COVID’s Uneven Effects On Regional Spending

COVID-19 dampened spending across New Zealand in February, but less so outside of the major North Island centres and Canterbury

According to data released by Worldline NZ today, consumer spending across New Zealand weakened in February as the Omicron variant of COVID-19 surged and spread across the nation, but regional effects were mixed.

The consumer spending recorded through core retail merchants (excluding Hospitality) in Worldline NZ’s network was $2.6B in February, up 3% on the same month last year. However, the company’s Head of Data, George Putnam, says while this does show overall annual growth, the longer view of the data is more complex.

“February last year saw spending patterns altered by some short-term COVID Alert Level restrictions, so it is not a good comparator. We have to go back a full two years to February 2020, to the time just before the first case of COVID-19 arrived in New Zealand and before restrictions took effect, to gauge how well – or not so well – merchants are faring at present.”

Putnam says a comparative two-year look at the spending data paints a mixed picture.

“Times are clearly tough for the Hospitality sector. This has been the case for 24 months now and has continued to track below year-ago and two-year ago levels in January and February,” he says.

“Spending through Hospitality merchants in February this year ($0.7B) is down 21% on the first 28 days of February 2020. The rest of the core retail sector is experiencing trading above pre-COVID levels, at least in total, but this margin over pre-COVID times narrowed in February.”

Putnam says core retail spending (excluding Hospitality) through Worldline NZ’s network was 5% above the first 28 days of February 2020, whereas the two-year growth rate had been 13% in January.

“The regional pattern is clearly mixed, which can be seen in the table below,” he says.

“Core retail spending, excluding Hospitality, was below pre-COVID levels in parts of the South Island for February and (although not shown in the table) spending was only barely above two-year ago levels in Auckland / Northland and Wellington by the last week of the month.”

The regions recording the highest two-year growth rates in February were Whanganui (+19% vs 1-28th February 2020) and Taranaki (+18%). They also recorded the highest growth rates on February last year. Regions showing declines since 2020 were West Coast (-3%), Marlborough (-4%) and Otago (-6%).

"The direct and indirect effects of COVID are clearly having an influence on spending in the various regions of New Zealand. We will continue to keep an eye on how this is impacting consumer spending as we all grapple with the ongoing surge of Omicron in the community," says Putnam.

Figure 1: All Cards NZ annual underlying* spending growth through Worldline February for regional core retail excluding hospitality merchants (* Underlying excludes large clients moving to or from Worldline)

Note:

These figures reflect general market trends and should not be taken as a proxy for Worldline‘s market share or company earnings. The figures primarily reflect transactions undertaken within stores but also include some ecommerce transactions. The figures exclude transactions through Worldline undertaken by merchants outside the Core Retail sector (as defined by Statistics NZ).

ABOUT WORLDLINE IN NEW ZEALAND

We are New Zealand's leading payments innovator. We design, build and deliver payment solutions that help Kiwi business succeed. Whether you’re looking for in store, online or mobile payment solutions or powerful business insights, Worldline is here to help with technology backed by experience. www.paymark.co.nz

About Worldline

Worldline [Euronext: WLN] is the European leader in the payments and transactional services industry and #4 player worldwide. With its global reach and its commitment to innovation, Worldline is the technology partner of choice for merchants, banks and third-party acquirers as well as public transport operators, government agencies and industrial companies in all sectors. Powered by over 20,000 employees in more than 50 countries, Worldline provides its clients with sustainable, trusted and secure solutions across the payment value chain, fostering their business growth wherever they are. Services offered by Worldline in the areas of Merchant Services; Terminals, Solutions & Services; Financial Services and Mobility & e-Transactional Services include domestic and cross-border commercial acquiring, both in-store and online, highly-secure payment transaction processing, a broad portfolio of payment terminals as well as e-ticketing and digital services in the industrial environment. In 2020 Worldline generated a proforma revenue of 4.8 billion euros. worldline.com

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