Yuletide shopping picks up
Small wineries sip, big ones glug profit
SHOPPERS are opening their wallets wider than last year in the leadup to Christmas.
Figures from eftpos terminal provider Paymark show shoppers splurged $170 million more in the first 22 days of December than they did for the same period last year.
Some of that, however, could be a result of retailer discounting effectively bringing forward their Boxing Day sales, Paymark believes.
Total spending via the Paymark network for the first 22 days of December is $3.9 billion – up 4.6 per cent on the same period last year when Kiwis spent $3.7b through Paymark terminals.
By comparison, spending through Paymark’s network during the entire month of November was $4.6b, an increase of 5.2 per cent on the same period last year.
Paymark’s figures do not capture the entire pre-Christmas shopping splurge, as the firm processes three-quarters of all electronic transactions in New Zealand.
It processed 76.2 million transactions in the first 22 days of December compared with last year’s 71.6 million for the same period, representing 6.5 per cent growth.
Paymark’s head of customer relations, Mark Spicer, said more retailers were starting their Boxing Day sales before Christmas which may be contributing to the increase in the number of transactions.
Nelson is the best-performing region with more than 8 per cent growth in spending value on December last year.
Otago, Bay of Plenty and Auckland/Northland are all performing well.
Spending value for December is weak in Wellington with 1.5 per cent growth, and Taranaki, Southland and the West Coast are all tracking poorly.
The pharmacy, health and beauty, and accommodation and hospitality sectors were performing well, with spending increases of 8 per cent.
MasterCard New Zealand manager Peter Chisnall said spending SMALLER wineries are getting back into profit this year, but only just, despite charging top dollar.
It is the big players who are making the most money in the industry, although on average they charge the least for each case they sell.
The latest annual financial benchmarking survey released by Deloitte and New Zealand Winegrowers shows a turnaround continued, with better profits across wineries of all sizes.
With the industry heavily reliant on exports, the high New Zealand dollar remained the top concern. The recent drop in the currency should make prices over- in early December was consistent with previous months.
‘‘The first two weeks of December indicated that shoppers hadn’t got stuck into their Christmas shopping just yet,’’ Chisnall said.
While the numbers were not bad, there was certainly no ‘‘Christmas bump’’, he said.
MasterCard was expecting at least 5 per cent growth in total December spending compared with the same period last year, he said.
He also expected December to be a record month for contactless transactions. ‘‘If people are leaving their shopping till late then it’s a way to get through the check-out a little bit easier.’’ seas more sustainable than before and maintain sales volumes, the survey said.
The wine industry has an annual turnover of about $2 billion, with $1.33b of that from exports.
Deloitte partner Peter Felstead said that for the first time since 2007 every category showed profits before tax, ranging from 3.3 per cent for the smallest to 17.6 per cent of total revenue for the biggest.
‘‘The survey results underpin a renewed optimism in the wine industry after a period of supply imbalances, high external debt levels, the global financial crisis and impacts of bulk wine sales,’’ he said.
But the survey said the industry seemed to have learned from its past experience with oversupply and had been able to deal with the increased volumes. Inventory levels had not risen significantly this year, as wineries were better able to get rid of excess stock.
The most profitable wineries were those with revenues above $20m a year, with pre-tax profits averaging 17.6 per cent of revenues, up from 16 per cent in 2013. The smallest wineries, with revenues of less than $1.5m, posted average profits of just 3.3 per cent of revenues, before tax. In the previous year, those wineries generally broke even or made a loss.
The survey showed that generally profits increased with size. The biggest firms enjoyed economies of scale.
The survey showed that the smallest wineries charged about $105 for the average case of wine, with a profit of just over $4. The biggest wineries sold for about $76, making almost $15 a case.