-10 -5 0 5 10 15 20 25 30Percentage Change

Posi

tion

Nominal Change Real Change

For many hospitality operators wages appear to be under tight control until business conditions further improve.

The average hourly rate across all hospitality positions in 2012 was $15.90, unfortunately 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.

When analysing remuneration trends in the hospitality industry over a five year period (2008 – 2012), average hourly rates increased by between 1.2% (head chef position) to 31.7% (food to go position).

Of note, although the head chef position had a minimal increase of 1.2 per cent over that period, executive chefs saw their hourly remuneration increase by 19.6 per cent. The only position to record a decrease over this period was function manager (-1.1 per cent).

The real growth, adjusted for inflation, indicates that 30 of the 36 positions surveyed had wage growth. This growth ranged from 0.9 per cent (housekeeper) up to 20.8 per cent for security/door staff. The six positions that remained static over this period were cashier, front office, function manager, head chef, host/hostess and pastry chef.

SO

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1 Labour costs rank as the number one challenge facing hospitality operators. In 2012 61 per cent said this was their top challenge.

42

RE

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REMUNERATION DATAAverage SALARY Growth: 2008 - 2012

Bar Manager

Bar Person

Barista

Breakfast Chef

Cafe Assistant

Café Manager

Chef de Partie

Commis Chef

Counter Cook

Duty Manager

Executive Chef

F & B Manager

Front Office

Function Manager

Head Chef

Head Waiter Maitre D

Host/Hostess

Owner / Operator

Pastry Chef

Restaurant Manager

Senior Cook

Sous Chef

Wait Staff

-50 -40 -30 -20 -10 0 10 20 30 40 50Percentage Change

Posi

tion

Nominal Growth Real Growth


SO

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The average salary for a worker in New Zealand is $53,000 a year before tax. This is close to the typical take home salary of a hospitality owner/operator in 2012 who earns, on average, $52,304. While the average wage in New Zealand increased 22 per cent from 2008 – 2012, for owners of hospitality businesses that increase was a more subdued 11 per cent.

Some positions in the industry, however, recorded significant salary growth over five years – particularly bar staff and wait staff who, in some cases, doubled their earnings over the period. Wait staff salary rates jumped 20 per cent over the past year. Baristas also saw their salary increase from $20,320 in 2008, to $32,529 in 2012.

Analysis of the real salary growth over 2008 – 2012, adjusted for inflation, shows that for 13 out of the 36 positions surveyed their salary decreased. Several key positions recorded decreases, including executive chefs (down 1.1 per cent), head chefs (down 4.7 per cent), sous chefs (down 13.1 per cent) and restaurant managers (down 12.2 per cent). Conversely a chef de partie was 26.1 per cent better off in 2012 and commis chefs also recorded a positive 19.3 per cent increase.

As labour is one of the largest costs to our businesses (and ranks as our biggest challenge), operators are wise to keep remuneration levels in check when faced with escalating rises in food and other costs.

43

2008 20092009 20102010 20112011 20122012 2012

Rate Rate % change '08-'09

Rate % change '09-'10

Rate % change ‘10-’11

Rate % change ’11-’12

Annual Salary

Remuneration

Bar Manager $15.84 $17.90 13.0% $17.50 -2.2% $19.33 10.0% $18.57 -4.0% $50,632

Bar Person $13.35 $13.95 4.5% $14.43 3.4% $14.74 2.0% $15.04$

2.0% $30,844

Barista $14.32 $14.88 3.9% $14.57 -2.1% $15.37 5.0% $15.58$

1.0% $32,529

Breakfast Chef $15.58 $15.93 2.2% $16.20 1.7% $16.75 3.0% $16.75 0% $29,500

Café Assistant $12.60 $13.53 7.4% $13.83 2.2% $14.40 4.0% $14.43 0% $33,000

Café Manager $16.55 $17.72 7.1% $18.33 3.4% $18.59 1.0% $18.03 -3.0% $47,762

Cashier $17.47 $16.61 -4.9% $15.10 -9.1% $15.82 5.0% $17.95 13.0% ~

Chef de Partie $16.06 $16.89 5.2% $16.60 -1.7% $17.11 3.0% $17.50 2.0% $36,846

Cleaner $13.09 $14.07 7.5% $14.40 2.3% $15.00 4.0% $15.14 1.0% ~

Commis Chef $14.68 $15.11 2.9% $15.33 1.5% $15.29 -0.2% $15.92 4.0% $41,000

Counter Cook* $14.10 $15.96 13.2% $14.82 -7.1% $15.41 0.4% $15.54 1.0% $31,000

DJ $36.27 $46.69 28.7% $41.72 -10.6% $33.17 -20.0% $49.58 49.0% ~

Duty Manager $15.78 $16.47 4.4% $16.29 -1.1% $16.96 4.0% $16.90 0% $36,077

Executive Chef $22.88 $26.54 16.0% $27.08 2.0% $26.43 -2.0% $27.36 4.0% $65,400

F & B Manager $19.62 $20.82 6.1% $20.97 0.7% $18.41 -12.0% $22.41 22.0% $57,143

Food to GoAssistant $12.61 $14.49 14.9% $14.36 -0.9% $13.74 -4.0% $13.61 -1.0% $27,000

Front Office $15.63 $14.87 -4.9% $16.03 7.8% $15.68 -2.0% $16.14 3.0% $35,695

Function Manager $19.79 $18.41 -7.0% $19.65 6.7% $18.57 -5.0% $19.57 5.0% $47,375

Head Chef $20.42 $21.84 7.0% $21.67 -0.8% $21.17 -2.0% $20.66 -2.0% $52,722

Head Waiter Maitre D $15.89 $16.59 4.4% $16.91 1.9% $17.38 3.0% $17.44 0% $38,529

Host/Hostess $15.04 $15.87 5.5% $15.02 -5.4% $16.37 9.0% $15.36 -6.0% $32,333

Housekeeper $14.01 $14.82 5.8% $15.10 1.9% $15.71 4.0% $14.87 -5.0% $40,083

Junior Cook* $13.03 $14.30 9.7% $14.50 1.4% $14.90 3.0% $14.97 1.0% $30,200

Kitchen Hand $12.40 $13.00 4.8% $13.35 2.7% $13.73 3.0% $14.12 3.0% $38,529

Office Manager $18.80 $20.05 6.6% $20.83 3.9% $21.03 1.0% $20.90 -1.0% $45,000

Owner / Operator $21.77 $26.04 19.6% $21.24 -18.4% $23.95 13.0% $52,304

Pastry Chef $17.02 $17.40 2.2% $17.56 0.9% $17.36 -1.1% $17.87 3.0% $42,400

Restaurant Manager $17.55 $19.40 10.5% $18.19 -6.2% $19.31 6.2% $19.33 0% $48,273

Room Attendant $13.01 $13.45 3.4% $13.59 1.0% $14.02 3.2% $14.52 4.0% $23,000

Security/Door Staff $16.33 $18.61 14.0% $19.19 3.1% $18.31 -5.0% $20.77 13.0% ~

Senior Cook* $16.51 $16.85 2.1% $16.59 -1.5% $17.07 3.0% $17.86 5.0% $39,941

Sole Kitchen Operator* (Quals) $14.85 $16.25 9.4% $16.20 -0.3% $15.99 -1.3% $16.47 3.0% $38,750

Sous Chef $17.32 $18.72 8.1% $18.94 1.2% $19.31 2.0% $18.63 -4.0% $41,818$25,500Student / Apprentice $11.41 $13.25 16.1% $13.44 1.4% $13.61 1.3% $13.59 0% $25,500

Wait Staff $13.00 $13.94 7.2% $14.15 1.5% $14.31 1.1% $14.50 1.0% $29,588

Wine Waiter $14.55 $15.52 6.7% $15.04 -3.1% $15.24 1.3% $16.46 8.0% $34,000

REMUNERATION DATAAverage HOURLY and SALARY Remuneration by Position: 2008-2012

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* No Qualifications Source: Restaurant Association of New Zealand


44

WELLINGTON

AUCKLAND

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

3625034270325703203033730

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

1326012990130301265012840

RE

GIO

NA

L FI

GU

RES

: EM

PLO

YMEN

T

-10

-5

0

5

10

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

5.85.2

1.7

-5.0

Perc

enta

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hang

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-10

-5

0

5

10

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

2.1

-0.3

3.0

-1.5

Perc

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HOSPITALITY EMPLOYMENT GROWTHNATIONAL: 2008-2013


National Figures National Annual Employment Growth

30,00040,00050,00060,00070,00080,00090,000

100,000110,000

2008 2009 2010 2011 2012 2013

104525103490102000100450100000104460

Tota

l Em

ploy

ed P

erso

ns

-10

-5

0

5

10

‘08-‘09 ‘09-‘10 ‘10-‘11 ‘11-’12 ‘12-’13

11.51.50.5

-4.3Perc

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SOURCE: STATISTICS NEW ZEALAND & RESTAURANT ASSOCIATION

REGIONAL: 2008-2012

WAIKATO

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

85808650835089509400

-10

-5

0

5

10

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

-0.8

3.6

-6.7-4.8

Perc

enta

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BAY OF PLENTY

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

59305810573057006170

-10

-5

0

5

10

‘08-‘09 ‘09-‘10 ‘10-‘11 ‘11-’12

2.11.40.5

-7.6Perc

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national comparison

45

MANAWATU-WANGANUI

REST OF NORTH ISLAND

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

92409110943093509910

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

46104730478047104840

RE

GIO

NA

L FI

GU

RES

: EM

PLO

YMEN

T

-10

-5

0

5

10

15

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

-2.5-1

1.5

-2.7

Perc

enta

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-10

-5

0

5

10

15

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

1.4

-3.4

0.9

-5.7Perc

enta

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CANTERBURY

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

1272013460136001369014050

-10

-5

0

5

10

15

‘08-’09 ‘09-‘10 ‘10-‘11 ‘11-’12

-5.5

-1-0.7-2.6

Perc

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REST OF SOUTH ISLAND

OTAGO

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

65306660692067807000

05000

10000150002000025000300003500040000

‘08 ‘09 ‘10 ‘11 ‘12

63606310606061406530

-10

-5

0

5

10

15

‘08-‘09 ‘09-‘10 ‘10-‘11 ‘11-’12

0.84.1

-1.3

-6Perc

enta

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-10

-5

0

5

10

15

‘08-‘09 ‘09-‘10 ‘10-‘11 ‘11-’12

-2-3.8

2.1

-3.1

Perc

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HOSPITALITY EMPLOYMENT GROWTHNATIONAL: 2008-2012

SO

UR

CE

: Statistics N

ew Zealand

46

This snapshot above indicates nationally, the average number of employees within the different sectors of the food industry. A comparison between 2008 and 2012 staffing levels is given.

For all sectors (2008/2012), the average number of employees has reduced slightly, except catering services.

Catering services noted a 45 percent increase of staff per outlet during this period. This has been driven in large part by a decline in the number of catering outlets, which have decreased from 888 in 2008, to 773 in 2012. Employee numbers continued to increase however for catering services.

Measuring 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.

Therefore the aim of this information is to guide restaurateurs towards goals and targets in the operation of their business that are based on national and regional averages. These averages serve as guides only.

This section suggests that more consideration may be required before employing or retrenching staff in order to ensure sales reflect an appropriate return on investment for each employee hired.

AVERAGE EMPLOYEES PER OUTLET: NATIONAL FIGURES

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.4

6.9 7.0 7.0 7.1

EMPLOYEE PRODUCTIVITY

The line graph (below) notes that the average number of employees per hospitality business is 7. This number decreased from 2008 to 2009 but has since been slowly rising. This figure is also shown in the regional analysis following on the following pages.

While this figure alone does not take into consideration things like the cover numbers or thesize and style of the operation it offers some benchmark data for individuals to us as a start point.

This report notes productivity in financial terms. To achieve this the authors divided turnover by the (average) number of employees. National average annual sales per outlet in 2012 was $479,627, with an average of 7 employees needed to achieve this. (Readers can modify this calculation to suit specific operations.)

Throughout the regional sections on the pages following, the national average line will be indicated (in watermark) for quick comparison.

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

0

4

8

12

16

20

2008 2012

9.510.68.79.1

15.1

10.4

447.88.5

EMPLOYEES BY OUTLET TYPE

STAFFING LEVELS

Source: Restaurant Association of New Zealand, Statistics New Zealand

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47

NAT

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CTI

VITY

RESTAURANTS, CAFES & COFFEE HOUSES

$40,000$50,000$60,000$70,000$80,000$90,000

‘08 ‘09 ‘10 ‘11 ‘12

56205 59956 61490 60087 62838

56205 59035 58478 56451 59699

$40,000$50,000$60,000$70,000$80,000$90,000

‘08 ‘09 ‘10 ‘11 ‘12

6672671621

76491 77093 81457

66726 70520 72744 7242777388

TAKEAWAY SERVICES

$40,000$50,000$60,000$70,000$80,000$90,000

‘08 ‘09 ‘10 ‘11 ‘12

5290557764 59613

54790 57423

52905 56876 5669351474 54554

CATERING SERVICES

$40,000$50,000$60,000$70,000$80,000$90,000

‘08 ‘09 ‘10 ‘11 ‘12

5541561595 60979

6829874285

5541560648 57992

6416570574


The sales per pay-roll employee graph, shown right, indicates the total sales burden per employee (irrespective of position).

The figures shown include nominal values (black font at top of the graph) and real values (white font under the blue line).

The blue line is currency adjusted, allowing for better year to year comparison.This has further been broken down for outlet specific guides, located in the bottom half of this page.

From a position of staff productivity, 2012 realised higher than ever (per) staff member sales performance in both nominal and real terms.

Of note, from 2008 - 2009 there was a notable decrease in the number of employees per outlet (of -6.8%), with a corresponding increase in sales per employee of 7.7%. In more recent years however sales per employee growth has been more muted, until 2012. An increase in the number of employees per outlet of 1.4% saw an increase in sales per employee of 5.2% in 2011 - 2012.

Labour costs continue to be challenging for business owners who list this as their main concern in 2013. It is expected that as a result there will be a focus on managing their businesses more efficiently, with less labour force, until more buoyant times return.

-10-8-6-4-202468

10

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

5.2

-0.4

2.5

7.7

1.40

1.4

-6.8

Perc

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Employees per Outlet Sales Per Employee

GROWTH IN EMPLOYEES PER OUTLET VS SALES PER EMPLOYEE

$35,000$40,000$45,000$50,000$55,000$60,000$65,000$70,000

‘08 ‘09 ‘10 ‘11 ‘12 ‘13

5832862803 64369 64119

67428 68762

5832861838 61216 60240

64060 63615

Real Nominal

SALES PER PAY-ROLLED EMPLOYEE - NATIONAL AVERAGESALES PRODUCTIVITY

Source:R

estaurant Association of N

ew Zealand, S

tatistics New

Zealand

SALES PER PAY-ROLLED EMPLOYEE - BY OUTLET


Analysis of the different sectors in the hospitality industry shows some variance in “productivity” - based on average sales per employee. Over the five years (2008 - 2012), sales per employee for restaurants, cafes and coffee houses have remained relatively stable. When offset against inflation, this sector’s sales have remained under the $60,000 per employee level. This sector, along with catering services, have not seen the steady increase in productivity that takeaway services and pubs, taverns and bars have experienced. Takeaway services remain the most productive sector of the hospitality industry. In 2012, the average sales per employee in this sector reached $81,457 in real terms. By contrast, the catering sector is the least productive sector, with sales per employee in 2012 sitting at just $57,423. This sector had a large increase in the number employees per outlet from 2008-2012, but only a 36% increase in industry sales over this period.

nominal

real

nominal

real

(projected)

48

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WAIKATO

AUCKLAND

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

6.85

6.37 6.5 6.546.75

$35,000

$50,000

$65,000

$80,000

‘08 ‘09 ‘10 ‘11 ‘12

58562

64877 67117 6743271327

5856263880 63829 63351

67764

Real Nominal

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.47.02

6.79 6.836.62

$35,000

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

‘08 ‘09 ‘10 ‘11 ‘12

50128 51542

59054

5169955350

50128 50750

56161

4857052585

Real Nominal

-12

-8

-4

0

4

8

12

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-12

5.8

0.53.5

10.8

3.20.6

2

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Employees per Outlet Sales per Employee

-15

-10

-5

0

5

10

15

‘08-‘09 ‘09-’10 ‘10-11 ‘11-’12

7.1

-12.5

14.6

2.8

-3.1

0.6

-3.3-5.1

Perc

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SALES PRODUCTIVITYSales per employeeAverage Employees per outlet

Average Employees per outlet Sales per employee

Growth in Employees per outlet Vs. Sales per employee


With 37% of the hospitality industry’s sales occurring in the Auckland region, this territory also has one of the most productive workforces. In 2012, the average number of employees per outlet was 6.75, the second lowest in the country after the Waikato region (6.62). The average sales per employee, at $71,327, is 5.8% higher than the national average. Of note is the 7% drop in employees per outlet in 2009, which realised a 10.8% increase in sales per employee. Over this same period sales for the Auckland region increased 5.2%. Another 18.3% increase in sales from 2010-2012, matched by only a slight increase in the number of employees, means that Auckland experienced growth in sales per employee by another 6.3%.

While the Waikato region has experienced an increase in sales per employee over the last five years of 10.4%, it is still comparatively the least productive region in the country. With average sales of $53,555 per employee over the last five years, this is 18.4% below the national average.

The region reached a peak in sales per employee in 2010, followed disappointingly with a 12.5% drop in 2011. This was impacted by a 9.3% reduction in industry sales for the Waikato region for the period 2010-2011. The outlook going forward is improving, however, with a 7.1% increase in sales per employee to $55,350 in 2012.

nominal

real

Source:R


ew Zealand, S

tatistics New

Zealand

49

BAY OF PLENTY

MANAWATU/WANGANUI

$35,000

$45,000

$55,000

$65,000

$75,000

$85,000

‘08 ‘09 ‘10 ‘11 ‘12

67913

76497 78933 81290 80651

67913

75321 75066 76370 76622

Real Nominal

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.13

6.716.98 6.96

6.79

$35,000$40,000$45,000$50,000$55,000$60,000$65,000$70,000

‘08 ‘09 ‘10 ‘11 ‘12

44263 44877

52949 51360

58078

44263 44187

5035548268

55161

Real Nominal

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.71

7.16 7.28 7.28 7.18

-12

-4

4

12

20

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

13

-3

18

1.4

-1.4

01.7

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-12

-4

4

12

20

‘08-‘09 ‘09-’10 ‘10-11 ‘11-’12

-0.8

33.2

12.6

-2.4-0.3

4

-5.9Perc

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RE

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NA

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RE

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TIVI

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SALES PRODUCTIVITY

Average Employees per outlet


Sales per employee



Until 2011, the Bay of Plenty region was the least productive region in the country and had the lowest sales revenue per employee in the country. This is regardless of the fact that between 2009 and 2010 the region recorded the highest relative increase in sales per employee at 18%; a minimal increase in the number of employees, a decrease in the number of outlets and a significant 19% increase in industry sales. However, in the last year the region’s sales per employee increased by 13.0% to $58,061 and, therefore, has overtaken the Waikato region.

A reduction in the average number of employees per outlet (which is currently 7.18), has assisted the region to grow employee productivity.

With a sales per employee figure in 2012 that was 19.6% higher than the national average, this region has the most productive workforce in the country.

Although the region’s sales per employee dropped slightly by 0.8% in the last year in nominal terms, going from $81,290 in 2011 to $80,651 in 2012, it is still the fastest growing region in the country in terms of sales revenue per employee. Growth over this period (2008 - 2012) was 18.8%.

The region also benefits from a relatively high average spend per capita - in 2012 this reached $1,599.

Source:R


ew Zealand, S

tatistics New

Zealand

50

REST OF THE NORTH ISLAND

$35,000$40,000$45,000$50,000$55,000$60,000$65,000$70,000

‘08 ‘09 ‘10 ‘11 ‘12

45893

5333757370

54566

60606

45893

5251754559

51264

57579

Real Nominal

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.44

6.95 7.076.85 6.89

WELLINGTON

5.05.56.06.57.07.58.08.5

‘08 ‘09 ‘10 ‘11 ‘12

8.037.74

7.94 8.02 8.05

$35,000

$50,000

$65,000

$80,000

‘08 ‘09 ‘10 ‘11 ‘12

72967 74704

66032 64719 6609472967 73556

62797 60802 62793

Real Nominal

-15

-10

-5

0

5

10

15

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

2.1

-2

-11.6

2.40.41

2.6

-3.6

Perc

enta

ge C

hang

e


-12-8-4048

121620

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

11.1

-4.9

7.6

16.2

0.6

-3.1

1.7

-6.6Perc

enta

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hang

e


The Wellington region’s percentage market share is significant because 12.5% of the industry’s sales are from this region. However, Wellington has been subjected to a difficult three years, with a decrease in sales per employee of 13.4% from 2009-2011 and only a slight increase of 2.1% in 2012.

This drop in sales per employee has had an inverse relationship with the average employees per outlet which has been increasing gradually since 2009 to 8.05 - the highest in the country.

A reduction in the number of employees would assist the region to return to the levels of productivity it had enjoyed in the early to mid 2000’s.

Although still one of the lower performing regions in New Zealand, the “rest of the North Island” has made some significant gains in employee productivity in the last 5 years of 32.1%. Following a decline in 2011, employee productivity then reached a 5 year high in 2012 with sales per employee hitting $60,606.

These gains have been assisted by a steady decline in the average number of employees per outlet over this period, which diminished from a 7.4 peak in 2008, to 6.9 in 2012.

RE

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SALES PRODUCTIVITY

Sales per employeeAverage Employees per outlet

Average Employees per outletSales per employee



Source:R


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51

CANTERBURY

REST OF THE SOUTH ISLAND

$35,000

$45,000

$55,000

$65,000

$75,000

‘08 ‘09 ‘10 ‘11 ‘12

70814

63378 61142 63228

73783

70814

6240458147 59402

70097

Real Nominal

5.05.56.06.57.07.58.08.5

‘08 ‘09 ‘10 ‘11 ‘12

8.167.76

8.117.81

7.61

$35,000

$45,000

$55,000

$65,000

$75,000

‘08 ‘09 ‘10 ‘11 ‘12

57502

64850 66669 68158 68970

57502

63853 63403 64033 65525

Real Nominal

5.0

5.5

6.0

6.5

7.0

7.5

8.0

‘08 ‘09 ‘10 ‘11 ‘12

7.437.21 7.12 7.21

7.56

-12-8-4048

121620

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

1.22.22.8

12.8

4.91.3

-1.2-3

Perc

enta

ge C

hang

e


-18-12-606

1218

‘08-‘09 ‘09-’10 ‘10-11 ‘11-’12

16.7

3.4

-3.5

-10.5

-2.6-3.7

4.5

-4.9

Perc

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Despite the devastating upheavals experienced by the Canterbury region from the end of 2010 onwards, the region has recorded a steady increase in sales per employee over the past 5 years, increasing 19.9% from $57,502 to $68,970. This figure surpasses the national average by 2.3%. In terms of market share Canterbury is exactly the same as Wellington (12.5%).

The decline in the labour force as a result of the region’s earthquakes has not affected the average employee numbers per outlet, which has been on the increase since 2010. Rising to 7.56 employees in 2012, the Canterbury figure is currently 6.5% higher than the national average.

Although the “rest of the South Island” struggled in 2009 and 2010 with a 13.7% decrease in productivity over these years relative to 2008, staff productivity increased by 3.4% in 2011 and further increased 16.7% in 2012 to reach a 5 year high of $73,783 - 9.4% higher than the national average.

This rise has been inversely correlated to a drop in average employees per outlet over these two years of 6.2% - from 8.11 to 7.61.

RE

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NA

L FI

GU

RE

S: E

MPL

OYE

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OD

UC

TIVI

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SALES PRODUCTIVITY

Average Employees per outlet


Sales per employee



Source:R


ew Zealand, S

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Zealand

52

OTAGO

$35,000

$45,000

$55,000

$65,000

$75,000

‘08 ‘09 ‘10 ‘11 ‘12

5349259235

6186567021

63821

5349258325 58834

6296560633

Real Nominal

5.05.56.06.57.07.58.08.5

‘08 ‘09 ‘10 ‘11 ‘12

7.89

7.22 7.257.48 7.51

-12

-8

-4

0

4

8

12

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

-4.8

8.3

4.4

10.7

0.43.2

0.4

-8.5

Perc

enta

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e


In 2011, when many regions in New Zealand suffered from a decline in industry sales, the Otago region experienced growth of 12.8%.This assisted the area to reach its peak level of per employee productivity of $67,021 in 2011, 4.5% above the national average. However, in the last year productivity in the region decreased by 4.8% and is now, $63,821, 5.3% lower than the national average.

Of note, the region has the highest average per capita hospitality spend ($1,921 in 2012). However, with an increasing above average number of employees per outlet, at 7.51, staffing levels will need to be closely monitored and maintained in coming years to ensure growth in sales per employee increases again.

RE

GIO

NA

L FI

GU

RE

S: E

MPL

OYE

E PR

OD

UC

TIVI

TY


SALES PRODUCTIVITY



Source:R


ew Zealand, S

tatistics New

Zealand

51

CONSUMER INSIGHTS

PHOTO: O’CONNELL ST BISTRO, AUCKLAND

54

CONSUMER INSIGHTS C

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ESS

QUALITY OVER QUANTITYResearch conducted in a series of consumer surveys by American Express indicates that 56 per cent of New Zealanders still dine out at least once a month despite the challenging economic conditions.

The third of these annual surveys conducted at the end of 2012 shows that ninety-three per cent of people still enjoy dining out but frequency has declined slightly; in particular the number of people dining out once a week has dropped by 10 per cent compared to the year previous (from 23 per cent in 2011 to 13 per cent in 2012).

Wellingtonians dine out more frequently - 27 per cent claim to eat out at least once a week, followed by Aucklanders (22 per cent).

While 55 per cent of consumers say they have not curbed their dining habits, 30 per cent are eating out less frequently and a further twelve per cent are eating at less expensive places. Essentially people are choosing restaurants and dining venues that are right for their current situation but there is still an emphasis on quality food - this came out as the key consideration for consumers when eating out.

When making decisions about where to eat, the key factors for consumers are:

• Quality food (50 per cent say the quality of the food is very important);

• Affordable menu (45 per cent);• Excellent service (39 per cent);• Good atmosphere(32 per cent); and• Convenient location (25 per cent).

Diners from the central North Island (Hawke’s Bay, Taranaki, Manawatu and Wanganui) are frequenting restaurants less often (38 per cent compared to the national average of 56 per cent), however, their expectations tend to be higher. There was a strong emphasis on customer service in these regions – 51 per cent of respondents saying excellent customer service was very important (12 per cent higher than the national average).

Bucking the national trend, price was the key factor for central North Island diners as 62 per cent of respondents said an affordable menu was very important (17 per cent higher than the national average).

Serving quality food that diners enjoy eating and providing great customer service is of the utmost importance, so restaurant operators need to continue to be creative, nimble and respond to the market for them to entice customers and maintain good health despite challenging market conditions.

Remuneration, Productivity & Labour Pool indicators



CONSUMER SPENDINGChanges to dining habits

CHANGES TO DINING HABITS: Have your dining habits changed over the past 6 months?

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Results of an American Express consumer survey in 2012 indicates that overall, 55 per cent of New Zealanders claim that their dining habits have not changed over the 6 months previous. However, the continuing unstable economic climate is having an impact on consumers dining out habits; 30 per cent state that they eat out less frequently now and 12 per cent say that they are choosing to eat at less expensive establishments.

The results analyse the consumers frequency of eating out, with 5 per cent claiming to eat out at least 2-3 times a week while only 13 per cent say they eat out at least once a week - a significant decrease from 23 per cent in 2011.

On average 14 per cent eat out once a fortnight, 24 per cent once a month and 38 per cent less than once a month, an increase of 7 per cent since 2011. The number of consumers who say that they never eat out has risen by 3 per cent since 2011, to 7 per cent.

0

10

20

30

40

50

60

88556

2

12

30

55

Perc

enta

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I haven’t changed my dining habits I eat out less frequentlyI eat at less expensive establishments I eat at more expensive establishments but less oftenShare entrees and desserts to cut costs I have less coursesI drink less wine with my meal or choose BYO I use a voucher to manage the amount I spendI dine on special nights

7%

38% 24%

14%

13%5%

At Least Two-Three Times A WeekOnce A WeekOnce A FortnightOnce A MonthLess Than Once A MonthNever

4%

31%

21%

15%

23%6%

FREQUENCY OF EATING OUT:

2010

2012


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REGIONAL SPOTLIGHT:

• Wellingtonians dine out more frequently; 27% claim to eat out at least once a week, followed by Aucklanders (22%).

• Wellingtonians and young people are more likely users of daily deal offers.

• Wellingtonians and young people are more likely to have used social media or other online methods to rate their dining experience.

• 51 per cent of respondents from the Central North Island say excellent customer service was important to them and 62 per cent from this region indicate an affordable menu was key.

CONSUMER SPENDINGDining influencersWhen choosing a place to dine, the greatest influencer for consumers is whether the establishment ‘has a reputation for quality food’. Overall, 50 per cent scored this as very important, up 4 per cent since 2011.

Having an affordable menu also rates highly (45 per cent) as an attribute influencing dining choice even though this has dropped 6 per cent over the year previous.

Following from this, service was rated important at 42 per cent.

While surcharging on public holidays continues to raise hot debate amongst the industry and the media, consumers are less concerned. Choosing a place to dine based on whether they apply a surcharge or not dropped 6 per cent from the year previous, to 31 per cent. Young New Zealanders (18-29 years) are more likely to rate ‘has an affordable menu’ and ‘offering a discount on the bill’ as important while ‘doesn’t surcharge on a public holiday’ and ‘has a good atmosphere’ were rated as less important by this group.

20122011

20122011

20122011

20122011

20122011

0% 10% 20% 30% 40% 50% 60%

33%

37%

41%

46%

51%

32%

31%

42%

50%

45%Affordable menu

Reputation for quality food

Excellent service

No surcharge on public holiday

Good atmosphere

INFLUENCING DINING CHOICES: When choosing a place to dine, how important are each of the following to you?

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EXPLORING NEW WAYS TO CONNECT WITH CONSUMERSSince GrabOne launched in July 2010 they’ve worked with over 2200 New Zealand restaurants - that’s an incredible 1.9 million vouchers to over 320,000 customers. Their dining deals remain their most popular, making up around 40 per cent of sales.

Early in 2013 GrabOne hosted a survey for the Restaurant Association – an opportunity for the Association to tap into their database of over one million and broad reach throughout New Zealand.

The 2621 survey respondents were from across New Zealand including 34.3 per cent in Auckland, 13.4 per cent in Wellington, 11.3 per cent in Christchurch and 6.1 per cent in the Hawke’s Bay. Almost 50 per cent of respondents (49.9%) were aged between 22 and 44, 19.7 per cent aged between 45 and 54 and 14.8 per cent aged between 55 and 64. Only 10 per cent were 65 and over and 4.9 per cent 21 years of age and under.

DEALS & OFFERSWhen it comes to researching new restaurants, asking for a recommendation from family, friends and colleagues is still the first thing most Kiwis do before making a booking. 75.7 per cent say word-of-mouth is their main method of researching a new dining option, followed by looking at a restaurant’s website online (68.6%). It was no great surprise that 53.7 per cent of Kiwis now trial restaurants with deals or offers – a definite head nod to the New Zealand daily deal industry. GrabOne believes their restaurant deals offer customers a low risk opportunity to experience a new eatery, to experience premium offers such as degustations and a convenient option for couples and groups to enjoy a range of courses across a menu. At the same time they help merchants reach new customers with no upfront costs along with showcasing parts of the restaurants offering that may not be that well known to an engaged audience and database.

Daily DealDO’S & DON’TS

An offer is just the start of the process. It’s essential your restaurant has a plan to make the most of your promotion. Make sure you give the new customers a reason to spend more while they are dining, come back again and share their experience with their friends. After three years in the business, GrabOne knows working with a reputable daily deal operator, combined with good internal systems and a great attitude is needed to get the best out of a daily deal.

• Make sure you ask for a face-to-face meeting with the daily deal operator you’re considering working with. This is your opportunity to learn more about what similar businesses in your vicinity and sector have done, what’s worked for them and what will work for you.

• Be clear about what you hope to achieve. Is it more bums on seats? Launching a new menu/offering? Filling a quiet period in your day? A daily deal should be structured to ensure you are going a considerable way to filling at least one of your objectives.

• Look at previous partners the company has worked with. If they’ve never worked with a great dining establishment such as yours, then seriously consider whether they’re going to deliver the best results.

• Consider how you’re going to entice customers back after they’ve visited. Ask them to join your Facebook page and/or mailing list at a minimum. Perhaps give them a free drink voucher for their next visit?

• Make sure customers are walking out the door with a full belly and a smile on their faces – you want to ensure they’re leaving your establishment updating their Facebook pages and texting their friends to tell the world about this brilliant restaurant they’ve just been to. Getting this right makes a daily deal very worthwhile.54%

CONSUMERS WERE ASKED: How do you research restaurants you haven’t been to before?

trial restaurants with deals or

offers


Social media is like breathing to your current and future customers - it’s natural, they do it every day and they’re good at it! 50.6 per cent of respondents in the Restaurant Association/GrabOne survey have used Facebook to visit a restaurant’s fansite. What does this mean? If your restaurant doesn’t have an active and up to date Facebook page, then it might be time to make a change.

“Conversations are happening among your customers whether you like it or not. Social media lets you be part of these conversations.” Campbell Brown, GrabOne Marketing Director

How to make social media your friend…

• Consider who is going to look after your social media sites. Doing social well takes considerable resource – it doesn’t just sit there and take care of itself. Keep your page up-to-date, post regularly, comment against posts and provide valuable content.

• Can you be where others aren’t? Consider using Twitter, Pinterest, Instagram and YouTube to profile your restaurant and its offerings. You’ll find plenty of opportunities for these social media channels to work across each other too – a quality YouTube video of your staff preparing one of your top selling dishes or performing the Macarena for a guest’s birthday celebration make excellent content for your Facebook page.

• Take quality (even professional) photos of your best dishes and share these on your social media sites. People LOVE photos of food – you’ll get likes, comments and shares.

• Share a copy of your most recent menu. Regularly tease daily specials. This works really well if you’re a café and have a new soup or pie offering each day. For example, let your customers know you’ll be sharing the dish of the day on your Facebook page – it’s a great way to entice your customers in store while giving them a regular reason to return to your page.

• Ensure your establishment’s information is always up to date. Ensure you include your website, opening hours, address and email on your Facebook page.

• Encourage your customers to share their experience or “check in” to your establishment via social media.

• Build relationships with your suppliers - post images of new deliveries on Facebook and tag your suppliers if they’re playing in the same space. Make sure you post a photo too.

• Never get upset (publicly) if someone writes a disappointing review on your social media site. This is your opportunity to listen and to show the hundreds or thousands of other people who are your fans how you deal with complaints.

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GETTING SOCIAL

0%

10%

20%

30%

40%

50%

60%

Facebook Pinterest YouTube Twitter Other

4%2%3%2%

51%

CONSUMERS WERE ASKED: Which of these social mediums have you visited a restaurant’s fansite/page on?

76%

CONSUMERS WERE ASKED: Thinking about restaurant websites you have visited before, do you tend to view the restaurant’s menu if one is available?

answered, Yes, I do this often


These days an online presence is imperative for restaurants attracting new customers and serving existing ones. With 76.2 per cent of New Zealanders viewing restaurant menus online and an impressive 39.9 per cent making a reservation online, there is no excuse for a lack of web presence. And it’s not just fine dining restaurants that need to pay heed to this advice - 60.8 per cent of respondents have placed a takeaway order online.

Customers are looking on your website for the basics, like menus and contact details. Make sure this information is easily accessible on your site. On the GrabOne discussion boards, merchants are also regularly asked about dietary requirements, so if you offer gluten free or vegetarian options, make sure these are clearly marked.

The moral of the story? The more online visibility you have, the more opportunities your new and existing customers have to find you.

What makes a winning website…

• An up-to-date, clear menu on your website • A gallery of some of your top dishes and a peek

inside your restaurant

• Easy to find contact details, opening hours and directions

• A website that reflects the brand, look and feel, and potentially price range of the restaurant (for example – slick mood lighting shots are perfect if you’re a fine dining restaurant but if you’re a popular neighbourhood eatery make sure you capture a fun, community, family feel)

• Is your website mobile and tablet friendly? If it’s not, it should be. This is particularly frustrating for customers if they’re expected to download your menu via PDF on their phone.

• Providing online options for reservations or ordering takeaways provides a great service to your customers, and the research shows they’re making use of them - but make sure you tell your customers about this added service.

MOBILENowadays, the mobile phone has become something of an extension of the human arm. Smartphone penetration is at an all time high with 60 per cent of Kiwis in possession of one. Research shows that 30.9 per cent have used a smartphone app to find information on a restaurant and 16.5 per cent have used an app to place a takeaway order. We consider these numbers to still be relatively low and are in part due to the lack of New Zealand businesses prioritising their mobile presence.

In the past two years alone, GrabOne has grown its mobile purchasing from 9 per cent to 25 per cent. The growth in purchasing and ordering from mobile is even outperforming the ever-increasing smartphone growth.

But before you rush out and invest in an app for your eatery, consider that only 21.7 per cent of respondents would definitely use a restaurant mobile app if the menu featured on it. Instead consider how your website appears when it’s accessed on a smartphone or a tablet device. Is it a miniature version of your actual website? If so, you’re totally stuck in early 2010. Responsive web design is the techy term for making sure your website is optimised for whatever platform it is accessed on. If you’re unsure what this means, check out the GrabOne website on your smartphone and then compare this with what you see on your computer. Now do the same thing with your website.

Mobile matters…• Make sure your website is maximised for mobile,

tablet and computer.

• Use location services like Google Places for Business. Google is still the portal that most sites get found through so use the tools they provide.

• Prioritise what people are looking for when they are out and about. Phone numbers and directions should be prominent.

• Getting customers to order on their mobile the first time is key. When they have done it once you can work on building the habit.

“Mobile is the future and the future is here. The shift to mobile is happening faster than anyone can anticipate so get ahead of the curve” James Kemp, GrabOne Marketing Manager

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MAXIMISING WEB PRESENCE

600PHOTO: RAGU, AUCKLAND

OUTLET ANALYSIS

PHOTO: SAGGIO DI VINO, CHRISTCHURCH

61

SALES PER OUTLET O

UTL

ET

& S

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S G

RO

WTH


$200,000

$300,000

$400,000

$500,000

$600,000

‘08 ‘09 ‘10 ‘11 ‘12 ‘13

429592 435981452636 451142

479627 491077

429592 429280 430461 423840455669 454318

National per outlet average sales

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

‘08 ‘09 ‘10 ‘11 ‘12

477621 473752 478667 466017 491191

477621 466471 455216 437814 466655

$100,000

$200,000

$300,000

$400,000

‘08 ‘09 ‘10 ‘11 ‘12

270202 273826290777 299300

322172

270202 269617 276531 281187306079

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

‘08 ‘09 ‘10 ‘11 ‘12

504069540480 528165

590415643892

504069 532173 502289554684

611728


$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000

‘08 ‘09 ‘10 ‘11 ‘12

787282 815441753301

696675 675000787282 802667

716395654513 641509

CLUBS (HOSPITALITY)



$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000

‘08 ‘09 ‘10 ‘11 ‘12

551689 582728

862750778626

864683

551689 573772

820483731505

821490

CATERING SERVICESnominal

real

After achieving a minimal 1.1 per cent increase in national sales in the 2010 - 2011 period, the hospitality industry recorded a more positive 6.7 per cent growth in sales in 2012 over the year previous. Sales in 2012 reached $6.9 billion and are projected to surpass $7 billion in 2013.

A breakdown of the industry indicates almost all sectors showed sales growth in 2012:

• The restaurant and cafe sector, which accounts for 50% of the industry’s sales, enjoyed a 5.6 per cent increase.

• Takeaways reported a 9.1 per cent increase to reach almost $1.5 billion.

• Catering services also recorded a 9.2 per cent increase in sales.

• Pubs, taverns and bars increased by 8.5 per cent. • The only sector to report a decrease was the clubs

sector - indicating a (-)3.3 per cent drop in annual

revenue. This sector is in decline, with annual sales having dropped by almost -15 per cent over the past 4 years.

Sales revenue per outlet reached $479,627 in 2012, a 6.3 per cent increase over the year previous.

The dominant sector, restaurant & cafes, recorded a 5.4 per cent increase in revenue share per outlet. However, with over 7,000 businesses in this sector the revenue per outlet, at $491,191, is far lower than pubs, taverns and bars, which achieved $643,892 in 2012. An 8.5 per cent increase in sales and a decrease in the number of outlets enabled this sector to record a 9 per cent increase in sales per outlet. Catering services also reached a record $864,683, an 11 per cent increase over the year previous. With annual sales of $668 million, the sales revenue for this sector is spread amongst only 773 businesses.

Source: S

tatistics New

Zealand

(projected)

62

$3,000$3,750$4,500$5,250$6,000$6,750$7,500

‘08 ‘09 ‘10 ‘11 ‘12 ‘13

6092.9 6280.3 6465.9 6540.26978.1 7187.4

6092.9 6183.8 6149.1 6144.46629.5 6649.2

Mill

ions

$

$1,000

$1,150

$1,300

$1,450

$1,600

‘08 ‘09 ‘10 ‘11 ‘12

$1,427 $1,455 $1,480 $1,485$1,574

-2

0

3

5

8

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

0.41.5

-0.8

1.6

6.7

1.1

3.03.1

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Sales Outlets

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

‘08 ‘09 ‘10 ‘11 ‘12 ‘13

429592435981452636451142479627491077

429592 429280 430461 423840455669 454318

Real Nominal

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 exceed $7 billion per annum. The 6.7% increase in sales in 2012 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 - a 6% increase between 2011 and 2012. Between 2008 and 2012 an average increase of 2% annually per head of population was realised, with expenditure growing 10% over that period (from $1,427 in 2008 to $1,574 in 2012). Growth over the last year appears to be driven mostly by Auckland which had a 10% increase in per capita spending.

TOTAL SALES

HOSPITALITY SPEND PER CAPITA

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 been steady. From 2008 - 2012 national sales increased at an average rate of 3% per annum, with a 6.7% increase over the 2011 - 2012 period. Strength in the Auckland market has driven this growth nationally.

Spending per capita

This information indicates annual movements in consumer spending nationally. Since 2008, the per capita spend has recorded steady growth, with a strong 6% increase in spend between 2011 and 2012. Regional graphs on the following pages have a light green line (watermark) indicating the national average, for easy comparison.

Revenue Share per Outlet

The graph above indicates the share of total sales for each hospitality business, on average, across the different sectors of the industry. Between 2008 and 2012 there was a nominal increase in per outlet revenue share of 12%, translating to a real increase of 6% after inflation. This change was underpinned by reduced staff numbers and slower outlet growth, both of which are generalised responses to the current economic pressures. The values listed below the blue line (in grey) indicate the real growth over the five year period.

Sales Vs. 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 2012 of 6.7% was matched with a minimal outlet growth of 0.4% nationally. This resulted in a 6.3% increase in revenue share per outlet as indicated in the graph shown right.

SALES GROWTH & PER CAPITA SPENDING


OU

TLE

T &

SA

LES

GR

OW

THS

ource: Statistics N

ew Zealand

(projected)

(projected)

63

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

‘08 ‘09 ‘10 ‘11 ‘12

400995 413121436327 441180

481400

400995 406771 414951 414480

457353

Real Nominal

$1,000

$1,360

$1,720

$2,080

$2,440

$2,800

‘08 ‘09 ‘10 ‘11 ‘12

1975.3 2078 21862310.9

2585.6

1975.3 2046.1 2078.9 2171

2456.4M

illio

ns $

$800

$1,000

$1,200

$1,400

$1,600

$1,800

‘08 ‘09 ‘10 ‘11 ‘12

$1,396$1,447 $1,495

$1,555

$1,715

-2

1.2

4.4

7.6

10.8

14

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

2.54.6

-0.4

2.1

11.9

5.75.25.2

Perc

enta

ge C

hang

e

Sales Outlets

AUCKLAND

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

‘08 ‘09 ‘10 ‘11 ‘12

371024 361804400894

353238 366435

371024 356243381254

331857348131

Real Nominal

-15-10-505

1015

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

2.42.9

-3.5

0.4

6.2

-9.3

6.9

-2.1

Perc

enta

ge C

hang

e

Sales Outlets

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

471.2 461.3 493.1447.2 474.9

471.2 454.2 468.9420.1 451.2

Mill

ions

$

$600

$850

$1,100

$1,350

$1,600

‘08 ‘09 ‘10 ‘11 ‘12

$1,172 $1,135$1,205

$1,083 $1,141

WAIKATO

ABOVE: Sales in the Auckland region increased a significant 11.9% between 2011 and 2012 to reach more than $2.5 billion. Despite another 133 businesses opening in the region, a 10% increase in spend per capita resulted in the revenue share per outlet jumping to an all-time high of $481,400. The region has reported consistently strong annual sales increases over the five years, posting increases of over 5% on average. This comes at a time when many regions have had some inconsistency in sales.

The Auckland region is dominant – it employs over a third of the industry’s employees and has 37% of the country’s hospitality businesses, as well as 37% market share. This market share has been creeping up over time. Between 2008 and 2012, Auckland’s share of the industry’s sales grew by 5%.

BELOW: A sales increase of 6.2% for the Waikato region enabled the region to reach $475 million in sales in 2012.

This increase indicated some recovery for the Waikato region after a disastrous 2011 when annual sales dropped by 9.3% and the hospitality spend per capita also decreased by 10%. In 2012, the hospitality spend increased 5.4% to reach $1,141, close to the high in 2010 of $1,205.

The reduction in annual sales in 2011 also impacted on the revenue shares per outlet negatively, with an 11.9% drop to a 5 year low of $353,234. 2012 has seen a rise of revenue share per outlet of 3.7% to $366,435.


Total Sales

Total Sales

Hospitality Spending per Capita


Sales Growth Vs Outlet Growth

Sales Growth Vs Outlet Growth Revenue Share per Outlet


OU

TLE

T &

SA

LES

GR

OW

THnominal

real

Source: S

tatistics New

Zealand

64

$250,000

$300,000

$350,000

$400,000

$450,000

‘08 ‘09 ‘10 ‘11 ‘12

341375321357

385515 373935

416949

341375316418

366628351305

396007

Real Nominal

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

273.1 255.8303.4 298.4

344.4

273.1 251.9288.5 280.3

327.1

Mill

ions

$

$800

$1,000

$1,200

$1,400

$1,600

‘08 ‘09 ‘10 ‘11 ‘12

$1,012$939

$1,103 $1,077

$1,242

-10-505

101520

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

3.51.4

-1.1-0.5

15.4

-1.6

18.6

-6.3Perc

enta

ge C

hang

e

Sales Outlets

BAY OF PLENTY

$250,000

$350,000

$450,000

$550,000

$650,000

‘08 ‘09 ‘10 ‘11 ‘12

484094513248

550803 565441 547570

484094 505359 523818 531221 520218

Real Nominal

-10

-5

0

5

10

15

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

-0.1-0.7-2.4

3.4

-3.3

1.94.7

9.6

Perc

enta

ge C

hang

e

Sales Outlets

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

328.7 360.3 377.3 384.5 371.8

328.7 354.8 358.8 361.2 353.2

Mill

ions

$

$600

$900

$1,200

$1,500

$1,800

‘08 ‘09 ‘10 ‘11 ‘12

$1,434$1,565 $1,630 $1,654 $1,599

MANAWATU/WANGANUI

ABOVE: The Bay of Plenty region has experienced some highs and lows over the last five years. After reporting an 18.6% increase in sales in 2010, the following year saw sales stall with the region experiencing a (-)1.6% decrease year on year. The per capita spend at this time dropped by (-)2.4% to $1077 - one of the lowest in New Zealand. In 2012 however the per capita spend increased to $1,242 and sales growth rose by 15.4%, the largest rise in New Zealand.

The number of hospitality businesses in this region over the past five years has remained relatively static, increasing by just 26 businesses. The limited outlet growth, combined with a large increase in sales last year, enabled the revenue share per outlet to soar to $416,949, a 11% increase over 2011.

BELOW: Over the past five years the Manawatu/Wanganui region has undergone steady growth in sales, as well as sales revenue per outlet. However, in 2012 sales dropped by 3.3% to $371.8 million and revenue per outlet dropped also by 3.2% to $547,570.

The average revenue share for an outlet is, however, one of the highest in the country and 14.2% higher than the average sales revenue per outlet at national level.

There has also been a positive increase in consumer spend in this region, although this was again affected in 2012. In 2012 hospitality spend per capita was $1,599 - a decrease of 3.3% from the previous year but still slightly above the national average per capita spend of $1,574.


Total Sales

Total Sales






OU

TLE

T &

SA

LES

GR

OW

THS

ource: Statistics N

ew Zealand

65

$250,000

$320,000

$390,000

$460,000

$530,000

$600,000

‘08 ‘09 ‘10 ‘11 ‘12

585929 578335

523995 518951 532119585929 569446

498324 487545 505539

Real Nominal

-15-10-505

1015

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

1.7

-1.3

0.52.2

4.2

-2.3

-9

0.9

Perc

enta

ge C

hang

e

Sales Outlets

$0

$200

$400

$600

$800

$1,000

‘08 ‘09 ‘10 ‘11 ‘12

936.9 945860.4 840.7 876.4

936.9 930.5818.2 789.8 832.6

Mill

ions

$

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

‘08 ‘09 ‘10 ‘11 ‘12

$1,977 $1,975

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

WELLINGTON

$250,000

$300,000

$350,000

$400,000

$450,000

‘08 ‘09 ‘10 ‘11 ‘12

341441370781

405851373759

417288

341441365082

385968

351140

396443

Real Nominal

-15-10-505

1015

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

0.9

-0.2-0.9

1

12.7

-8.1

8.59.7

Perc

enta

ge C

hang

e

Sales Outlets

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

454.8498.7

541497.1

560

454.8 491 514.5467

532

Mill

ions

$

$800

$1,000

$1,200

$1,400

$1,600

‘08 ‘09 ‘10 ‘11 ‘12

$987$1,076

$1,156$1,058

$1,191

REST OF THE NORTH ISLAND

ABOVE: After recording steady increases year on year throughout most of the early millennium, hospitality businesses in the Wellington region have struggled over the past four years. Wellington was the hardest hit region in 2010 when it reported a (-)9% drop in sales, followed by another (-)2.3% decline in 2011. In 2012, however, there was a rise in sales of 4.2% to $876.4 million which translates to a 2.5% rise in sales revenue per outlet to $532,119.

Wellington does have a high average spend per capita, although this has also been in decline in recent years. At $1,788 this is 13.6% above the national average and is the highest of all regions in the North Island. This regions revenue share per outlet is the third highest in the country, 11% above the 2012 national average of $479,627.

BELOW: Hospitality industry sales growth was positive for the rest of the North Island between 2008-2010. However, this region was hit in 2011, with a drop in nominal sales of 8.1% and a slight decrease in outlet growth. This substantial decline was matched by a slowing in hospitality spending per capita, which up until 2010 had been steadily growing.

The last year has been positive for the region, however, with sales growth at 12.7% and outlet growth at only 0.9%. Although spending per capita has increased in 2012 by 12.6%, at $1,191 it is significantly less than the national average of $1,574.

This increase in per capita spend has also translated to an 11.6% increase in revenue per outlet.


Total Sales

Total Sales







Source: S

tatistics New

Zealand

OU

TLE

T &

SA

LES

GR

OW

TH

66

$200,000

$270,000

$340,000

$410,000

$480,000

$550,000

‘08 ‘09 ‘10 ‘11 ‘12

427234467755 474961 491113

521272

427234460566 451692 461391

495233

Real Nominal

-15

-9

-3

3

9

15

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

-9.9

-2.1

0.60.4

-4.4

1.22.1

9.9

Perc

enta

ge C

hang

e

Sales Outlets

$0

$200

$400

$600

$800

$1,000

‘08 ‘09 ‘10 ‘11 ‘12

807.9887.8 906.7 917.4 877.3

807.9874.2 862.3 861.9 833.5

Mill

ions

$

$800

$1,080

$1,360

$1,640

$1,920

$2,200

‘08 ‘09 ‘10 ‘11 ‘12

$1,461$1,588 $1,603 $1,636 $1,570

CANTERBURY

$250,000$300,000$350,000$400,000$450,000$500,000$550,000$600,000

‘08 ‘09 ‘10 ‘11 ‘12

421860 427380 448445501066 479221

421860 420811 426475470742 455283

Real Nominal

-10

-5

0

5

10

15

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

0.41

-1.8

2.8

-4

12.8

3.14.1

Perc

enta

ge C

hang

e

Sales Outlets

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

349.3 363.7 374.9422.9 405.9

349.3 358.1 356.5397.3 385.6

Mill

ions

$

$800

$1,150

$1,500

$1,850

$2,200

‘08 ‘09 ‘10 ‘11 ‘12

$1,716 $1,771 $1,808

$2,015$1,921

OTAGO

ABOVE: The devastating effect of the Canterbury earthquakes can be seen in the decline in sales and outlets for the region in 2012. The number of businesses decreased by -2.1% in 2011 and again fell, by (-)9.9%, in 2012. Statistics New Zealand reports an overall decline in the number of hospitality businesses over this one year period of 185.

Some may have expected the decline in sales of (-)4.4% in 2012 to have been greater, however some businesses that were able to remain open have managed to thrive over this time. As a result of the outlet closures, sales revenue per outlet climbed over 6% in 2012 to $521,272, one of the highest in the country.

BELOW: The Otago region had record growth in 2011 when sales increased by 12.8% to reach $422.9 million and hospitality spend per capita peaked at $2,015. In 2012, however, sales dropped back down to $405.9 million, a decrease of (-)4%.

Sales revenue per outlet also recorded a decrease of over 4% in 2012, to $479,221. This is close to the national average of $479,627. While hospitality spending per capita in the region also dropped over that year by 4.7%, from $2,015 to $1,921, it remains the highest in the country (22% higher than the national rate of $1,574).


Total Sales

Total Sales







OU

TLE

T &

SA

LES

GR

OW

THS

ource: Statistics N

ew Zealand

67

$250,000$300,000$350,000$400,000$450,000$500,000$550,000$600,000

‘08 ‘09 ‘10 ‘11 ‘12

577739

491648 496014 493669

561538

577739

484091 471714 463793

533488

Real Nominal

-15

-9

-3

3

9

15

‘08-‘09 ‘09-’10 ‘10-’11 ‘11-’12

0.60

-2.4

1.9

14.4

-0.5-1.5

-13.3

Perc

enta

ge C

hang

e

Sales Outlets

$0

$120

$240

$360

$480

$600

‘08 ‘09 ‘10 ‘11 ‘12

495.7429.7 423.1 421.1

481.8

495.7423.1 402.4 395.6

457.7M

illio

ns $

$800

$1,150

$1,500

$1,850

$2,200

‘08 ‘09 ‘10 ‘11 ‘12

$1,899

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

$1,794

REST OF SOUTH ISLAND

ABOVE: After recording a decline in sales annually since 2008, the rest of the South Island experienced a 14.4% rise in the last year - second only to the Bay of Plenty region (15.3%).

Per capita spending, which had also been declining year on year, has increased in the last year by 14% to $1,794. Due to this substantial rise, the region now enjoys the second highest per capita spend in the country after the Otago region ($1,921). Despite these significant changes, the number of outlets has overall remained unchanged since 2008, which in turn has assisted the revenue share per outlet to reach $561,538 in 2012.

SUMMARY: Overall, 2012 appears to be a turning point for the hospitality industry after a number of years when sales growth has been minimal. There is anecdotal evidence of a more positive outlook by hospitality business owners for 2013.

The best performing region in terms of real sales growth is the Auckland region. This region continued to report steady increases of over 5% throughout the difficult trading conditions between 2008 and 2011, and saw a significant 11.9% increase in 2012.

All but three of the regions achieved sales growth in 2012. Of those, Canterbury has been the been the most devastatingly hit in recent years but in 2013 is beginning to see a recovery with a boom of new hospitality businesses set to open this year.


Total Sales Hospitality Spending per Capita


OU

TLE

T &

SA

LES

GR

OW

THP

HO

TO: S

IDA

RT R

ES

TAU

RA

NT, A

UC

KLA

ND

Source: S

tatistics New

Zealand

68

SALES BY TYPE OF OUTLETPercentage of Revenue Captured

5%14%

8%

20%53%

2008

Restaurants Cafes Coffee Houses Takeaway food services Catering ServicesPubs, taverns & bars Clubs (Hospitality)

4%15%

10%

21%

50%

2012

The graphs above (top) show that restaurants and cafes dominate the industry’s market share, with 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 has recorded a decrease in the 5 year period 2008 - 2012. This sector and and the clubs sector both showed a decrease. The other 3 sectors absorbing that 3% loss of the restaurants and cafes sector and 1% loss of clubs sector, relatively evenly.

The number of restaurant and cafe outlets represents just under half of the industry, although this has increased 1% from 2008-2012 (from 48% to 49%), as the bottom two graphs illustrate. This means that while the sector has seen a decrease in its share of the consumer spend over this five year period, it has also increased the number of outlets - more establishments fighting for a diminished portion of the consumer dollar.

In contrast, catering services realised a 2% increase in their sales market share, while they experienced a 1% decrease in the number of outlets - less catering businesses benefitting from an increase in the share of the consumer dollar.

3%12%

6%

31%

48%

2008

3% 11%5%

32%

49%

2012

Restaurants Cafes Coffee Houses Takeaway food services Catering servicesPubs, taverns and bars Clubs (Hospitality)

BREAKDOWN OF OUTLETBy Type

Source: S

tatistics New

Zealand


OU

TLE

T G

RO

WTH

69 Restaurant Association of New Zealand & AUT University - Industry Snapshot 2013

Total No. Hospitality Outlets: National

0

4000

8000

12000

16000

‘08 ‘09 ‘10 ‘11 ‘12 ‘13

146361454914497142851440514183

Annual Outlet Growth: National

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-‘12 ‘12-’13

0.60.41.5

-0.8

1.6

Perc

enta

ge c

hang

e

Auckland

0

1000

2000

3000

4000

5000

6000

‘08 ‘09 ‘10 ‘11 ‘12

53715238501050304926

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘12

2.54.6

-0.4

2.1

Perc

enta

ge C

hang

e

OUTLET GROWTH: BY REGIONO

UTL

ET

GR

OW

TH

Waikato

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

12961266123012751270

-6

-2

2

6

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

2.42.9

-3.5

0.4

Perc

enta

ge C

hang

e

Annual Outlet Growth

Bay of Plenty

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

826798787796800

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

3.51.4

-1.1-0.5

Perc

enta

ge C

hang

e

Manawatu/Wanganui

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

679680685702679

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

-0.1-0.7-2.4

3.4

Perc

enta

ge C

hang

e

Source: S

tatistics New

Zealand


national comparison

70

Wellington

Rest of the North Island

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

16471620164216341599

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

13421330133313451332

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-11 ‘11-’12

1.7

-1.3

0.52.2

Perc

enta

ge C

hang

e

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

0.9

-0.2-0.9

1

Perc

enta

ge C

hang

e

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

16831868190918981891

Canterbury

-15

-10

-5

0

5

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

-9.9

-2.1

0.60.4

Perc

enta

ge C

hang

e

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

847844836851828

Otago

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

0.41

-1.8

2.8

Perc

enta

ge C

hang

e

0

500

1000

1500

2000

‘08 ‘09 ‘10 ‘11 ‘12

858853853874858

Rest of the South Island

-5

-2

1

4

7

10

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

0.60

-2.4

1.9

Perc

enta

ge C

hang

e


Annual Outlet Growth O

UTL

ET

GR

OW

THS

ource: Statistics N

ew Zealand

71

Waikato

Bay of Plenty

Auckland

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

3.48 3.5 3.433.52 3.56

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

2.96 2.92 2.86 2.882.98

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

3.16 3.143.01 3.06 3.11

Manawatu/Wanganui

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

2.963.05

2.96 2.93 2.92

Canterbury

2.5

2.8

3.1

3.4

3.7

4.0

‘08 ‘09 ‘10 ‘11 ‘12

3.42 3.39 3.37 3.33

3.01

Rest of the North Island

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

2.89 2.9 2.85 2.83 2.85

3

3.2

3.4

3.6

3.8

4

‘08 ‘09 ‘10 ‘11 ‘12

3.32 3.343.27 3.29 3.28

-5

-2.5

0

2.5

5

‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

-0.3

0.61

-2.1

0.6

Annual Growth - Outlets Per 1,000 Citizens Nationally

Outlets Per 1,000 Citizens Nationally

COMPETITION DENSITY


OU

TLE

T G

RO

WTH

Rest of South Island

2.52.83.03.33.53.84.0

‘08 ‘09 ‘10 ‘11 ‘12

3.29 3.323.22 3.19 3.2

Otago region

2.52.83.23.53.84.24.5

‘08 ‘09 ‘10 ‘11 ‘12

4.07 4.14 4.03 4.02 4.01

Source: S

tatistics New

Zealand

70

CATERING SERVICES

PHOTO: THE GREAT CATERING COMPANY, AUCKLAND

73

CATERING SERVICESP

hoto: Cafe H

anoi, Auckland

CAT

ER

ING

SER

VIC

ES

CATERING SECTOR SALES

0

200

400

600

800

1,000

2008 2009 2010 2011 2012

489.9 529.7

646.2 612668.4

489.9 521.6

614.5575

635

$ M

illio

ns

Real Nominal

SALES GROWTH

-10

-5

0

5

10

15

20

25

‘07-’08 ‘08-’09 ‘09-’10 ‘10-’11 ‘11-’12

9.2

-5.3

22

8.1

13.9

Perc

enta

ge c

hang

e

nominal

real

SO

UR

CE

: Statistics N

ew Zealand

The catering sector’s annual sales of $668 million (in 2012) represent a 10 per cent market share of the industry. The sector has experienced a turbulent five years, in particular recording record sales growth of 22 per cent in 2010, followed by a 5.3 per cent drop the following year. However 2012 saw recovery when the sector reported a 9.2 per cent increase in sales over the year previous. This percentage increase was the highest of the five groups within the hospitality industry surveyed.

Sales revenue per outlet for catering services also reached record levels in 2012 when per outlet sales reached $864,683, an 11 per cent increase over the year previous. This growth has been assisted by the reduction in the number of catering service providers. Over the past four years the number of catering outlets has decreased 15% - from 909 in 2009 to 773 in 2012.

From an employee productivity perspective however, catering services is the least productive sector in the industry. Sales per employee in 2012 sit at just $57,423, compared to the average for the industry overall of $67,428. This sector had an increase in employees of 26 per cent from 2008 - 2012 and this has contributed to the lower productivity rate.

PH

OTO

: THE

GR

EAT C

ATER

ING

CO

MPA

NY, A

UC

KLA

ND

PERCENTAGE MARKET SHARE 2012CATERING SERVICES

%50 per cent10 per cent


RESTAURANTS & CAFES

%

74

CATERING SPOTLIGHT


$200,000

$300,000

$400,000

$500,000

$600,000

‘08 ‘09 ‘10 ‘11 ‘12

429592 435981 452636 451142479627

429592 429280 430461 423840455669

Per outlet average sales distribution

$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000

‘08 ‘09 ‘10 ‘11 ‘12

551689 582728

862750

778626

864683

551689 573772

820483731505

821490

CATERING SERVICES

nominal

real

Source: S

tatistics New

Zealand

HOSPITALITY INDUSTRY TOTAL

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

‘08 ‘09 ‘10 ‘11 ‘12

5832862809 64369 64113

67428

5832861838 61216 60240

64060

Real Nominal

Per employee average sales distributionHOSPITALITY INDUSTRY TOTAL

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

‘08 ‘09 ‘10 ‘11 ‘12

52905

5776459613

5479057423

5290556876 56693

5147454554

CATERING SERVICES

NO. OF OUTLETS - NATIONAL

0

4000

8000

12000

16000

‘08 ‘09 ‘10 ‘11 ‘12

1454914497142851440514183

Outlets

0

4000

8000

12000

16000

‘08 ‘09 ‘10 ‘11 ‘12

773786749909888

CATERING SERVICES

Employees

30,00040,00050,00060,00070,00080,00090,000

100,000110,000

‘08 ‘09 ‘10 ‘11 ‘12

103490102000100450100000104460

Tota

l Em

ploy

ed P

erso

ns

0

22,000

44,000

66,000

88,000

110,000

‘08 ‘09 ‘10 ‘11 ‘12

11640111701084091709260

CATERING SERVICESHOSPITALITY INDUSTRY TOTAL

CAT

ER

ING

SER

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Catering services have had highs and lows over the past few years. How has your business been able to manage this unpredictability? Or has there been any for your business?We have definitely felt the changes over the past few years. In the downturn we did need to seriously look at cutting our overheads but fortunately did not

need to make any staff redundant. We simply didn’t re employ as staff members left but absorbed roles along the way. We have also had to look at other areas to generate revenue. The wedding market has always been a big focus for us and we have increased this part of our business over the past year considerably.

2010 and 2011 were very tight years and since 2012 sales have improved. This year, we have experienced a little more growth with corporates and hopefully this will continue.

Staffing levels for the catering sector are higher than any other sector in the industry. Is catering services a particularly high labour sector compared to others in the hospitality industry?Labour is definitely our biggest cost and has to be closely monitored. We do need more staff to run a catering company than a restaurant would.

With off site catering there are many hours making deliveries, collecting and transporting equipment, setting up and breaking down events, visiting clients and viewing venues. Events require more staff per guests than what you would have in a restaurant. All this pushes our wage cost up and can easily blow budgets.

The number of businesses offering catering services has declined significantly since 2009. Can you comment on this? I am not surprised to hear about the decline in catering businesses. I have even noticed that restaurants and cafes that were also taking on catering work have decreased. There were many little “do it at home” companies which seem to have folded. The daily spend for simple lunches has definitely decreased which would hurt smaller businesses that don’t have the resources to also focus on large events.

Can you comment about how the catering industry has changed over the past 10 years and more importantly how you think it may change over the coming 10?The catering market has definitely become more competitive as the corporate demand has declined. Ten years ago catering was booming especially with the Americas Cup. Staff costs were much less and I remember it was very easy for me to build my new kitchen. Since then there have been far tighter restrictions from council, wages have had to increase and be far more competitive as good qualified chefs and waiters were harder to find.

Only a crystal ball can tell what is going to happen in the next 10 years. We are looking at other ways to expand our business that doesn’t just rely on corporates. Fingers crossed!

...CATERING SPOTLIGHT

INDUSTRY VIEWPOINT : SUE FLEISCHL, Director The Great Catering Company

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Restaurant Association of New Zealand & AUT University - Industry Report 2013 75

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The Restaurant Association of New Zealand/AUT University 2013 Hospitality Report provides a valuable insight to the hospitality industry in New Zealand.

Our identification and quantification of your survey concerns not only highlights them but also provides an opportunity to proactively engage the challenging areas of your business.

While the economy looks like it is beginning to improve, as our report shows, other challenges ‘pop-up’ making our path as business professionals an ongoing and challenging one.

Take inspiration from our guest contributors Steve Logan, Michael Van de Elzen and Jimmy Summerfield. These people have difference, shown resilience and not been afraid to follow their dream. We encourage you to follow their example and in doing so elevate and improve our exciting industry even more.

We look forward to your feedback on the 2013 Hospitality Report, and the future challenges and successes of our industry for 2014.

Restaurant Association of New Zealand

45 Normanby Road, Mt Eden, Auckland 1024

PO Box 8287, Symonds Street, Auckland 1150

Ph: 64-9-638-8403, 0800-737-827

Fax: 64-9-638-4209

Email: [email protected]

Websites: www.restaurantnz.co.nz & www.dinefind.co.nz

CONTACT DETAILS

AUT University Hospitality & Tourism

52 Wellesley Street East. Auckland Central 1010

Private Bag 92006 Auckland 1142

Ph: 64-9-921-9999

Fax: 64-9-921-9812

Email: [email protected]

Website: www.aut.ac.nz

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mailto:[email protected]

mailto:[email protected]

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