Invest
WFH sees CBD pubs’ profits halve
Despite a lift in consumer spending, the easing of restrictions has not translated into a boom for the hospitality sectors in NSW and Victoria, a big four bank has revealed.
WFH sees CBD pubs’ profits halve
Despite a lift in consumer spending, the easing of restrictions has not translated into a boom for the hospitality sectors in NSW and Victoria, a big four bank has revealed.
The latest economic data released by the National Australia Bank has shown that consumer spending in cafes, bars and restaurants in Australia’s two largest cities is well below pre-COVID-19 levels.
“Melbourne CBD cafe, restaurant and takeaway spending remains 50 per cent down on year-ago levels; while pubs are off 57 per cent; accommodation, 69 per cent; and department stores, 29 per cent,” NAB’s group chief economist, Alan Oster, said.
However, those who are stepping out are likely to be purchasing new outfits prior as clothing and footwear spending in Melbourne CBD was up 5 per cent on year-ago levels last week.
Sydney saw a series of coronavirus outbreaks from July, but avoided a widespread outbreak and did not impose harsh restrictions on activity.
While Sydney avoided a second lockdown and the restrictions Melbourne was forced to put in place, the hospitality sector still felt the brunt of lockdowns.
“Nonetheless, occupancies at Sydney CBD offices continue to be impacted as many companies have held back sending all their staff back into city offices. Sydney CBD spending has been hit hard and remains below year-ago levels. Cafes, restaurants and takeaways are down 24 per cent compared to a year ago, while pubs are off 41 per cent,” Mr Oster continued.
According to the big four bank, these sectors are unlikely to recover while Australians continue to work from home.
“While working-from-home restrictions are scheduled to ease further in Victoria in the new year, many (but by no means all) office workers across many parts of Australia have become accustomed to working from home and may not rush to return,” Mr Oster said.
The report said this is likely to be an ongoing drag on CBD spending, but could act as a tailwind for suburbs, with many seeing a boom in spending due to changing working conditions.
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