Shoppers’ card spending suggests little festive cheer
Retail spending using electronic cards over the key Christmas period suggests retailers found little to cheer about in the festive season.
Spending on cards fell a seasonally adjusted 2.3 per cent in the month of December from November and was down 0.2 per cent in the December quarter compared with the September quarter on the same basis, according to Statistics New Zealand.
That’s despite actual figures showing that spending of $6.8 billion in December was up $40 million from a year earlier, and increased by $616m to $18b in the December quarter from the same quarter of 2017.
“Growth in December was softer than usual, so in seasonally adjusted terms we are seeing lower sales as a result,” Stats NZ retail statistics manager Sue Chapman said.
“The dip in the December 2018 quarter came after a strong September quarter.”
While much of the quarterly decline reflected the fall of nearly 40 cents per litre in petrol prices over the December quarter, “those savings at the pump don’t appear to have leaked across to other retail industries”, Chapman said.
Economists were surprised by the spending weakness. Westpac noted that some of that could be due to tough competition compressing margins and slowing nominal spending growth.
“The bigger concern is that these soft spending figures reflect an easing in households’ spending appetites, and that’s a prospect that can’t be discounted,” senior economist Satish Ranchhod said in a note.
ASB noted the “significant recoil” in spending on clothing and durable goods in December, after purchases of those goods lifted in the Black Friday sales in November.
While the link between card spending and the GDP is not exact,
Warehouse Group shares fell a cent to $2.04. Briscoe Group was unchanged at $3.28 and outdoor goods retailer Kathmandu Holdings rose 2 cents to $2.37.
Excluding vehicle-related industries, core retail spending rose 0.5 per cent in the latest quarter after a 1.9 per cent increase in the September quarter.
Spending on fuel fell by $92m, or 4.7 per cent, in the December quarter, while spending on food and liquor fell $62m, or 1 per cent.
In the month of December, spending on durables such as electronics, whiteware, hardware and furniture fell $58m, or 4.4 per cent, from November. Spending on fuel was down $50m or 8 per cent.
Sales of clothes and shoes fell 2.1 per cent in the month of December, spending on hospitality was flat, and sales of supermarket food and drink rose just 0.6 per cent.