AUSTRALIA | Consumer spending in the hospitality sector has dipped in March, despite strong annual growth trends.
The National Australia Banks Consumer Spend Trend March 2026 Report has outlined that spending in the hospitality sector declined 0.9 percent in March, despite overall spend in the sector remaining 7.0 percent higher compared with the same period last year.
Although a small drop, this decline indicated slower momentum from consumers, with three in five cutting back on eating out at restaurants. Annual growth has eased from peak levels recorded in December.
Over the past year, the strongest spend growth was recorded in catering services and clubs, while growth in takeaway food services and pubs was more moderate.
The report also found that consumers instead tended to purchase food and beverages during major events, such as the NRL and AFL seasons, the Formula 1 Grand Prix in Melbourne, and the Women’s Asia World Cup.
Fuel has been a major cause as to why spend in other industries has dropped. In March, spending shifted towards non‑discretionary items, led by fuel, while discretionary spending declined, particularly on hospitality, hotels, travel and transport and personal goods.
Outside of fuel, non-discretionary categories saw little change in their share of spend, reflecting limited flexibility in purchases and food spending benefiting from some households' stockpiling nonperishable food items.
For now, consumers have absorbed higher fuel expenses with only a small impact on their broader spending, though there is clear underperformance among discretionary categories. We expect renewed cost-of-living pressures to continue to place ongoing pressure on household budgets and weigh on discretionary purchases.
Food retail spend increased 1.7 percent in March and was up 4.0 percent over the past year. The recent acceleration may be the result of households stockpiling non-perishable food items. Over the past 12 months, spending at supermarkets and grocery stores drove the growth in food spending, which was partially offset by a decrease in spending on liquor.
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