{"id":383815,"date":"2026-04-17T06:55:12","date_gmt":"2026-04-17T06:55:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/383815\/"},"modified":"2026-04-17T06:55:12","modified_gmt":"2026-04-17T06:55:12","slug":"fuel-spike-from-iran-war-hits-new-zealand-hospitality-and-retail-as-kiwis-cut-spending","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/383815\/","title":{"rendered":"Fuel spike from Iran war hits New Zealand hospitality and retail as Kiwis cut spending"},"content":{"rendered":"
Hospitality New Zealand head of advocacy Sam MacKinnon said the industry had started the year with a sense of optimism, but the fuel crisis had been a \u201cdifficult and disappointing development\u201d.<\/p>\n
\u201cIt\u2019s no surprise that as households feel the pinch over fuel costs, spend in hospitality has dropped over the last month,\u201d MacKinnon said.<\/p>\n
\u201cThere\u2019s also a squeeze at the other end of the spectrum as suppliers grapple with their costs and place surcharges on deliveries, further tightening margins.\u201d<\/p>\n
MacKinnon said there was potential for a long tail of impacts but the ongoing effects were as yet unknown. <\/p>\n
\u201cRight now, we\u2019re still working out the immediate-term impacts and how the sector needs to respond. Like everyone we\u2019re hopeful we can come out the other side of this quickly.\u201d<\/p>\n
Nicola Waldren, general manager of the Restaurant Association. Photo \/ Supplied<\/p>\n
Nicola Waldren, Restaurant Association of New Zealand general manager, said the data echoed what they were already seeing across the sector and hearing from operators.<\/p>\n
\u201cFrom our recent survey of restaurants and cafes, about two-thirds are seeing fewer people coming through the door, while at the same time costs \u2013 especially food costs and deliveries \u2013 are rising,\u201d she said.<\/p>\n
\u201cThat pressure seemed to build as March went on, and more than three-quarters of operators attribute a large part of what they\u2019re seeing to the global conflict.\u201d<\/p>\n
She said she understood the pressure on customers, and noted it wasn\u2019t showing up as a sudden drop-off, but more of a steady softening.<\/p>\n
Waldren said while fuel is a big part of the decrease, the industry has also had to deal with Cyclone Vaianu, a softer March than expected, and the seasonal progression into winter.<\/p>\n
\u201cIt\u2019s a combination of pressures all landing at once. What remains uncertain is how this plays out for hospitality if disruption continues. <\/p>\n
\u201cOur survey shows concern increases significantly as this disruption moves from weeks into a more prolonged period \u2013 particularly around how customers will react in the long term.\u201d<\/p>\n
Retail spending<\/p>\n
Electronic card data showed spending in the retail industries in March grew by 0.7% or $52m compared with February, with core industry spending decreasing 0.1% or $8.8m month-on-month.<\/p>\n
Retail NZ chief executive Carolyn Young said the data showed New Zealanders were heeding the call to cut back on fuel consumption, with discretionary travel \u2013 and retail as a destination \u2013 taking a hit.<\/p>\n
\u201cNew Zealanders spent $583m on fuel last month, which on its face looks like a sizable jump from the $460m spent in February,\u201d Young said.<\/p>\n
\u201cHowever, March is always the country\u2019s biggest month for fuel usage. <\/p>\n
\u201cSo, if you compare last month\u2019s fuel spend to the amount spent in March 2024 [$591m], for example, we see a decline, despite the cost of petrol and diesel being much, much higher.\u201d<\/p>\n
She said apparel is always the first sector to feel the impact when the economy turns downwards, with shoppers needing to focus their spending on essentials.<\/p>\n
Young said retailers are having to bear the impacts of increased fuel prices, not just in freight but in a range of other retail services like rubbish and recycling collection. <\/p>\n
\u201cAdditionally, we are hearing from our members that the caution being seen at the pump is now flowing through to an overall drop in discretionary spending in retail in April.\u201d<\/p>\n
Food prices<\/p>\n
While spending on fuel has risen sharply as the war continues, the price of food has yet to increase.<\/p>\n
Food prices fell by 0.6% in March compared with February in the latest selected price index. <\/p>\n
Annually, food prices increased by 3.4% in the 12 months to March this year, following a 4.5% rise in the year to February.<\/p>\n
Foodstuffs NZ managing director Chris Quin said neither Stats NZ\u2019s selected price index data nor the Foodstuffs co-op\u2019s comparable Food Price Inflation basket reflected the renewed cost pressure across the supply chain.<\/p>\n
\u201cWe\u2019re seeing the early impacts of higher fuel costs, but some of that pressure will take time to show up on-shelf because we\u2019re at the end of global and domestic supply chains,\u201d said Quin. <\/p>\n
\u201cWe are working closely with suppliers to navigate a tough environment, while trying to protect customers from rising costs as much as we can.\u201d <\/p>\n
Quin said there were no product shortages currently but the significant rise in fuel prices was being felt throughout the food system, from farms and factories to packaging, transport and logistics, and supermarkets. <\/p>\n
As a result, Foodstuffs is rolling out a package of changes to support its small and medium-sized New Zealand suppliers.<\/p>\n
The package includes faster payments for small businesses, and quicker turnaround on price change requests that are driven by their increased fuel costs. <\/p>\n
\u201cOur focus remains on keeping grocery prices as steady as possible, especially when many households are already under cost-of-living pressure. We\u2019re working alongside suppliers who are seeing genuine cost increases to help them through these temporary challenges.\u201d <\/p>\n
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.<\/p>\n