Get in early: eat, drink, be merry

SHOPPERS splashed out on eating and drinking in the September quarter and scooped up bargains for furniture, cars and in department stores, with cheaper prices on offer.

Statistics NZ figures show the volume of total retail sales was up 1.5 per cent in the September quarter, well ahead of most market forecasts of an 0.8 per cent rise and the fastest pace for more than two years.

Sales volumes in the quarter were up 4.5 per cent on the same quarter a year ago.

Consumer confidence remains high, job numbers are growing fast and so people were willing to spend up on eating out, economists said.

Nationally, the big gains were in food and drink.

Sales volumes for supermarkets and grocery stores were up 1.9 per cent, while food and drinks services sales rose 3 per cent in the quarter.

The food and drink services sector includes cafes, restaurants, takeaways, bars and clubs.

Incomes are growing modestly, interest rates remain relatively low, and house prices are rising in some regions, making people feel richer, all spurring on retail sales.

The migration boom is also giving shop spending a good push ahead.

And as the high New Zealand dollar made some goods cheaper, shoppers were willing to buy more.

In percentage terms, the biggest gains in sales volumes in the quarter were seen in furniture and housewares, up more than 6 per cent, buoyed by more house building and a steadier housing market.

But the figures also showed some furniture shops were still having to discount to achieve sales, with a 1.6 per cent fall in the

price

‘‘deflator’’ furniture quarter.

That was a factor keeping a lid on overall prices, with the overall retail trade ‘‘deflator’’ down 0.6 per cent in the quarter.

But falling prices were not just in the furniture stores. Prices were down for cars, department store goods and appliances, too.

Economists said that would encourage the Reserve Bank to leave the official cash rate on hold till late next year.

ANZ Bank senior economist Mark Smith said yesterday’s figures showed overall inflation in the retail sector was non-existent, with volumes rising faster than values.

‘‘It appears that consumers are tending to switch . . . to relatively cheaper goods and services where feasible,’’ he said.

Westpac Bank economists said total sales volumes were rising because of weak food prices and the impact of the high New Zealand dollar earlier in the year holding down import prices.

‘‘Subdued inflation has helped to give consumers more bang for their buck in the last few years; that will change if the recent softening in the New Zealand dollar is sustained,’’ Westpac senior economist Michael Gordon said.

in

the