Footy fans for NRL and AFL helped drive strong growth in hospitality sales in September

AFL and NRL footy fans celebrating the finals bought up hot pies, beer, fast food and booze and helped drive strong growth in hospitality sales in September.

Football fans of the two leading codes, AFL and NRL, spent big in September as they celebrated, or commiserated, their team’s performances, with Collingwood’s march to grand final victory and a thrilling AFL final series helping Victoria to record the joint biggest spending growth among the all the states.

The month of September saw Australians head to the pubs, restaurants and cafes, and open their wallets and purses despite the pressures on household budgets due to higher mortgages and rents, driving a large chunk of retail spending for the month.

However, there is still pockets of weakness through the economy in September, with footy fans‘ expenditure on beer, hot pies, fast food and champagne tempered by falls across other key discretionary and non-discretionary categories.

According to the latest Commonwealth Bank Household Spending Insights Index, five of the 12 underlying categories it tracks – recreation, utilities, health, household goods and household services – reported spending declines.

Underlying the stresses many households are under at the moment, annual spending growth dropped to 1.8 per cent from a peak of 18.7 per cent in August 2022 – well below the current rate of inflation and despite strong population growth.

Overall, the monthly CommBank HSI index rose 0.5 per cent to 137.4 in September, led by increased spending on hospitality and food and beverages, higher petrol prices and increased education spending.

Shoppers at the Pacific Fair shopping centre on the Gold Coast. Picture: Steve Pohlner

Indeed, September proved to be a month for enjoying the football final series for the AFL and NRL as well as engaging in activities for the school holidays. This helped drive hospitality spending up 2.7 per cent in September, according to the HSI index, with increased spending in pubs, bars, fast food outlets and restaurants. Increased liquor store spending and higher prices also saw food and beverage 2.2 per cent higher.

CBA chief economist Stephen Halmarick said the spending wave in hospitality helped lift the index for the month, and if hospitality spending was stripped out then the HSI index would have only lifted by around 0.3 per cent versus the actual gain of 0.5 per cent.

Victoria saw the joint biggest spending growth among the states driven by the AFL finals series, with spending up 1.5 per cent on the month. This reversed the recent trend of Victoria having the weakest monthly spending growth, but its annual spending growth remains the weakest of any state at just 0.2 per cent.

ACT also saw spending growth of 1.5 per cent, up from 1.1 per cent in August. NSW and Queensland had modest monthly spending growth of 0.6 per cent, while Tasmania was softest on the month with a fall of -0.1 per cent.

“The monthly increase in the CommBank HSI Index has stabilised at 0.5-0.6 per cent since June, up from an average increase of 0.2 per cent from February to May,” said Mr Halmarick.

“Recent household spending data has proved more resilient than expected. Part of this is price driven, but it also reflects strong income growth from the tight labour market and accumulated savings.

“Although the annual growth rate of spending remains weak, the lift of the Commbank HSI Index in September shows that the risk of a higher Reserve Bank of Australia cash rate remains. Forthcoming CPI and wages data for the third quarter of 2023 will be critical for the future direction of interest rates.”