Retail sales up 28% in September quarter

AUCKLAND: It’s official — New Zealanders celebrated release from lockdown by going shopping.

And yes all the anecdotes about New Zealanders spending on home improvements and new lounge suites did stack up.

Retail sales figures released yesterday showed the biggest quarterly rise in 25 years.

It is probably an even more historic spike than that, but comparable Stats NZ figures only go back to 1995.

Spending bounced back by 28% in the September quarter, well above economists’ forecasts.

The market consensus was for a rise of about 19%.

While the quarter’s rise didn’t quite make up for the historic fall of 15% ($3.6 billion) in the Covid19affected June 2020 quarter, it did take retail sales figures for the 12month period back to roughly the same level as the previous year.

The total retail sales value for the 12month period from October 2019 to September 2020 was $97.6 billion, down just 0.2% ($172 million).

Sales for the same period from 2018 to 2019 were $97.8 billion, up 4% ($3.7 billion).

Even in a sea of ‘‘better than expected’’ data, it is incredible to think that Covid managed to put such a small dent in retail spending and consumer confidence.

There were particularly large increases in spending on household durables, building supplies and spending in department stores.

‘‘Spending in those areas has been boosted by the increased amount of time New Zealand families are spending around the home,’’ Westpac senior economist Satish Ranchhod said.

Car sales rebounded 47.7%, in line with the 50% climb in car registrations over the quarter, and the highest level on record.

Spending on hospitality also rebounded in the September quarter. However, it remained around 5% below preCovid levels.

In large part, that was due to the ongoing closure of the borders and continued restrictions on international tourists, Mr Ranchhod said.

‘‘The only area where we did not see a rise was spending on grocery foods, which fell by 2.9% over the quarter. This likely reflects that many households chose to eat out again when health restrictions were lifted.’’

Fourteen of the 16 regions had rises in retail sales values in the September 2020 quarter compared with the September 2019 quarter, the figures show.

The Auckland region had the largest dollarvalue increase this quarter, up 3.6% ($315 million). Canterbury had the next largest increase in dollar terms, up 9.3% ($281 million).

They were followed by Waikato, up 12% ($266 million), Wellington, up 9.3% ($213 million), and Bay of Plenty, up 11% ($168 million).

Mr Ranchhod said the strong sales figures pointed to the likelihood of a stronger than expected final GDP figure for the quarter.

Westpac is currently forecasting a 12% quarterly rise. — The New Zealand Herald