CAFÉS, BARS & RESTAURANTS SECTOR

Transcription

1 A PROFILE OF THE CAFÉS, BARS & RESTAURANTS SECTOR IN NEW ZEALAND 2014 for ServiceIQ

2 This report is one of 11 Sector Profile Reports that ServiceIQ has developed about the 11 sectors in our gazetted coverage area. These reports aim to give an overview of each sector with a focus on economic contribution, characteristics of the workforce, skills and training, opportunities and challenges facing the sector and projections of economic contribution and employment over the next five years. They will be used to inform ServiceIQ s industry and sector advisory groups and as an input into ServiceIQ s Service Sector Workforce Development Plan. The Sector Profile Reports were prepared by Infometrics using data from official sources including the 2006 and 2013 Census, Business Demography, and GDP and modelling based on Infometrics Regional Industry Occupation Model. These data sources were supplemented with desk research and qualitative information where available. These reports should be considered alongside other pieces of work including detailed research on an individual sector, government strategies, and in-depth sector knowledge. ServiceIQ anticipates updating these profiles on an annual basis and would like to include an increasing amount of sector-specific information as we become aware of it and as more is available. For further information about the Sector Profile Reports, please contact: Jenny Connor Andrew Whiteford Industry Skills and Research Manager Senior Analyst ServiceIQ Infometrics jenny.connor@serviceiq.org.nz andreww@infometrics.co.nz Authorship This report has been prepared by: Andrew Whiteford (Senior Analyst), Dirk van Seventer (Senior Economist) and Benje Patterson (Economist) of Infometrics. All work and services rendered are at the request of, and for the purposes of ServiceIQ only. Neither Infometrics nor any of its employees accepts any responsibility on any grounds whatsoever, including negligence, to any other person or organisation. While every effort is made by Infometrics to ensure that the information, opinions, and forecasts are accurate and reliable, Infometrics shall not be liable for any adverse consequences of the client s decisions made in reliance of any report provided by Infometrics, nor shall Infometrics be held to have given or implied any warranty as to whether any report provided by Infometrics will assist in the performance of the client s functions. ServiceIQ All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means including electronic, mechanical, photocopying, recording or otherwise, without the prior permission of ServiceIQ.

3 Industry profile: Cafés, Bars and Restaurants sector 1 Table of contents Key highlights... 3 Unique characteristics... 3 Training... 4 Sector outlook INTRODUCTION... 5 Defining the cafés, bars and restaurants sector SECTOR PROFILE... 6 Employment trends to Occupations... 7 Business units... 9 Size of businesses Geography Economic contribution Other indicators: electronic card transactions INDUSTRY OUTLOOK...13 Outlook for the New Zealand economy Outlook for the cafés, bars and restaurants sector Sector outlook Occupation outlook OPPORTUNITIES AND CHALLENGES...17 Issues facing the whole sector Overview of outlook and background Strengthening economy to help cafés, bars and restaurants Higher quality products to be the big winner Issues facing parts of the sector Adapting to healthy eating trends Liquor licensing laws Transitioning into super city regulatory frameworks Living wage debate to challenge the sector DEMOGRAPHICS...19 Age Gender Highest qualification Ethnicity Country of birth Hours worked TRAINING...29

4 2 Industry profile: Cafés, Bars and Restaurants sector Age Gender Ethnicity Level of study Region Domain Provider-based training APPENDIX A. METHODOLOGY...37 Definitions of key industries and occupations Measuring employment in the cafés, bars and restaurants sector Measuring demographic characteristics of sectors Methodology for estimating net demand replacement Infometrics Regional Industry Employment Model Output and employment forecasts by industry... 40

5 Industry profile: Cafés, Bars and Restaurants sector 3 Executive summary Key highlights Approximately 75,500 people were employed in the cafés, bars and restaurants sector in Employment in the sector grew rapidly during the free-spending boom years of the early to mid-2000s but dropped sharply with the onset of the recession in Employment in the sector has been recovering over the past few years as labour market conditions and consumer spending have picked up. There were approximately 10,600 business units in the cafés, bars and restaurants sector in The number of business units in the sector grew rapidly between 2001 and 2006 and then levelled off from 2009 with the onset of the recession. The cafés, bars and restaurants sector contributed $2,648 million ($2.65 billion) to the New Zealand economy in 2012 (measured in 2010 prices). Economic output in the sector grew rapidly (3.2%pa) in the five years to 2007 but at only 0.3%pa over the next five years as the recession caused consumers to slash discretionary expenditure on entertainment. In 2012 GDP per FTE in the cafés, bars and restaurants sector was only 44% of that in the national economy. Table 1. Summary indicators for cafés, bars and restaurants sector Cafés, Bars and Restaurants New Zealand Jobs FTEs Businesses GDP ($ million) Number in ,529 2,199,074 % growth % 1.3% Number in ,897 1,871,104 % growth % 1.3% Number in , ,908 % growth % 1.8% Number in 2012 $2,648 $199,966 % growth % 2.3% Number in 2012 $47,378 $106,871 GDP per FTE % growth % 0.9% Unique characteristics The cafés, bars and restaurants sector has a much higher proportion of younger (15-24 years) workers than the national economy. More than 40% of employees in the sector are under the age of 25 compared with 14% in the national economy. There were more female than male workers in the cafés, bars and restaurants sector in Females accounted for 57.4% of total employment compared with only 47.1% in the national economy. Asians are highly represented in the cafés, bars and restaurants sector accounting for 24.3% of employees compared with 11.1% in the national economy. The Asian share of employment increased rapidly from 17.2% in 2006.

6 4 Industry profile: Cafés, Bars and Restaurants sector The cafés, bars and restaurants sector employed relatively fewer New Zealand born workers (60.7%) compared to all industries (71.7%) in Nearly 38% of workers in the cafés, bars and restaurants sector worked part-time in 2013 compared with 21.1% in the national economy. Almost 60% of employees in the cafés, bars and restaurants sector had no post school qualifications in This was a significantly higher proportion than in the national economy (43.4%). Training ServiceIQ had 1,399 cafés, bars and restaurants sector trainees at some point in 2013, which accounted for 6.5% of all ServiceIQ trainees. The majority (84.3%), of trainees in the cafés, bars and restaurants sector are studying towards level 3 qualifications. By contrast, 21.6% of trainees across the whole of ServiceIQ are studying for level 3 qualifications. Only 14.5% of trainees in the cafés, bars and restaurants sector are studying at level 4 and above. Māori comprise 13.6% and Pasifika 3.8% of trainees in the cafés, bars and restaurants sector. Sector outlook Employment in the cafés, bars and restaurants sector is expected to rise rapidly over the next five years. We forecast total employment in the sector to increase from 75,529 in 2012 to 84,150 by Driving growth in employment in the industry will be increasing patronage in cafés, bars, and restaurants. This trend will be driven by household discretionary expenditure climbing in line with improving labour market conditions. Employment growth will be relatively evenly spread, with broad occupation categories in the sector all growing between 0.9% to 4.1%pa over the five years to The broadness of this growth reflects the fact that enterprises in the industry are efficiently run after the recession has shaken out the less efficient enterprises. The surviving enterprises typically do not have spare labour capacity; therefore any upward scaling to business activity levels necessitates hiring across most business functions.

7 Industry profile: Cafés, Bars and Restaurants sector 5 1. INTRODUCTION This report presents a profile of the cafés, bars and restaurants sector. It describes trends in employment, the basic characteristics of the sector and its employees, and the characteristics of its trainees and learners. It also provides an insight into the future and presents forecasts of employment growth. Unless otherwise stated this report presents data for calendar years. Defining the cafés, bars and restaurants sector Official employment data sources are typically divided by either industry or occupation, but by themselves, neither is satisfactory for defining the ServiceIQ sectors. For example, if we defined the aviation sector purely in terms of aviation related industries such as air transport services we may not capture pilots who work in the agricultural support services doing aerial spraying. We have consequently used a combination of industries and occupations to define each of the ServiceIQ sectors. Further details of this approach are provided in the appendix. In this study we have defined the cafés, bars and restaurants sector as follows: 1. Persons employed in all occupations in the following industries: Cafés and Restaurants (code H in the 2006 Australia New Zealand Standard Industrial Classification) Pubs, Taverns and Bars (H452000) 2. Persons employed in other industries in the following occupations: Café or Restaurant Manager (code in the Australia New Zealand Standard Classification of Occupations) Barista (431112) Café Worker (431211) Waiter (431511) Chef (351311). Only 19.5% of chefs employed in other industries were included in the cafés, bars and restaurants sector. The remaining 81.5% were shared between the clubs and food services sectors. This allocation ensured that there was not double counting of employees across sectors. Cook (351411): 2.6% Bar Attendant (431111): 18.1% Kitchenhand (851311) 7.0% Definitions of these occupations and industries are provided in the Appendix. This definition has been chosen as it is the group of industries and occupations that most closely align with the ServiceIQ gazetted coverage of the cafés, bars and restaurants sector. The gazetted coverage of the cafés, bars and restaurants sector includes: licensed or unlicensed cafes, bars, taverns, pubs and restaurants

8 6 Industry profile: Cafés, Bars and Restaurants sector 2. SECTOR PROFILE Employment trends to 2012 Approximately 75,500 people were employed in the cafés, bars and restaurants sector in Employment in the sector grew rapidly during the free-spending boom years of the early to mid-2000s but then dropped sharply with the onset of the recession in Employment in the sector has been recovering over the past few years as labour market conditions and consumer spending have picked up. Employment in the cafés, bars and restaurants sector grew on average by 1.6% over the ten years to 2012 compared with 1.3% in the national economy. An outlook for the sector is provided in the section Outlook for the cafés, bars and restaurants sector on page 14. Table 2. Total employment in the cafés, bars and restaurants sector, Year Cafés, Bars and Restaurants New Zealand FTEs Jobs Change Jobs Change ,839 60,712 1,862, ,797 64, % 1,923, % ,470 66, % 1,979, % ,220 69, % 2,039, % ,995 71, % 2,108, % ,255 73, % 2,142, % ,793 75, % 2,184, % ,452 76, % 2,219, % ,689 73, % 2,167, % ,378 73, % 2,160, % ,492 75, % 2,180, % ,897 75, % 2,199, % % 1.3%

9 Industry profile: Cafés, Bars and Restaurants sector 7 Figure 1. Total employment in the cafés, bars and restaurants sector, 2001 to ,500,000 2,000,000 1,500,000 1,000, ,000 0 New Zealand Cafés, Bars and Restaurants ,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Occupations This section examines the growth in occupations in the cafés, bars and restaurants sector. By drawing on data from the population census it is possible to split out employment in the sector to approximately 1,000 detailed occupational categories. In this section we report on an aggregation of those categories into eight broad categories as well as the numerically largest detailed occupations. Table 3 shows employment by broad occupations. The sector is dominated by community and personal service workers (includes waiters and café workers) and technicians and trades workers (includes chefs and cooks). These categories accounted for the majority of job openings over the ten years to Table 3. Employment by broad occupation 1 Occupation Change pa % of total Jobs % 2012 Managers 12,578 14, % 19.0% Professionals 1,221 1, % 2.1% Technicians & Trades Workers 9,998 13, % 18.3% Community & Personal Service Workers 25,096 28, % 38.0% Clerical & Administrative Workers 1,709 2, % 3.2% Sales Workers 5,279 6, % 9.2% Machinery Operators & Drivers % 0.3% Labourers 8,414 7, % 9.9% Total 64,716 75,529 1, % 100.0% Employment 1 This table shows change in employment between 2002 and Change is measured in per annum terms. The change in number of jobs per annum between 2002 and 2012 is equal to the difference between the value in 2012 and 2002 divided by 10.

10 8 Industry profile: Cafés, Bars and Restaurants sector Figure 2. Employment by broad occupation, 2002 and 2012 Managers Professionals Technicians & Trades Workers Community & Personal Service Workers Clerical & Administrative Workers Sales Workers Machinery Operators & Drivers Labourers Table 4 shows employment in the 20 numerically largest occupations in the cafés, bars and restaurants sector. The largest occupations are waiter and café or restaurant manager which account for 13.3% and 9.8% of employment in the sector, respectively. Collectively the top 20 occupations account for 77.0% of total employment in the sector. Table 4. Employment of top 20 occupations in cafés, bars and restaurants sector Occupation Employment % of total Change pa employment, Number % Waiter 10,015 11, % % Café or Restaurant Manager 7,372 8, % % Chef 6,883 10, % % Café Worker 5,732 5, % % Kitchenhand 5,391 5, % % Sales Assistant (General) 4,485 5, % % Bar Attendant 4,088 3, % % Cook 2,333 1, % % Hotel Service Manager 2,225 2, % % Barista 2,010 4, % % Commercial Cleaner 1, % % Hotel or Motel Manager 1,591 1, % % Retail Manager (General) 1,271 1, % 3 0.2% Chief Executive or Managing Director % % Corporate General Manager 675 1, % % General Clerk % % Sales Representatives nec 435 1, % % Baker % % Fast Food Cook % 2 0.9% Receptionist (General) % % Top 20 occupations 58,156 67, % %

11 Industry profile: Cafés, Bars and Restaurants sector 9 Business units There were approximately 10,600 business units in the cafés, bars and restaurants sector in Figure 3 shows that the number of business units in the sector grew rapidly between 2001 and 2006 and then levelled off from about 2009 with the onset of the recession. Over the 10 years to 2013 the number of business units in the sector grew considerably faster (2.4%) than in the national economy (1.8%). The rapid growth in businesses was associated with the strong increase in personal incomes and discretionary spending during the boom years. Figure 3. Number of business units in the cafés, bars and restaurants sector, ,000 10,000 8,000 6,000 4,000 2, Source: Statistics NZ Table 5. Number of business units (as at February) Change pa Number % Cafés, Bars and Restaurants 8,366 10, % New Zealand 426, ,908 8, % Source: Statistics NZ

12 10 Industry profile: Cafés, Bars and Restaurants sector Size of businesses On average business units in the cafés, bars and restaurant sector are larger than in the national economy. About 62% of business units in the sector had 5 or fewer employees in 2013, compared with 87% in the national economy. Mid-size enterprises account for the majority of employment with businesses between 10 and 49 employees accounting for nearly 55% of employment in the sector. Table 6. Number of business units by number of employees Number % of total Employment Cafés, Bars Cafés, Bars Cafés, Bars and Restaurants New Zealand and Restaurants New Zealand and Restaurants 0-5 6, , % 87.1% 7,892 6 to 9 1,465 26, % 5.2% 10, to 19 1,620 21, % 4.2% 19, to , % 2.3% 21, to , % 0.7% 6, and Over 14 2, % 0.5% 10,704 Total 10, , % 100.0% 75,529 Source: Statistics NZ Geography Auckland is the region with the highest number of employees, accounting for 35.2% of employment in the cafés, bars and restaurants sector in This was followed by Wellington (12.8%) and Canterbury (12.5%). Over the 10 years to 2012 fastest growth was measured in Taranaki (2.9%), Auckland (2.8%), and Otago (1.7%). Table 7. Number of employees by region % of total FTE Region Number % Auckland 20,232 26, % 19, % Wellington 8,490 9, % 7, % Canterbury 9,243 9, % 6, % Waikato 5,500 6, % 4, % Otago 4,431 5, % 3, % Bay of Plenty 3,509 4, % 2, % Manawatu-Wanganui 3,451 3, % 2, % Gis-Hawke's Bay 2,489 2, % 2, % Tas-Nel-Marl 2,311 2, % 1, % Northland 1,877 1, % 1, % Southland 1,415 1, % 1, % Taranaki 1,169 1, % 1, % West Coast % % New Zealand 64,716 75, % 55,897 1, % Number Change pa

13 Industry profile: Cafés, Bars and Restaurants sector 11 Economic contribution The cafés, bars and restaurants sector contributed $2,648 million ($2.65 billion) to the New Zealand economy in 2012 (measured in 2010 prices 2 ). This level was only marginally above its prerecession peak measured in Economic output in the sector grew rapidly (3.2%pa) in the five years to 2007 but at only 0.3%pa over the next five years as the recession caused consumers to slash discretionary expenditure on entertainment. Table 8. Contribution to GDP by the cafés, bars and restaurants sector ( ) Figure 4. Cafés, bars and restaurants sector GDP ($m) 3,000 Cafés, Bars and Year Restaurants New Zealand $ million Change $ million Change , , , % 159, % , % 166, % , % 173, % , % 178, % , % 182, % , % 188, % , % 187, % , % 188, % , % 192, % , % 194, % , % 199, % % 2.3% 2,500 2,000 1,500 1, In this profile, we present all GDP estimates in constant 2010 prices. GDP presented in constant prices is sometimes referred to as real GDP. By using constant prices we remove the distractionary effect of inflation. It enables us to meaningfully compare GDP from one year to the next. Our GDP estimates differ from those published by Statistics New Zealand which are at 1995/6 prices.

14 12 Industry profile: Cafés, Bars and Restaurants sector Other indicators: electronic card transactions Electronic card transactions on hospitality services grew rapidly during the economic boom years. Figure 5 shows that spending on hospitality grew, in real terms, on average by 7.4% per annum between 2003 and This was a period of rapid growth in consumer spending as individuals enjoyed healthy salary and wage increases, felt wealthier as house prices boomed and enjoyed easy access to credit. Some belt tightening occurred in 2008 as interest rates rose and there were steep hikes in the cost of necessities, including household utilities, health, education, and fuel. The onset of the recession in 2009 put a further constraint on hospitality spending. There was negligible growth in hospitality electronic card transactions between 2007 and Spending has recovered strongly in 2013 as unemployment dropped and consumer sentiment bolstered by improving prospects in the job market. Figure 5. Electronic card transactions on hospitality ($million, constant 2010 prices) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Source: Statistics New Zealand Actual expenditure on hospitality services may differ from those recorded by electronic card transactions. If there is an increasing trend towards payment by electronic card then electronic card transactions may overstate actual spending.

15 Industry profile: Cafés, Bars and Restaurants sector INDUSTRY OUTLOOK Outlook for the New Zealand economy Economic growth in New Zealand is forecast to average 4.2% per annum (pa) over the two years to March 2016, as activity is supported by strong export incomes, rising construction activity, and healthy domestic confidence. Chinese and Australian economic growth rates are moderating, but demand for our primary exports will remain strong as household spending continues to grow in China. New Zealand s strong economic performance over the next 2-3 years will be accompanied by: higher net migration climbing above 30,000pa by mid-2014 and remaining over 20,000pa as we head into 2015 good employment growth, driving the unemployment rate down to 5.0% by the end of 2015 accelerating wage growth, lifting to 3.5%pa by March 2016 rising interest rates, with the official cash rate reaching 5.00% by the beginning of 2016 the return of inflation over 2%pa, due to the strengthening domestic economy, costs associated with the Christchurch rebuild, and a gradual lift in import prices. Economic growth is forecast to peak at 4.4%pa in March 2015, with growth moderating over the following two years as the stimulus from high export incomes fades, rebuilding activity in Canterbury reaches its peak level, and growth in the housing market and domestic economy slow in response to the rise in interest rates that has taken place. Figure 6. New Zealand GDP growth forecast to % 4.0% 3.5% 3.0% 2.9% Forecast 2.7% 4.2% 4.0% 3.6% 2.5% 2.0% 1.8% 1.9% 1.5% 1.0% 1.2% 0.5% 0.0%

16 14 Industry profile: Cafés, Bars and Restaurants sector Outlook for the cafés, bars and restaurants sector Sector outlook Employment in the cafés, bars and restaurants sector is expected to rise rapidly over the next five years. We forecast total employment in the sector to increase from 75,529 in 2012 to 84,150 by Driving growth in employment in the industry will be increasing patronage in cafés, bars, and restaurants. This trend will be driven by household discretionary expenditure climbing in line with improving labour market conditions. Employment growth will be relatively evenly spread, with broad occupation categories in the sector all growing between 0.9% to 4.1%pa over the five years to The broadness of this growth reflects the fact that enterprises in the industry are efficiently run after the recession has shaken out the less efficient enterprises. The surviving enterprises typically do not have spare labour capacity; therefore any upward scaling to business activity levels necessitates hiring across most business functions. Table 9. Total employment in the cafés, bars and restaurants sector, Year Cafés, Bars and Restaurants Level Change pa , % , % , % , % , % , % % Figure 7. Total employment in the cafés, bars and restaurants sector, ,000 80,000 Forecast Forecast 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

17 Industry profile: Cafés, Bars and Restaurants sector 15 Occupation outlook The tables below show forecast of employment by broad occupation and the 20 numerically largest detailed occupations in the cafés, bars and restaurants sector. In addition to new positions being created, positions will need filling due to replacement of existing staff as staff enter and leave occupations. The table below shows new jobs opening due to growth in employment, net positions opening due to replacement and total positions opening. Net replacement demand is a method for estimating job openings by occupation arising from individuals leaving an occupation net of jobs taken by individuals reentering the occupation. By netting out individuals re-entering an occupation, net replacement rates measures are a subset of more commonly cited labour turnover rates. Net replacement demand is the relevant measure for providing advice on education and training needs. Details about the method used to measure future net replacement demand are provided in the appendix. Table 10. Forecast of employment by broad occupation, Occupation Managers 14,318 15, % 801 1,131 Professionals 1,577 1, % Technicians & Trades Workers 13,824 16, % Community & Personal Service Workers 28,732 31, % 2,003 2,534 Clerical & Administrative Workers 2,391 2, % Sales Workers 6,983 7, % Machinery Operators & Drivers % Labourers 7,471 7, % Total 75,529 84,150 1, % 4,184 5,908 Employment Change pa Replacement New jobs % pa Total positions Table 11. Forecast of employment for top 20 occupations. Occupation Employment Change pa Net replacement Jobs % pa Total net positions opening pa Waiter 10,015 12, % 878 1,277 Café or Restaurant Manager 7,372 9, % 610 1,023 Chef 6,883 13,036 1, % 12 1,243 Café Worker 5,732 5, % Kitchenhand 5,391 5, % Sales Assistant (General) 4,485 5, % Bar Attendant 4,088 3, % Cook 2,333 1, % Hotel Service Manager 2,225 3, % Barista 2,010 5, % 317 1,005 Commercial Cleaner 1, % Hotel or Motel Manager 1,591 1, % 63-7 Retail Manager (General) 1,271 1, % Chief Executive or Managing Director % Corporate General Manager 675 1, % General Clerk % 4-45 Sales Representatives nec 435 1, % Baker % Fast Food Cook % Receptionist (General) % 5-3

18 16 Industry profile: Cafés, Bars and Restaurants sector The occupations with the largest number of positions opening over the five years to 2017 are waiter (1,277 per year), chef (1,243 per year), and café or restaurant manager (1,023 per year).

19 Industry profile: Cafés, Bars and Restaurants sector OPPORTUNITIES AND CHALLENGES Issues facing the whole sector Overview of outlook and background Strengthening economic activity and a buoyant outlook for discretionary spending growth, coupled with a growing population, bode well for the cafés, bars and restaurants sector as a whole over the coming decade. Nevertheless, the sector will grapple with compositional changes in the types of products it sells, as a result of concerns around healthy eating and increased demand for higher quality products as income growth picks up. Key risks for the sector include the living wage debate, alcohol licensing regulations, and the potential for local government mergers to increase compliance costs during transitional years. Strengthening economy to help cafés, bars and restaurants The New Zealand economy is forecast to go through a period of above trend growth over the next three years. As a result of this rapid economic strengthening, labour market earnings and in turn discretionary income levels (income after taxes and spending on necessities are subtracted) will rise. In this environment, households will become increasingly willing to spend on discretionary items such as wining and dining in cafés, bars and restaurants. Demand for hospitality will also be pushed up by strong population growth as a result of elevated net migration. This population growth, coupled with renewed interest in home building, is leading to the development of significant greenfields housing developments, particularly in Auckland and Canterbury. These new developments will open up opportunities for bars and eateries in surrounding suburbs. Higher quality products to be the big winner Although spending in the cafés, bars and restaurant sector will rise rapidly, there will also be compositional changes within the sector. For example, as households become more comfortable with their financial positions they will not only be more willing to visit bars and eateries, but they will also demand better quality products. In response to this changing demand, the sector will find that sales of higher quality items grow more rapidly than lower end food items. Increasing quality will mean that bars and restaurants will demand higher skilled workers. Issues facing parts of the sector Adapting to healthy eating trends The cafés, bars and restaurants sector will have to continue evolving to meet the trend towards healthy eating and a growing awareness of food intolerance. Although the consumer demand driven aspect of this trend is relatively slow moving, the risk of sudden regulatory changes pose a challenge to the sector. It is unlikely that government would implement any of the so-called fat taxes that have been mooted, but there is still a risk of the imposition of additional regulatory requirements for enterprises to provide more detailed nutritional descriptions and ensure certain skill levels of staff. The Food Bill will shortly have its second reading

20 18 Industry profile: Cafés, Bars and Restaurants sector in parliament. The Bill focuses on health and safety and will have an impact on what businesses do and what training their staff require if it is enacted. Liquor licensing laws The issue of liquor licensing will continue to challenge the cafés, bars and restaurants sector over the coming decade. These issues centre on the legal drinking age, as well as other regulatory issues such as opening hours. Over recent years efforts, have been made to raise the drinking age from 18 to 20. Although these efforts have not come to fruition, the risk of further bills of this type being introduced to Parliament remains. Fortunately for the cafés, bars and restaurants sector, the most likely scenario for raising the drinking age would be a split drinking age, whereby off-license purchases needed to be made by those aged 20 or above, while 18 to 20 year olds could still drink in bars and restaurants. If this type of regulation was introduced, the sector would actual face a lift in demand as youth would be pushed towards drinking in licensed facilities. Opening hours of bars have been restricted in many parts of the country as a result of the Sale and Supply of Alcohol Act 2012 allowing for Local Alcohol Policies. This trend has been in direct response to police and community concerns regarding health, public safety, and noise levels in urban areas. This issue will continue to challenge the sector over the coming decade. Transitioning into super city regulatory frameworks Another regulatory risk for the cafés, bars and restaurants sector stems from proposed local government mergers and the creation of new super cities. The creation of these new local government jurisdictions would be unlikely to increase the cost of conforming to registration and food safety standards over the long-run, but the transition phase could create additional costs for businesses in the shortrun as they adapt to new processes. Living wage debate to challenge the sector It is natural that in a growing economy there will be significant pressure to raise minimum wages. Although rising minimum wages will push up input costs, this cost pressure for cafés, bars and restaurants will be offset by rising profitability levels as improving economic conditions give operators greater scope for price increases. A bigger challenge for the sector will be responding to the living wage debate which is seeking to raise wages to about $18.80 per hour. A living wage compares to the minimum wage of $14.25 per hour applicable from 1 April Although a living wage may appear good for workers at face value, if it became mandatory the policy could cause some businesses to reduce staffing levels to reduce the effect on input costs. It is unlikely that living wages become mandatory, but the creation of an accreditation scheme by non-governmental organisations for living wage employers is a potential scenario. Obviously inclusion in such a scheme would be voluntary, but adoption of the practice could lead to product differentiation by food service operators looking to target consumers seeking ethical choices.

21 Industry profile: Cafés, Bars and Restaurants sector DEMOGRAPHICS This chapter describes the demographic characteristics of employees in the cafés, bars and restaurants sector. It draws heavily on the 2006 and 2013 population census. Age The cafés, bars and restaurants sector has a much higher proportion of younger (15-24 years) workers than the national economy. More than 40% of employees in the sector are under the age of 25 compared with 14% in the national economy. The number of relatively low-skilled, part time jobs in the cafés, bars and restaurants sector is attractive to young workers who are able to fit their jobs around study. Table 12. Employment by 5-year age group in the cafés, bars and restaurants sector Age Group Employment % of Total NZ % of Total ,276 14, % 18.6% 4.8% ,541 16, % 21.7% 9.1% ,997 9, % 13.0% 9.1% ,423 7, % 10.0% 9.2% ,657 5, % 7.7% 9.9% ,667 5, % 7.5% 11.7% ,001 5, % 6.6% 11.8% ,747 4, % 5.9% 11.6% ,939 3, % 4.1% 9.5% ,581 2, % 2.8% 7.4% , % 1.9% 5.9% Total 71,658 76, % 100.0% 100.0% Figure 8. Proportion of total employment by 5-year age group, 25.0% 20.0% Cafes, Bars and Restaurants New Zealand 15.0% 10.0% 5.0% 0.0%

22 20 Industry profile: Cafés, Bars and Restaurants sector The number of very young employees aged between 15 and 19 declined substantially between 2006 and 2013, while the number of 20 to 24 year olds increased substantially. This indicates that the sector took in fewer young recruits during the harder economic years between the censuses. It also suggests that the young workers who were employed in the sector before 2006 held on to their jobs as employment opportunities in better paying industries were scarce. Figure 9. Employment by 5-year age group in the cafés, bars and restaurants sector 20,000 18,000 16, ,000 12,000 10,000 8,000 6,000 4,000 2, Gender There were more female than male workers in the cafés, bars and restaurants sector in Females accounted for 57.4% of total employment compared with only 47.1% in the national economy. The share of female workers decreased from 61.0% to 57.4% between March 2006 and March This may be related to the different experience between females and males during the recession following the Global Financial Crisis. Males were more adversely affected in the wider economy due to job losses in industries in which males are concentrated such as construction and manufacturing. The relative increase in availability of males may have increased the relative number of males to females applying for jobs in the cafés, bars and restaurants sector. Table 13. Employment by gender in the cafés, bars and restaurants sector Gender Employment % of Total NZ% of Total Female 43,687 43, % 57.4% 47.1% Male 27,971 32, % 42.6% 52.9% Total 71,658 76, % 100.0% 100.0%

23 Industry profile: Cafés, Bars and Restaurants sector 21 Figure 10. Proportion of total employment by gender, % 60.0% Cafés, Bars and Restaurants New Zealand 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Female Male Figure 11. Employment by gender, 2006 and ,000 45,000 40, ,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Female Male Highest qualification Almost 60% of employees in the cafés, bars and restaurants sector had no post school qualifications in This was a significantly higher proportion than in the national economy (43.4%). Average training levels increased between 2006 and 2013 with the number of workers without a qualification falling from 65.5% to 57.0%. At the other end of the spectrum the number of workers with a degree or higher increased from 9.4% to 12.3% over the seven year period. This may be a consequence of young graduates not being able to find suitable employment in their chosen fields and being required to accept lower skilled work in the cafés, bars and restaurants sector.

24 22 Industry profile: Cafés, Bars and Restaurants sector Table 14. Employment by highest qualification in the cafés, bars and restaurants sector Highest qualification Employment % of Total NZ% of Total No Post-school Qualification 46,964 43, % 57.0% 43.4% Level 1, 2 or 3 Certificate 5,899 4, % 6.0% 3.5% Level 4 Certificate 5,103 5, % 7.3% 11.2% Level 5 and 6 diploma 4,452 6, % 8.5% 10.0% Degrees, level 7 quals and higher 6,737 9, % 12.3% 23.9% Not Elsewhere Included 2,503 6, % 9.0% 7.9% Total 71,658 76, % 100.0% 100.0% Figure 12. Employment by highest qualification, % 50.0% Cafés, Bars and Restaurants 40.0% 30.0% 20.0% 10.0% 0.0% No Qual Level 1-3 Level 4 Level 5&6 Degree & higher NE

25 Industry profile: Cafés, Bars and Restaurants sector 23 Figure 13. Employment by highest qualification in the cafés, bars and restaurants sector 50,000 45,000 40, ,000 30,000 25,000 20,000 15,000 10,000 5,000 0 No Qual Level 1-3 Level 4 Level 5&6 Degree & higher NE Ethnicity The majority (65.7%) of employees in the cafés, bars and restaurants sector in 2013 were of European ethnicity. This was the same as in Asians are highly represented in the cafés, bars and restaurants sector accounting for 24.3% of employees compared with 11.1% in the national economy. The Asian share of employment increased rapidly from 17.2% in Māori account for 12.1% of employees and Pasifika for 4.4%. The decrease in employment of workers in the Other category would have been influenced by the substantial decrease in the number of individuals who identified themselves as New Zealanders in the 2013 census compared with the 2006 census. Table 15. Employment by ethnicity, 2006 and 2013 Ethnic Employment % of Total NZ% of Total European 47,089 50, % 65.7% 77.0% Māori 9,452 9, % 12.1% 11.2% Pasifika 3,654 3, % 4.4% 5.0% Asian 12,330 18, % 24.3% 11.1% Other 7,629 2, % 3.6% 3.4% Total 71,658 76, % 110.0% 107.6%

26 24 Industry profile: Cafés, Bars and Restaurants sector Figure 14. Employment by ethnicity, cafés, bars and restaurants sector and New Zealand, % 80.0% 70.0% Cafés, Bars and Restaurants New Zealand 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% European Māori Pasifika Asian Other Figure 15. Employment by ethnicity, 2006 and ,000 50, ,000 30,000 20,000 10,000 0 European Māori Pasifika Asian Other

27 Industry profile: Cafés, Bars and Restaurants sector 25 Country of birth In 2013, New Zealand-born workers represented 60.7% of the workforce in the cafés, bars and restaurants sector. This was down from 69% in The share of workers born in Asia increased from 14.9% to 21.5% over the same period while the share of workers born in Europe increased from 6.7% to 8.2%. The cafés, bars and restaurants sector employed relatively fewer New Zealand born workers compared to all industries in These workers comprised 71.7% of all workers in all industries while they represented 60.7% in the cafés, bars and restaurants sector. There are relatively more workers born in Asia working in the cafés, bars and restaurants sector than in all industries. Table 16. Employment by country of birth, 2006 and 2013 Country of Birth Employment % of Total NZ% of Total New Zealand 49,459 46, % 60.7% 71.7% Australia 1,601 1, % 1.8% 1.6% Oceania 2,023 1, % 2.6% 3.8% Asia 10,653 16, % 21.5% 8.6% Europe 4,799 6, % 8.2% 9.4% North Africa & Middle East % 0.7% 0.4% Sub Saharan Africa 1,039 1, % 1.6% 2.3% Americas 943 1, % 2.0% 1.3% Other % 0.8% 0.9% Total 71,658 76, % 100.0% 100.0% Figure 16. Employment by country of birth, cafés, bars and restaurants sector and New Zealand, % 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Cafés, Bars and Restaurants New Zealand

28 26 Industry profile: Cafés, Bars and Restaurants sector Figure 17. Employment by country of birth in the cafés, bars and restaurants sector, 2006 and ,000 50,000 40, ,000 20,000 10,000 0

29 Industry profile: Cafés, Bars and Restaurants sector 27 Hours worked Those working hours per week account for the highest share (27.8%) of employees in the cafés, bars and restaurants sector in This share has increased since 2006 by 2.4%. 37.5% of employees the cafés bars and restaurant s sector worked part-time (under 30 hours) in This proportion was unchanged from The share of very high hours worked (50 and more) decreased from 16.8% in 2006 to 14.0% in Table 17. Employment by hours worked, 2006 and 2013 Hours Worked Employment % of Total NZ% of Total ,653 6, % 8.9% 5.0% ,833 11, % 14.8% 7.0% ,408 10, % 13.8% 9.1% ,469 13, % 17.9% 13.8% ,172 21, % 27.8% 43.0% ,903 5, % 7.0% 11.1% ,148 5, % 7.0% 8.2% Not specified 4,071 2, % 2.8% 2.8% Total 71,658 76, % 100.0% 100.0% Compared to all industries, the cafés, bars and restaurants sector in 2013 employs more part-time (less than 30 hours) workers. In all industries the share is 21.1% compared to 37.5% in the cafés, bars and restaurants sector. The share of very high hours worked (more than 50) is 14.0% which is 5.3% lower in the cafés, bars and restaurants sector compared to all industries. Figure 18. Employment by number of hours worked, cafés, bars and restaurants sector and New Zealand, % 45.0% 40.0% Cafés, Bars and Restaurants New Zealand 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Not specified

30 28 Industry profile: Cafés, Bars and Restaurants sector Figure 19. Employment by number of hours worked per week, 2006 and ,000 20, ,000 10,000 5, Not specified

31 Industry profile: Cafés, Bars and Restaurants sector TRAINING This chapter describes the characteristics of individuals being trained by ServiceIQ in The data includes all individuals who were registered at some point during The last section in the chapter describes enrolments and completions in provider-based qualifications of relevance to the cafés, bars and restaurants sector. Cafés, bars and restaurants sector trainees accounted for 5.9% of total ServiceIQ trainees. Age Table 18. Number of trainees by 5-year age group Age group Number of trainees Cafés, Bars and Restaurants ServiceIQ Cafés, Bars and Restaurants ServiceIQ Employment Cafés, Bars and Restaurants , % 14.3% 18.6% , % 32.4% 21.7% , % 17.7% 13.0% , % 9.7% 10.0% , % 6.6% 7.7% , % 5.6% 7.5% % 4.6% 6.6% % 4.0% 5.9% % 2.8% 4.1% % 2.2% 4.7% Total 1,399 21, % 100.0% 100.0% Source: ServiceIQ % of total The average age of trainees in the cafés, bars and restaurants sector was 27 which is the same as the ServiceIQ sector as a whole. Approximately 47.5% of cafés, bars and restaurants trainees are 25 years and over, compared with 53.3% in the ServiceIQ sector as a whole. There are some differences between the age profile of cafés, bars and restaurants sector trainees and the persons employed in the sector. While 52% of trainees are under 25-years of age about 40% of employees in the sector are under 25.

32 30 Industry profile: Cafés, Bars and Restaurants sector Figure 20. Proportion of trainees by 5-year age group % 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Cafés, Bars and Restaurants ServiceIQ Source: ServiceIQ

33 Industry profile: Cafés, Bars and Restaurants sector 31 Gender Females account for a higher proportion of trainees in the cafés, bars and restaurants sector than males. Approximately 55.8% of cafés, bars and restaurants sector trainees are female, compared with 53.5% in the ServiceIQ sector as a whole. The gender profile of trainees in the cafés, bars and restaurants sector is quite similar to the employment profile with females accounting for 57.4% of employees and 55.8% of trainees. Table 19. Number of trainees by gender Number of trainees % of total Employment Gender Cafés, Bars and Cafés, Bars and Cafés, Bars and ServiceIQ ServiceIQ Restaurants Restaurants Restaurants Female , % 53.5% 57.4% Male 615 9, % 46.2% 42.6% Unknown % 0.2% Total 1,399 21, % 100% 100% Source: ServiceIQ Figure 21. Proportion of trainees by gender Female Male Unknown 0% 10% 20% 30% 40% 50% 60% Cafés, Bars and Restaurants ServiceIQ Source: ServiceIQ

34 32 Industry profile: Cafés, Bars and Restaurants sector Ethnicity European is the largest ethnic group among trainees in the cafés, bars and restaurants sector accounting for 59.3% of trainees. This is a higher percentage than in ServiceIQ as a whole, in which they account for 50.9% of trainees. Within the cafés, bars and restaurants sector the Asian group accounts for 17.3% of trainees and Māori accounts for 13.6%. Table 20. Number of trainees by ethnicity Number of trainees % of total Ethnicity Cafés, Bars and Cafés, Bars and ServiceIQ Restaurants Restaurants ServiceIQ European , % 50.9% Māori 190 2, % 12.6% Pasifika 53 1, % 7.5% Asian 242 5, % 24.9% Other % 3.2% Unknown % 0.9% Total 1,399 21, % 100.0% Source: ServiceIQ Figure 22. Proportion of trainees by ethnicity European Māori Pasifika Asian Other Unknown 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Cafés, Bars and Restaurants ServiceIQ Source: ServiceIQ

35 Industry profile: Cafés, Bars and Restaurants sector 33 Level of study The majority (84.3%), of trainees in the cafés, bars and restaurants sector are studying towards level 3 qualifications. By contrast, 21.6% of trainees across the whole of ServiceIQ are studying for level 3 qualifications. Only 14.5% of trainees in the cafés, bars and restaurants sector are studying at level 4 and above. One of Government s Better Public Service targets is to get 55 percent of year olds with level 4 qualifications and above by Table 21. Number of trainees by level of study Number of trainees % of total Level Cafés, Bars and Cafés, Bars and ServiceIQ Restaurants Restaurants ServiceIQ , % 63.1% 3 1,179 4, % 21.6% , % 13.0% % 0.9% % 1.3% % 0.1% Total 1,399 21, % 100.0% Source: ServiceIQ Figure 23. Proportion of trainees by level of study % 20% 40% 60% 80% 100% Cafés, Bars and Restaurants ServiceIQ Source: ServiceIQ

36 34 Industry profile: Cafés, Bars and Restaurants sector Region The majority of training occurs in the major population centres. A high proportion of cafés, bars and restaurants sector trainees are located in Auckland (47.0%) which compares with 40.5% for all ServiceIQ trainees. The next highest concentrations are in Canterbury (15.0%), followed by Waikato and Wellington (both at 6.9%). Trainees are overrepresented in Auckland relative to employment in the region. Nearly half of all trainees are located in Auckland whereas only slightly more than 35% of cafés, bars and restaurants sector employment is in that region. Canterbury also has a significantly higher proportion of trainees than employment. Table 22. Number of trainees by region Number of trainees % of total Employment Region Cafés, Bars and Cafés, Bars and Cafés, Bars and ServiceIQ ServiceIQ Restaurants Restaurants Restaurants Northland % 2.9% 2.5% Auckland 658 8, % 40.5% 35.2% Waikato 97 1, % 8.0% 8.2% Bay of Plenty 90 1, % 7.2% 5.3% Gisborne-Hawke's Bay % 3.4% 3.7% Taranaki % 1.9% 2.1% Manawatu-Wanganui 56 1, % 5.0% 4.3% Wellington 96 1, % 9.2% 12.8% West Coast % 0.5% 0.9% Canterbury 210 2, % 10.7% 12.5% Otago % 4.5% 6.9% Southland % 1.6% 2.1% Nelson-Tasman-Marl 31 1, % 4.7% 3.5% Total 1,399 21, % 100% 100% Source: ServiceIQ