Residents spend big

City of Melbourne residents spend four times as much as workers in Melbourne’s shops, cafes and bars, new research has revealed.

SGS Economics & Planning research shows that residents each spend $10,000 on retail and hospitality each year within the city.

Workers spend $2500 each year on retail and hospitality, while students spend just $1800.

Yarra River Business Association executive officer Tim Bracher said the report sent a strong reminder that local businesses which ignore the local market, do so at their peril.

“Most switched-on business operators in our precinct realise that there is potentially more revenue to be made from the thousands of people living in the high-rise behind them, than the casual visitor,” he said.

“They ignore the resident at their financial peril, but those business people who go out of their way to look after the locals are usually rewarded with repeat business and strong word of mouth.”

The research was commissioned by the council as part of its Retail and Hospitality Strategy First Year Report.

The research shows that, as a group, workers spend the most in the city on retail and hospitality – $1.09 billion annually.

But there are about 500,000 workers and only 105,000 residents.  Despite their numerical disadvantage, residents spend only slightly less – estimated by SGS at $1.04 billion.

Students were estimated to spend $459 million as a group on retail and hospitality within the city each year.

The Retail and Hospitality Expenditure Study, City of Melbourne/SGS Economics & Planning 2014 research also showed that visitors to Melbourne spend an estimated $885 million.

The researchers also looked at “leakage” and found that, again, residents were the most loyal group of customers within the city.  Residents expend 85 per cent of their total spend within the city, and forked out only $150 million (15 per cent of their total spend) on retail and hospitality in other places.

In contrast, students and workers were found to spend four times as much in places other than the City of Melbourne. Workers annually spend $4.2 billion elsewhere, while students spend $1.6 billion.

The researchers pointed out that there was considerable overlap between these groups.

The Year One Report showed the city was home to 18,221 businesses and had a weekday population of 844,000 people and a weekend population of 579,000 people.

The report estimated that 439,000 people were employed in the municipality’s retail and hospitality businesses.