Sales trail inflation

The total volume of retail sales increased 4.9% in the September 2022 quarter compared with the same time last year, Stats NZ said yesterday.

But Retail NZ chief executive Greg Harford said the statistics showed consumers were already tightening their belts. The total value of retail sales was $29 billion, up 15% ($3.9 billion), compared with the September 2021 quarter.

The volume of sales in the food and beverage services industry – which includes cafes, restaurants, bars, and takeaways – increased 30% year-on-year, helping to drive the rise in total retail sales.

In the September 2021 quarter, sales volumes were affected by a national lockdown for part of the quarter, as well as extended restrictions in Auckland and Northland. ‘‘With border restrictions lifting this year, a return of international visitors is likely to have helped boost hospitality spending, in addition to the bounce back seen in retail sales following last September quarter’s lockdown,’’ Stats NZ business financial statistics manager Melissa McKenzie said.

Nine of the 15 industries had higher seasonally adjusted sales volumes in the September quarter compared with the June quarter.

Electrical and electronic goods retailing was down 16% ($196 million) due to some businesses being reclassified as department stores, which led to department stores having an 18% increase ($276m) in sales.

Clothing, footwear and accessories were also up 5.1%.

Auckland spending was up 1.6% to $172m, Canterbury was up 2.9% ($108m), Otago was 7.4% ($107m), Waikato was 3.5 % ($97m) and Wellington was up 2% ($55m).

Stock values were also up, with the total value of stock held at the end of September being $9.4 billion, up 4.4% ($400m) compared with September 30, 2021.

Harford said the numbers confirmed consumers were making changes to their spending habits.

‘‘While spending is up 4.9% compared with last year, this is below the rate of inflation and last year’s sales were artificially depressed by ongoing lockdowns.’’

Retailers were reporting that consumers were already trading down brands, reprioritising spending and focusing on the basics, he said. ‘‘We are now into the busiest quarter of the year for retail and retailers are hoping that consumers will be out making the most of Black Friday deals today.’’

ASB senior economist Mark Smith said the tepid third quarter rebound in retail volumes from the weak first half of the year highlighted that 2022 was turning out to be very different for the retail sector after a ‘‘stellar’’ 2021.

‘‘Rising consumer prices are clearly weighing on the purchasing power of consumers.’’

There also looked to be a shift in spending patterns going on, with the reopening of the border and the pivot back to pre-Covid-19 spending habits, and that shift was benefiting services spending at the expense of retail goods, he said.

‘‘Retail activity is clearly in the Reserve Bank’s sights and is likely to struggle over the period ahead as the monetary policy brakes are applied more forcefully.’’