Retailing boost best in six years

Shoppers sprang back into action in the three months ending December 31, delivering the largest quarterly boost to retail sales volumes in six years.

The data points to a recovery from a weak September quarter and to the economy slowly but surely improving.

Statistics New Zealand said retail sales volumes in the December quarter bounced 2.1 per cent, compared with the September quarter, and the value of spending rose 1.7 per cent. The last time volumes rose that strongly was the December 2006 quarter.

A spending recovery was anticipated but its strength exceeded expectations.

ASB economist Daniel Smith said the volume boost – in 12 of the 15 retail industries – was led by fuel sales and continued strength in housing-market related sectors.

Hardware, building and garden supplies increased 4.2 per cent – which Statistics said was largely from strong Canterbury sales – and furniture and houseware lifted 3.7 per cent.

‘‘Our contractors are telling us they’ve got more work lined up than last year.’’ Terry Brunton New Zealand Landscape Supplies

New Zealand Landscape Supplies operations manager Terry Brunton said sales at its three Auckland stores had been strong over November and December – and better than for the past three years.

‘‘With the real estate market picking up we’re probably getting people spending money on tidying their houses up before they put them on the market.’’

This month had started slowly but January had been good. ‘‘Our contractors are telling us they’ve got more work lined up than last year.’’

The only significant decrease in volumes was in recreational goods retailing, down 2.9 per cent.

Gregg Brown, managing director of Hamilton-based Aber – which is a recreational goods wholesaler – said sales, particularly of camping goods, had been sluggish in October and November but had picked up and been quite strong since early December.

Specialist recreational retailers were under pressure from online sales and larger big box retailers such as Bunnings and Mitre 10, which were selling some of the same product lines, he said.

Statistics said that when vehicle and fuel spending was excluded, the volume of core retail sales lifted 1.5 per cent in the quarter.

The only notable fall was pharmaceutical and other store-based retailing, down 1.1 per cent, $13m.

The value of North Island sales rose 1.3 per cent, or $165m. The value of South Island sales rose 1.9 per cent, or $82m.

In Auckland the value of retail sales was up 1 per cent, or $62m, and in Waikato it rose 2.7 per cent, or $48m. Wellington slipped 1.3 per cent, or $24m.

Smith said the retail data provided encouragement that the economy bounced out of the thirdquarter soft patch – when volumes fell 0.2 per cent and values slipped 0.6 per cent – to good effect.