TAUPO DISTRICT COUNCIL QUARTERLY REPORT For Period Ending December 2018

Prepared for Jessica Simpson

Date January 2019 CONTENTS

DECEMBER 2018 QUARTER RETAIL OVERVIEW 3 WHERE ARE THE RETAIL HOTSPOTS? 4 PREPARED FOR: WHERE ARE THE RETAIL HOTSPOTS IN ? 5 WHO IS SPENDING AT OUR RETAILERS? 6 WHAT DOES OUR RETAIL CASHFLOW LOOK LIKE? 7 HOW ARE OUR RETAILERS COMPARING TO OTHER AREAS? 8 DOES OUR LOCAL RETAIL MEET THE NEEDS OF CUSTOMERS? 9 HOW DO WE COMPARE TO COMPETITORS? 10 HOW ARE TURANGI RETAILERS COMPARING TO OTHER AREAS? 11 HOW HAS RETAIL ACTIVITY VARIED BY WEEK? 12 WHEN ARE OUR RETAILERS BUSIEST? 13 TAUPO LONG TERM TRENDS 14 HOW ARE WE PERFORMING IN OUR MARKET? 15 HOW MUCH ARE LOCALS SPENDING ONLINE? 16 DATA SOURCE 17

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Disclaimer While every effort has been made in the production of this report, Paymark, the BNZ and Marketview Limited are not responsible for the results of any actions taken on the basis of the information in this report. Paymark, BNZ, and Marketview expressly disclaim any liability to any person for anything done or omitted to be done by any such person in reliance on the contents of this report and any losses suffered by any person whether direct or indirect, including loss of profits.

QUARTERLY REPORT | COUNCIL Page 2 of 17 RETAIL OVERVIEW For Period Ending DECEMBER 2018 QUARTER

QUARTERLY ACTIVITY MARKET SHARE Changes over same time last year Your Share vs Key Competitors

SPENDING TRANSACTIONS Market share is your share of spending in the market (yourself and key competitors). $189,236,516 3,728,373 13.1% Your key competitors are based on areas you have p 3.3% p 2.8% chosen, in this case Nelson, , Napier, Thames- Spending in your area grew by 3.3% over the same time last year. vs. last year Coromandel, Queenstown territorial authorities Transactions in your area grew by 2.8%. NZ spending grew by 3.7%, q -0.2% and transactions by 2.4%

CARDHOLDER ORIGIN FASTEST GROWING STORETYPES CHANGE Furniture/Flooring in your area had (VS. SAME CARDHOLDER VALUE SPENT IN YOUR IN YOUR AREA vs. last year the largest growth amongst QUARTER CONTRIBUTION COUNCIL storetypes, up 13.7%. LAST YEAR) Furniture/Flooring p 13.7% 12.7% LOCALS 50.8% $96.14 mn p IN COMPETITOR LOCATIONS vs. last year Fuel had the largest growth in Key Fuel p 13.8% Competitor locations, up 13.8%. -4.9% ROTORUA 2.4% $4.55 mn q LOYALTY AND OUTFLOW REST OF NZ -6.4% Destination of Locals' Spending 39.0% $73.75 mn CARDHOLDERS q Taupo District 60.9% Taupo residents conducted 60.9% of Rotorua District 3.4% their retail spending in Taupo District INTERNATIONAL 3.8% 7.8% $14.80 mn and 3.4% in the Rotorua District. Rest of NZ 22.5% CARDHOLDERS p They spent 13.2% online. Online 13.2%

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 3 of 17 WHERE ARE THE RETAIL HOTSPOTS? How does this affect planning? Is it happening where we want it to happen?

TOP PERFORMING LOCATIONS CHANGE IN SPENDING Based on percentage change in spending from same period last year Change in spending over same period last year

FOR ALL INTERNATIONAL MANGAKINO RANK LOCATION VALUE OF SPENDING CHANGE IN SPENDING CARDHOLDER CARDHOLDERS 1 Mangakino $882,009 17.3% 2 Turangi $17,154,821 7.5% 3 Rest of Taupo $38,466,781 5.3% 4 KTHD $3,082,644 4.4% 5 CBD/Spa Road $114,333,254 2.3% 6 Miro/Ashwood $13,270,254 2.0% 7 Totara Point $2,046,753 -6.4% TOTAL $189,236,516 3.3%

DISTRIBUTION OF SPENDING Split by cardholder location Local Cardholders Rotorua Cardholders Rest of International CBD/Spa Road KTHD Mangakino Miro/Ashwood Totara Point Turangi Rest of Taupo 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 4 of 17 WHERE ARE THE RETAIL HOTSPOTS IN TURANGI? How does this affect planning? Is it happening where we want it to happen?

TOP PERFORMING LOCATIONS CHANGE IN SPENDING Based on percentage change in spending from same period last year Change in spending over same period last year

FOR ALL INTERNATIONAL INDUSTRIAL MALL PRECINCT RANK LOCATION VALUE OF SPENDING CHANGE IN SPENDING CARDHOLDER CARDHOLDERS 1 Central $10,970,609 6.7% 2 East State Highway $621,347 -4.1% 3 Industrial $2,216,572 25.2% 4 Mall Precinct $1,305,329 12.9% North East 5 North East $817,281 -4.8% North of River 6 North of River $1,223,682 -1.7%

TOTAL $17,154,821 7.5% Mall Precinct

Central DISTRIBUTION OF SPENDING Split by cardholder location Local Cardholders Rotorua Cardholders East State Rest of New Zealand International Central Industrial East State Highway Industrial Mall Precinct North East North of River

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 5 of 17 WHO IS SPENDING AT OUR RETAILERS? Is this changing? How appealing are we to visitors/ tourists?

SPENDING BY CARDHOLDER LOCATION DISTRIBUTION OF CARDHOLDERS Change in spending over same period last year Including international cardholders CHANGE ON SAME CARDHOLDER AREA VALUE SPENT QUARTER LAST YEAR 2%

TAUPO $96.14 mn p 12.7% 39% 51%

ROTORUA $4.55 mn q -4.9%

8% AUCKLAND $20.28 mn q -2.2%

Taupo District Council Rotorua WELLINGTON $8.49 mn q -9.0% Rest of NZ Cardholders International

HAWKES BAY $5.82 mn q -19.9%

FASTEST GROWING CONSUMER REST OF NZ $39.15 mn q -5.4% GROUP CARDHOLDERS Based on spending change from the same period last year INTERNATIONAL $14.80 mn p 3.8%

International cardholder spending within New Zealand is up 7.5% over the same period lat year, and transactions are up 15.4% p TAUPO DISTRICT COUNCIL

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 6 of 17 WHAT DOES OUR RETAIL CASHFLOW LOOK LIKE? How much are we leaking to other areas?

OVERVIEW OF INFLOW AND OUTFLOW TO/FROM TAUPO DISTRICT THE BREAKDOWN Non-locals include international cardholders

LOCALS SPENDING LOCALLY TOTAL INFLOW The total amount spent in your $96.14 mn council area + $189.24 mn NON-LOCALS SPENDING IN YOUR AREA $93.10 mn

TOTAL OUTFLOW The total amount local ORIGIN OF INFLOW BY CARDHOLDER LOCATION cardholders spent outside your - $61.72 mn Breakdown of spending in your council local area This figure includes $40.93mn spent in other areas, and $20.79mn spent online" What's coming into your council

What's spent outside your council

NET INFLOW TO YOUR AREA CARDHOLDER LOCATION YOUR COUNCIL ELSEWHERE IN NZ Total inflow minus total outflow Taupo $96.14 mn $40.93 mn = $127.51 mn Rotorua $4.55 mn $233.30 mn Auckland $20.28 mn $5,551.08 mn Wellington $8.49 mn $1,397.23 mn MARKET PENETRATION Hawkes Bay $5.82 mn $505.55 mn The amount of possible Rest of NZ Cardholders $39.15 mn $7,839.95 mn spending that was spent at = 75.41% International $14.80 mn $632.93 mn local retailers TOTAL $189.24 mn $16,200.97 mn

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 7 of 17 HOW ARE OUR RETAILERS COMPARING TO OTHER AREAS? Are we keeping pace? Are our retailers maximising the available opportunities?

RETAIL CATEGORY CHANGE IN SPENDING AND PERFORMANCE ORIGIN OF CARDHOLDERS Spending change over same period last year Including international cardholders

YOU VS. COMPETITOR Local Cardholders Rotorua Cardholders GROUP Rest of New Zealand International YOUR CHANGE ON RETAIL CATEGORY $$ SPEND RANK RESULT SQLY Accommodation ACCOMMODATION $18.06 mn q -4.6% 3 -2 Apparel Department Stores APPAREL $7.50 mn q -1.6% 2 1 Electrical / Appliances DEPARTMENT STORES $10.45 mn q -1.8% 5 -2 Food and Beverage Services

ELECTRICAL / Fuel $3.79 mn p 4.2% 3 -2 APPLIANCES Furniture/Flooring FOOD AND BEVERAGE Hardware/Homeware $26.16 mn p 2.3% 6 0 SERVICES Other FUEL $28.87 mn p 13.1% 4 -2 Recreational Supermarkets and… FURNITURE/FLOORING $1.85 mn p 13.7% 4 1 0.0% 20.0% 40.0% HARDWARE/HOMEWA $11.47 mn p 1.9% 5 -2 RE FASTEST GROWING CATEGORIES OTHER $11.68 mn q -0.4% 5 -3 Domestic/ International split

RECREATIONAL $10.42 mn q -2.9% 6 -4 For ALL For INTERNATIONAL SUPERMARKETS AND Cardholders Cardholders $58.98 mn p 5.6% 3 1 SPECIALISED FOOD FURNITURE/FLOORING APPAREL The competitor group is made up of retailers in Nelson City, Rotorua District, Thames-Coromandel District, Napier City and Queenstown District.

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 8 of 17 DOES OUR LOCAL RETAIL MEET THE NEEDS OF CUSTOMERS? Have we got gaps? Where should be target development?

PROPORTION OF LOCAL CARDHOLDER'S SPENDING THAT GOES TO LOCAL MERCHANTS OVERALL LOYALTY High percentages presume that local cardholders are happy with local options

RETAIL CATEGORY PROPORTION OF SPENDING DONE LOCALLY Taupo 17.8% ACCOMMODATION 70.1% New Zealand Avg 19.0% Local cardholders spent 70.1% at local Taupo 52.2% merchants this quarter. APPAREL New Zealand Avg 53.9% Taupo 66.9% DEPARTMENT STORES New Zealand Avg 65.3% Taupo 71.4% ELECTRICAL / APPLIANCES New Zealand Avg 64.5% 66.0% FOOD AND BEVERAGE Taupo 58.5% SERVICES New Zealand Avg 58.1% New Zealanders spent 66.0% with their local Taupo 69.7% merchants this quarter. FUEL New Zealand Avg 66.4% Taupo 53.6% FURNITURE/FLOORING New Zealand Avg 58.2% Taupo 79.9% MOST LOYAL CATEGORY HARDWARE/HOMEWARE New Zealand Avg 66.8% SPENDING Taupo 67.7% SUPERMARKETS AND SPECIALISED FOOD OTHER New Zealand Avg 62.5% Taupo 69.7% TRANSACTIONS RECREATIONAL New Zealand Avg 57.0% HARDWARE/HOMEWARE SUPERMARKETS AND Taupo 80.2% SPECIALISED FOOD New Zealand Avg 76.3% 0.0% 50.0% 100.0%

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 9 of 17 HOW DO WE COMPARE TO COMPETITORS? Is your local offering sufficient? How to you compare against competitors?

CHANGE IN SPENDING BY RETAIL CATEGORY TAUPO DISTRICT CHANGE COMPARED TO PEER GROUP AVERAGE Over Same Period last year

TAUPO NELSON ROTORUA NAPIER THAMES QUEENSTOWN

30.0% 4.0% 25.0% 2.0% 20.0% 0.0% 15.0% 10.0% -2.0% 5.0% -4.0% 0.0% -6.0% -5.0% -8.0% -10.0% -10.0% -15.0% Fuel Total Fuel Other Total Other Apparel Apparel Recreational Recreational Accommodation Accommodation Furniture/Flooring Food Furniture/Flooring Specialised Food Department Stores Department Supermarkets and Department StoresDepartment Hardware/Homeware Electrical / Appliances Electrical Hardware/Homeware Electrical / Appliances Food and Beverage Services Beverage and Food Supermarkets and Specialised and Supermarkets Food and Beverage Services

BEST COMPARED TO AVERAGE PEER WORST COMPARED TO AVERAGE PEER Based on change in spending this year over same time last year Based on change in spending this year over same time last year

ACCOMMODATION DEPARTMENT STORES

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 10 of 17 HOW ARE TURANGI RETAILERS COMPARING TO OTHER AREAS? Are we keeping pace? Are our retailers maximising the available opportunities?

RETAIL CATEGORY CHANGE IN SPENDING AND PERFORMANCE ORIGIN OF CARDHOLDERS Spending change over same period last year Including international cardholders

YOU VS. COMPETITOR Local Cardholders Rotorua Cardholders GROUP YOUR CHANGE ON Wellington Cardholders Hawkes Bay Cardholders RETAIL CATEGORY $$ SPEND RANK RESULT SQLY Auckland Cardholders Rest of New Zealand ACCOMMODATION $1.18 mn q -9.3% 6 -4 International Accommodation FOOD AND BEVERAGE $1.47 mn p 24.3% 1 0 SERVICES Food and Beverage Services

FUEL $4.82 mn p 11.2% 4 1 Fuel

HARDWARE/HOMEWARE $0.99 mn p 24.6% 1 1 Hardware/Homeware

Other OTHER $0.46 mn p 1.2% 4 1 Recreational RECREATIONAL $0.57 mn q -19.2% 6 -5 Supermarkets and Specialised Food SUPERMARKETS AND $7.67 mn p 6.7% 3 -1 0.0% 20.0% 40.0% 60.0% SPECIALISED FOOD FASTEST GROWING CATEGORIES Domestic/ International split

For ALL For INTERNATIONAL The competitor group is made up of retailers in Nelson City, Rotorua District, Thames-Coromandel District, Cardholders Cardholders Napier City and Queenstown District. Food and Beverage Hardware/Homeware Services

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 11 of 17 HOW HAS RETAIL ACTIVITY VARIED BY WEEK? How does this affect planning? Has any event stimulated activity?

TOTAL MARKET SPENDING AND PROPORTION DONE IN YOUR COUNCIL BEST PERFORMERS By Week TOTAL MARKET SPENDING

$160,000,000 15.0%

$140,000,000 14.5% YOUR HIGHEST TOTAL WEEKLY SPEND Week of $120,000,000 14.0%

$100,000,000 13.5% 30 December 2018

$80,000,000 13.0%

$60,000,000 12.5%

$40,000,000 12.0%

$20,000,000 11.5% YOUR HIGHEST WEEKLY MARKET SHARE $0 11.0% Week of 30 December 2018 7 October 2018 7 October 14 October 2018 October 14 2018 October 21 2018 October 28 2 December 2018 2 December 2018 9 December 4 November 2018 4 November 16 December 2018 December 16 2018 December 23 2018 December 30 11 November 2018 November 11 2018 November 18 2018 November 25

Total market is based on spending at yourself and competitors. The competitor group is made up of retailers in Nelson City, Rotorua District, Thames-Coromandel District, Napier City and Queenstown District.

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 12 of 17 WHEN ARE OUR RETAILERS BUSIEST? Are we managing council resources effectively to match these busy periods?

TOTAL MARKET SPENDING AND PROPORTION DONE IN YOUR COUNCIL YOUR BEST PERFORMERS By Week TOTAL MARKET SPENDING $250.0 mn 13.6% 13.4% $200.0 mn 13.2% DAY OF THE WEEK WITH MOST SPENDING $150.0 mn 13.0% 12.8% Friday $100.0 mn 12.6% 12.4% $50.0 mn 12.2% $0.0 mn 12.0% Monday Tuesday Wednesday Thursday Friday Saturday Sunday DAY OF THE WEEK WITH HIGHEST MARKET SHARE DiSTRIBUTION OF SPENDING AT MERCHANTS IN YOUR COUNCIL AREA - BY TIME OF DAY The darker the box, the higher the proportion of spending Friday

MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY Avg. for Period Midnight - 4am 0.3% 0.3% 0.3% 0.3% 0.4% 0.9% 1.4% 0.6% 4am - 8am 2.4% 3.0% 2.8% 2.7% 2.6% 1.8% 1.6% 2.4% 8am - Midday 29.5% 27.6% 27.0% 27.4% 25.5% 29.9% 30.0% 28.1% Midday - 4pm 38.3% 37.5% 36.8% 36.6% 37.3% 38.9% 40.3% 38.0% TIME PERIOD WITH HIGHEST 4pm - 8pm 24.0% 25.8% 27.0% 26.5% 26.5% 20.9% 21.3% 24.5% PROPORTION OF SPENDING 8pm - Midnight 5.5% 5.8% 6.0% 6.4% 7.7% 7.6% 5.5% 6.4% Avg. for Day 14.2% 11.5% 13.1% 14.5% 16.7% 16.3% 13.6% 100.0% Midday - 4pm

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 13 of 17 TAUPO LONG TERM TRENDS

MOVING ANNUAL TOTAL - RETAIL SPENDING - BY QUARTER THE FIGURES Spending trends in Market Based on Moving Annual Total Quarters Spending

12 mnths to TAUPO COMPETITORS COMPETITORS TAUPO Jun-2016 $577.31 m $3,840.21 m 160 Sep-2016 $586.98 m $3,918.89 m Dec-2016 $598.34 m $3,999.29 m 140 Mar-2017 $607.32 m $4,057.39 m 120 Dec-2018 $672.08 m $4,495.29 m

100

80

60 Change over TAUPO COMPETITORS 40 STLY Jun-2016 6.81% 7.74% 20 Sep-2016 7.42% 8.43% 0 Dec-2016 7.81% 8.74% Mar-2017 6.46% 7.49% Dec-2018 16.42% 17.06%

* most recent 12 month period directly above SPENDING AVERAGE TRANSACTION VALUE CHANGE OVER 5 YEARS AGO CHANGE OVER 5 YEARS AGO

TAUPO COMPETITORS TAUPO COMPETITORS

p p q q 40.4% 43.4% -0.9% -5.4%

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 14 of 17 HOW ARE WE PERFORMING IN OUR MARKET? Are we keeping pace? Are our retailers maximising the available opportunities?

Change over Previous Fastest Growing Categories Average Transaction Value Year MERCHANT SPEND TRANS DOMESTIC INTERNATIONAL DOMESTIC INTERNATIONAL AREA

Taupo 3.3% 2.8% Accommodation Hardware/Homeware $49.15 $82.57

Nelson 1.7% 1.9% Department Stores Accommodation $47.54 $63.89

Rotorua 4.8% 4.1% Accommodation Accommodation $45.41 $77.36

Napier 5.4% 4.7% Accommodation Hardware/Homeware $44.92 $74.73

Thames- 6.9% 6.2% Accommodation Department Stores $46.33 $60.29 Coromandel

Queenstown 5.5% 9.1% Accommodation Department Stores $46.98 $73.48

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 15 of 17 HOW MUCH ARE LOCALS SPENDING ONLINE? Is your local offering sufficient? What does this mean for property prices?

CHANGE IN ONLINE SPENDING VS TOTAL NZ TRENDS Rolling 12 months change in spending THE BREAKDOWN Your Cardholders Online Spending Your Cardholders Total Retail GROWTH IN ONLINE SPENDING NZ Online Spending NZ Total Retail Spending (this quarter) Your Locals Total NZ 25% p 30.0% p 7.9%

20% SHARE OF TOTAL RETAIL SPENDING Your Locals Total NZ 15% 13.2% 10.7%

10% % SPENT ON OVERSEAS WEBSITES (this quarter) 5% Your Locals Total NZ 32.7% 41.5% 0%

FASTEST GROWING ONLINE CATEGORY July 18 May 18 April 18

June 18 (for local cardholders) March 18 August 18 January 18 October 18 February 18 December 18 November18 September 18 Recreational

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 16 of 17 DATA SOURCE

The data included in this report represents the total value of electronic card retail transactions. For a frame of reference, Statistics NZ report just under 70% of total retail is paid with an electronic card (ECT publication and Retail Trade Survey). The rest is comprised of cash, hire-purchase and any other less-frequent method of payment. The data (referred to as Hybrid Data on the graph below) combines our two primary data sets in order to capture the complete quantity of retail spending.

The first of these is the Bank of New Zealand cardholder base. This set is based on the eftpos, debit and credit card transactions made by BNZ cardholders. BNZ has around a 20% share of the cards market, so on average BNZ Marketview accounts for one in five retail transactions. (As at July 1 2015, there were over 650,000 active BNZ cardholders).

The second is the Paymark merchant database. New Zealand has two eftpos networks. The largest of these is run by Paymark, a joint venture owned by ASB, BNZ, (formerly) the National Bank and Westpac. Approximately 75% of New Zealand retailers use the Paymark network. This data set provides a complete view of all eftpos, debit and credit card transactions made at merchants on the Paymark network, both from New Zealanders and international visitors. (As at July 1 2015, there were over 40,000 active merchants on the Paymark network).

For retailers which are not on Paymark network, there is no transactional data available from on the Paymark database. To fill this data gap we weight the BNZ cardholder spending at non-Paymark merchants. The weightings would be based on BNZ’s share of the Paymark transactions. The underlying assumption would be that the BNZ cardholders would make up a similar share of spending at Paymark and non-Paymark merchants. The graph below illustrates how our Hybrid Data is used to account for spend at non-Paymark retailers (BNZ proportions will differ from graph).

QUARTERLY REPORT | TAUPO DISTRICT COUNCIL Page 17 of 17