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Spending effect of All Blacks

Spending effect of All Blacks

tests in June 2016

Auckland, 14 July, 2016

The fans came and went but did they spend more money? The spending effect of the All Blacks-Wales tests was mixed in the three regions that hosted a test.

In Auckland/Northland, there was an increase in spending amongst those merchants sectors typically associated with major events – for example, accommodation and hospitality providers – but there was also lower spending amongst competing merchants – for example, movies theatres and art galleries. On balance, there was little net discernible effect of the 1st test on overall spending amongst these merchants.

In Wellington, a similar partial offset occurred between the event-sensitive merchants, but overall the net spending effect was around an extra $0.9 million, a spending lift of 3.1% for Wellington.

A similar effect occurred in Otago, with the net spending increase of around $1.2 million, which translates into a larger percentage increase of 6.7%.

The moral of the story: spending does appear to accompany test matches but the effect is more noticeable in a smaller region.

Table 1. Change in underlying spending* through Paymark merchants on Fri-Sun of All Black test, relative to annual growth over 21 days ending 26 June 2016

Spending measure and RegionAuckland & NorthlandWellingtonOtago
Event-sensitive merchants (+)**$581,222$1,390,389$1,226,565
Event-sensitive merchants (-)**-$556,576-$301,158-$34,320

* Underlying spending is measured by removing from total transactions those due to large merchants known to have partially or fully entered or exited from the Paymark merchants’ network in the last 12 months.

** Merchants categories that showed sensitivity to the test in their region were grouped as Event-sensitive merchants, and further differentiated as those typically responding with higher spending (+) and those with lower spending (-).

Graphs of effects:

Spending relative to trend for sectors typically showing sensitivity to events, either positive or negative

The following table illustrates some of the spending responses on the days around the test for sectors typically sensitive to events. Annual growth for the sector on each day was compared with the average annual growth over the 21 days ending 26 June. Growth for any one day was then classified as above or below the 21 day trend.

For example, annual spending growth at Auckland/Northland liquor outlets was 0-10% above the 21-day trend growth rate on the Friday, Saturday and Sunday of the 1st test. This sector in Otago during the 3rd test was 0-10% below trend on the Fridayand Sunday but up over 20% on the Saturday of the test. It is typical to see higher spending amongst these merchants around such events.

Conversely, spending through Paymark at movie theatres was more than 20% below trend in the test regions on most days around the tests; the exception between in Wellington on the Friday before the 2nd test when spending at movie theatres was 0-10% above the trend at the time. It is typical to see lower spending amongst these merchants around such events.

Note, Paymark is simply reporting the spending patterns observed for selected merchant categories on these dates and is not in a position to know the reason for any spending change. In some cases, changes in spending may be coincidental rather than due to the test in town. For example, the similar spending patterns amongst “adult entertainment” and “florists” merchants over these weekends may just be a chance event.

Key to table:

--- >20% below trend 21-day annual growth trend

-- 10-20% below trend

- 0-10% below trend

+ 0-10% above trend

++ 10-20% above trend

+++ >20% above trend

Merchants grouped by typical event sensitivityAuckland testWellington testDunedin test
Event-sensitive (positive) sectors
Liquor outlets++++++----+++-
Bread And Cake Retailing-+++++++++++
Takeaway Foods---++++-++++
Specialised Food Retail--++-++++++++++++-
Watch And Jewellery Retailing+++++++-+++---+++---
Pubs, Bars And Taverns--+++++++++-++++++
Recreational Sports/Clubs---++-+++++++++++++++---


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