The Desert Road has been closed since Monday January 13th for roadworks, and if all goes to NZTA Waka Kotahi’s plan, will be closed for 2 months, i.e. till Sunday March 9th.
In the media, we read about how the electronic sign boards had been wrongly informing drivers that State Highway 1 was closed and to use State Highways 49, 4, 47, and 41 instead. Because it prematurely diverted traffic, places like Bulls which shouldn’t have been overly impacted, has been dead quiet, while Ohakune and others have been going off.
In this world of increasing unedited media, it is becoming ever more important to qualify what we read. We decided to look at electronic card spending over the first three weeks of the highway closure across several townships.
We looked at transaction trends in Bulls, Taihape and Waiouru, three very common stops along SH1 for a motorist driving north, as well as Ohakune, Raetihi, National Park and Taumarunui, locations on the recommended detour routes. (refer to Map 1 below).
Map 1: Monitored locations of Desert Road closure.
State Highway 1
Of the townships monitored, Taihape appears to have been the hardest hit. They have experienced a 10.7% drop in consumer spending, a 14.4% drop in transactions and a whopping 20.5% drop in cards (a proxy for the number of people).
Waiouru, sitting on the cusp of the Desert Road, also experienced double digit reductions in transaction and card volumes.
Bulls, which sits at the junction of SH1 & 3 (a detour option for motorists) have experienced more muted drops in activity at this stage, with spending down 3.8% and transaction/card volumes in line with last year.
As a grouping these locations have certainly been impacted, most notably measured by the 12.3% drop in cards, and that 57% of businesses have seen a drop in spending from the same period last year (of those active in both periods).
Detours
Located on State Highway 4 and the entry point to State Highway 47, National Park was a big beneficiary of the Desert Road closure across all our metrics. Spending was up 31.2%, transactions up 33.2%, and the number of unique cards was up 44.8%. All of which suggesting that there were more active consumers in the area this year.
Located on State Highway 4, potentially a useful stop for those travelling via Whanganui, Raetihi also saw a positive impact, with spending, transaction and card volumes all up over 17%.
Taumarunui is located on State Highway 4 and the gateway to State Highway 41. They too benefitted from the Desert Road closure, as the largest township to the west of Lake Taupo. Spending, transaction and card volumes were all up over 11%.
Ohakune which the media alluded to having gone gangbusters produced some interesting results. Located on State Highway 49, it seemed like a natural beneficiary of the Desert Road closure from motorists taking the last available detour.
The volume of cards and transactions certainly grew by huge margins (32.7% and 18.7%). However, spending volumes were down -2.4%. This tells us that Ohakune saw more people coming through, and they were out transacting. However, those that were spending haven’t made a material impact to the township yet.
When we interrogated the data, we found that only 46.7% of merchants experienced an increase in spending, and the majority of these were centrally located. This makes sense as no one wants to be more delayed than they already are.
Ohakune is certainly situated in a geography which should benefit from this detour, and the increase in traffic would lead people to believe this is the case. However, there will be many retailers within the township hoping for more.
Biggest ‘Winners and Losers’
The biggest winner of the Desert Road closure has to be National Park who grew the most across every measure; and the biggest loser has to be Taihape, who dropped across all the measures.
Biggest winner: National Park (spending +31.2%, cards +44.8%)
Other winners: Raetihi (spending +23.3%, cards +21.9%), Taumaranui (spending +11.7%, cards +19.2%)
Biggest ‘loser’: Taihape (spending -10.7% cards -20.5%)
Other ‘losers’: Bulls (spending -3.8% cards -0.7%)
TBD: Waiouru and Ohakune. Both townships are seeing a mixture of positive and negative growth. We will continue to monitor these townships over the duration of the closure.
Refer to Figure 1 below for the impact on the number of unique cardholders.
Figure 1: Number of Unique Cardholders at monitored locations of Desert Road closure.
